Endeavor Group - Q2 2023
August 8, 2023
Transcript
Operator (participant)
Good afternoon. Thank you for attending the Endeavor Group Holdings second quarter 2023 earnings call. My name is Matt, and I'll be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad. I would now like to pass the conference over to our host, James Marsh. James, please go ahead.
James Marsh (Head of Investor Relations)
Good afternoon, welcome to Endeavor's second quarter 2023 earnings call. A short while ago, we issued a press release, which you can view on our investor relations site, investor.endeavorco.com. A recording of this call will also be available via that site for at least 30 days. Today, you will hear from Endeavor's CEO, Ari Emanuel, and CFO, Jason Lublin, before President and COO, Mark Shapiro, joins us for Q&A. The purpose of this call is to provide you with information regarding our second quarter 2023 performance, in addition to our financial outlook for the balance of the year. I do want to remind everyone that the information discussed will include forward-looking statements and/or projections that involve risks, uncertainties, and assumptions, as well as described in the Risk Factors section of our filings with the Securities and Exchange Commission, including our 10-Qs and 10-K.
If these risks or uncertainties ever materialize or any assumptions proven correct, our results may differ materially from those expressed or implied in such forward-looking statements and projections. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update them publicly in light of new information or future events, except as legally required. Our commentary today will also include non-GAAP financial measures, which we believe provide an additional tool for investors to use in evaluating ongoing operating results and trends. This measure should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP. Reconciliations between GAAP and non-GAAP metrics for all of our reported results can be found in our press release issued today, as well as in the non-GAAP financial information posted in our IR website.
With that, I'll turn it over to our CEO, Ari Emanuel.
Ari Emanuel (CEO)
Thanks, James. Good afternoon, everyone. We delivered solid results in the second quarter, reflecting ongoing demand for premium content and live events. Before I share highlights from our four segments, I'd like to note two deals in particular. First, we closed our sale of IMG Academy at an enterprise value of $1.25 billion. As previously announced, we will now commence our share repurchase and dividend payment initiatives in the third quarter. Second, having completed antitrust reviews for our proposed combination of UFC and WWE, we are closing in on the launch of TKO Group Holdings, which we currently expect in mid to late September. As we have discussed, the exposure to TKO via our 51% controlling ownership offers compelling upside for Endeavor.
Planning is underway to begin maximizing revenue and cost synergies immediately upon closing, and I'm bullish on the TKO outlook and the progress of the WWE media renewal discussions. We will give further clarity on those initiatives in due course. Now, turning to highlights within our segments. In Owned Sports Properties, UFC 287 in Miami drew 19,000 fans and generated ticket sales of $11.9 million, making it the highest grossing event ever at the Kaseya Center and sixth highest in UFC history. We're also excited about UFC's upcoming return to Sydney, Australia, after securing a four-year, AUD 16 million investment from the New South Wales Government to host multiple events, inclusive of site fees.
The first of those events, UFC 293, will take place this September, just ahead of our new multi-year agreement that will make Foxtel Group the exclusive distributor of all UFC pay-per-views in Australia, beginning in 2024. Within our Events, Experiences & Rights segment, our owned events got off to a strong start in the second quarter. Of note, the Madrid Open tennis tournament, now in its second year as part of Endeavor, set a new attendance record with more than 325,000 fans across 12 days. Our Taste of London Food Festival similarly set an attendance record, attracting more than 56,000 guests across five days. At On Location, we're seeing strong demand for upcoming live events.
Tickets have already sold out for the 2023 Aer Lingus College Football Classic between Notre Dame and Navy, which is expected to draw nearly 40,000 fans from the US to Ireland. Reportedly, this event is projected to set a world record for the largest number of Americans traveling internationally for a single sporting event. Additionally, On Location's early ticket and suite sales for Super Bowl LVIII in Las Vegas are off to a record start. With exactly one year to go to Paris 2024 Paris 2024 Olympic Games, we're optimistic about the anticipation and demand we're seeing in the lead up to the games. At IMG Media, we wrapped another successful Premier League season, producing live coverage and distributing content to millions of international fans in more than 180 countries.
Also, IMG Media was chosen to produce the BBC highly anticipated coverage of the FIFA Women's World Cup, which is now underway in Australia and New Zealand. IMG is managing the incoming live match feed, studio presentation, and highlight programming for the BBC 33 fixtures throughout the tournament. Within our Sports Data and Technology segment, IMG Arena secured worldwide data and streaming rights for the National Women's Soccer League. At OpenBet, following the successful launch of their online sportsbook partnership with OPAP, Greece's leading gaming company, OpenBet will soon be expanding into their retail network of more than 4,000 shops and 20,000 terminals. This significant development demonstrates our focus on pursuing durable growth within the sport betting ecosystem and capitalizing on opportunities in newly emerging sports betting markets globally.
Finally, within our representation segment, despite the beginning of the WGA Strike within the quarter, WME verticals outside of film and television performed well. Broadway is coming back strong, comedy tours are selling out, we're having our best year for music touring. In country music, in particular, more than 100 WME clients participated in nearly 200 performance slots throughout CMA Fest week in June. Also in the quarter, WME celebrated many awards and nominations for clients, including at the Tony Awards, where the creative team behind Kimberly Akimbo took home FIVE awards, including Best Musical, making it the seventh musical from WME Talent to win in this category over the last 10 years. More recently, more than 110 WME clients were involved in Emmy-nominated projects, including a combined 40 nominations for Succession and The Bear.
As a sign of continued momentum for WME Sports, we had 5 first-round and 3 lottery picks in the NBA Draft, the most of any agency, and represent the world's number one tennis players, Iga Swiatek, who won at Roland-Garros, and Carlos Alcaraz, who took home his first Wimbledon title last month. WME also recently completed several tuck-in acquisitions that deepened and broadened our representation capabilities within several growing categories. In music, WME acquired Red 11 Music to further scale its position in country music and touring, and in books, WME acquired Washington, D.C.-based literary agency, Ross Yoon, expanding our literary and commercial nonfiction offering.
As just one example of the opportunity this presents, Ross Yoon represents Kai Bird, author of the book, American Prometheus, which inspired the hugely successful film, Oppenheimer, that was written, directed, and produced by our client, Christopher Nolan, and features clients including Matt Damon, Robert Downey Jr., and Kenneth Branagh. These acquisitions, along with our capabilities and expertise across the Endeavor flywheel, further enhance our ability to build holistic businesses around our WME clients. Before I turn the call over to Jason, I'd like to close with some thoughts on the strikes. I've been through many strikes over my more than 35 years of representing actors, writers, and creatives of all types whose livelihoods depend upon the entertainment economy. Time and again, our industry has navigated change, and now is no exception, as we adjust to new distribution models and technologies.
There are real issues to work through, and we continue to stand with our clients, advocate on their behalf, and push for a resolution that protects their creative and commercial interests. With that, I'll now turn things over to Jason to walk you through the quarter in detail.
Jason Lublin (CFO)
Thanks, Ari. Good afternoon, everyone. I'll start by walking you through our financial results for the second quarter. I'll provide some color around what we're seeing in each of our operating segments. All comparisons will be to the second quarter of 2022. For the quarter ended June 30th, 2023, we generated $1.436 billion in consolidated revenue, up $123.7 million or 9.4%. Net income for the quarter was $666.5 million, compared to $42.2 million. The change in net income was largely driven by the gain from the sale of the IMG Academy, which we completed at the end of June. Adjusted EBITDA for the quarter was $304.9 million, down $1.4 million. Now I'll walk you through each of our segments.
Our Owned Sports Properties segment generated revenue of $340.1 million in the quarter, up $8.2 million or 2.5%. While the segment's Adjusted EBITDA for the quarter was $179.2 million, up $18 million or 11.1%. As a reminder, the prior year quarter included $30 million of revenue related to Diamond Baseball Holdings, which we sold in September of 2022. Revenue growth in the segment was primarily driven by increased live event revenue at UFC, largely from two more events held outside of the Apex, higher media rights, fees, and sponsorships, and an increase in commercial pay-per-view. In the quarter, we signed a new multi-year rights agreement with Mola in Indonesia.
The increase in our aggregate AAV remains approximately 100% over prior deals since we began tracking in Q2 of 2021. At PBR, we set 11 event revenue records, including 8 sold-out performances. We signed long-term partnership extensions with Ariat and Pendleton Whisky, we inked new partnerships with Bass Pro Shops for PBR's Team Series and Unleash The Beast series. Turning to Events, Experiences & Rights. The segment recorded revenue of $591.1 million in the quarter, up $23.3 million, or 4.1%. Segment adjusted EBITDA was $76.6 million, down $16 million, or 17.3%. Revenue growth was driven by record ticket sales at the Madrid Open, the inclusion of Barrett-Jackson, increased media production revenue at IMG Media, and increased revenue at IMG Academy.
Revenue growth was partially offset by decreases in On Location's music business, as well as decreases at Endeavor Streaming. Segment adjusted EBITDA for the quarter was impacted by On Location's ongoing IOC investment, which began in the third quarter of last year and is inclusive of personnel, marketing, and technology costs, declines of Endeavor Streaming due to runoff of legacy deals and changes in client spending trends. A challenging comparison for The Masters and the NCAA Final Four, given weather and matchups. Lastly, timing-related shifts in certain sponsorship deal signings for soccer clubs we represent, which we expect to close in Q3. The decline in segment adjusted EBITDA was partially offset by growth in our events, media production, and IMG Academy businesses.
Moving on to our representation segment, revenue was $381.1 million, up $23.2 million, or 6.5%, while Adjusted EBITDA was $107.1 million, down $4.1 million, or 3.7%. The increase in segment revenue was primarily attributed to the content deliveries within our non-scripted content production business, as well as growth at our 160/90 business. The increase was partially offset by the early-stage impact of WGA Strike, which had an impact on segment Adjusted EBITDA in the quarter. Turning to our Sports Data & Technology segment. Revenue was $130.6 million, up $70.2 million, or 116.3%, while Adjusted EBITDA was $13.7 million, down $1.8 million, or 11.7%.
Revenue growth in this segment was attributed to the addition of OpenBet, which we acquired in Q3 of last year, as well as growth in the existing betting data contracts at IMG Arena. Segment adjusted EBITDA, which benefited from the inclusion of OpenBet, was offset by increased data costs at IMG Arena in advance of the sales cycle. As we've previously noted, these new data costs continue to create temporary pressure on segment margins, which we anticipated. We continue to expect to monetize these data rights in the upcoming sales cycle. Performance in the quarter remains consistent with our previous commentary of the segment being back-half loaded for the year. Moving on to our capital structure. We ended the quarter with $5.11 billion in debt and $1.62 billion in cash, resulting in approximately $3.49 billion in net debt.
Our net leverage was 3.06 times at quarter end. In July, we completed our voluntary pay down of $50 million of debt. Later this month, we expect to commence our share repurchase of up to $300 million of Class A Common Stock. At quarter end, we also intend to distribute our first quarterly dividend in an amount up to $25 million to holders of our Class A Common Stock and our other equity holders at Endeavor Operating Company. Now, related to our outlook. This is the first time in 63 years both WGA and SAG-AFTRA are striking simultaneously. We currently estimate the strikes will adversely impact our revenue by approximately $25 million per month on average, which largely flows through to Adjusted EBITDA.
Without knowing the scope, duration, and shape of the eventual recovery, especially given that the SAG-AFTRA Strike is a relatively new development, having taken effect only on July 14th, it would be premature to speculate the aggregate $ impact for the balance of the calendar year. We encourage investors not to rely on our previously communicated annual guidance estimates. We plan to provide further updates on the impacts of the strike during our Q3 earnings call. We expect to update new guidance targets during the ordinary course of future earnings announcements as and when these labor disputes are resolved and we have greater visibility. Beyond the impact of the strike, our other businesses in aggregate remain on track with our adjusted EBITDA expectations. Despite near-term disruptions related to the strike, we continue to be focused on executing our strategy.
With that, I'll turn it back to you, James.
Mark Shapiro (President and COO)
Great. Thanks, Jason. Operator, can we open up the call for questions, please?
Operator (participant)
Absolutely. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, press star one. As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking your question. We will pause here briefly as questions are registered. The first question is from the line of John Hodulik with UBS. Your line is now open.
John Hodulik (Managing Director)
Okay, great. Thanks, guys. I guess first, just a housekeeping question. On Jason, on your latest comments there, I mean, why withdraw guidance versus sort of update the guidance for, for the strike? I guess, unless something else has changed in the business?
Jason Lublin (CFO)
Yeah, sure, John. Look, first of all, as you know, we provide annual guidance, not monthly. You know, currently forecasting our annual guidance is complicated. You know, the situation we're in is largely unprecedented. You know, the added complexity of the recent development with the SAG-AFTRA Strike, you know, unknown duration and hard to figure out the ultimate shape of recovery. At this time, we believe it's not prudent to try to forecast our business on an annual basis. Just too many moving parts based on what we know today. That said, we are providing transparency by giving our best estimate of a current monthly impact, so you have the inputs to make your own assumptions on the ultimate impact of the strike. Excluding the strike, our business are on track.
Q2, Q2 results are just ahead of street expectations, and year to date, we've done roughly $3 billion in revenue and over $600 million in Adjusted EBITDA. As we said, Adjusted EBITDA for the rest of the business is in line with our previous expectations. We'll also plan to update more in Q3. As we know more, we'll share more with everybody.
Mark Shapiro (President and COO)
Yeah, I think John, it's Mark. You know, I just remind you, I mean, last quarter, Ari-
... was very specific on, "Hey, we're getting our arms around this WGA Strike. We're gonna come on the call next quarter, and we're gonna be able to quantify what kind of hit and how long-lasting that's gonna be." Now, as we're getting ready to do that, bang! Just three weeks ago, we get hit with this SAG-AFTRA Strike, right? Which is something, as Jason said, when we haven't seen in 60+ years. you know, this is a once-in-a-generation event. We need some time to get our arms around that and give you guys the kind of clarity and transparency you're looking for. In the meantime, you're gonna get monthly guidance, which we've just given you here. Just to underscore the other part of your question, no, there's nothing to see here, if you will. I mean, the business is doing well.
We're tracking well on all of our other businesses. There's no watch-out points, if you will. Even WME, outside of the strike, is doing really well. Sports is doing well. Music, as I'm sure you've read about, is on fire. Comedy's great. Broadway is doing well. Our speakers bureau, our folks are getting booked right and left for speaking engagements. We're being prudent here because remember, the second half of the year has some of our big events, some of our big headline assets. Winter Wonderland is our biggest event. That doesn't take place till December. We have a Conor McGregor fight that we've budgeted for in the second half. We have 4 Frieze events, and I'll just remind you, when it comes to Sports Data & Technology and IMG Media, we're loaded in the back half on both of those businesses.
Again, good shape, but still a lot of wood to chop in the last six months.
John Hodulik (Managing Director)
Okay, great. Just to make sure I understand sort of what you're saying there, Jason, the $25 million a month, if it lasts for six months, or sort of the rest of the year, effectively, the guidance goes from $1.25 billion to in the neighborhood of $1.1 billion in EBITDA for the year. Is that... Do I get that right?
Jason Lublin (CFO)
John, look, we're, we're not gonna give guidance for the year, but what I would say is, you know, given what we know now, you know, and, and noting that the SAG-AFTRA Strike is less than 30 days old, and based on our best estimates of the impact of the strike, given what the business has performed to date through the first 6 months and the fact that the rest of our business is generally aligned, I definitely- that's a reasonable way to look at the business and, and to look at our numbers. That being said, we'll, of course, update, you know, in Q3 as well.
John Hodulik (Managing Director)
Sure
Jason Lublin (CFO)
... to give, you know, any changes to that view or, or based on actuals, you know, for Q3 impact of the strike and anything we're seeing different. I think that's a reasonable basis to look at the business.
Mark Shapiro (President and COO)
Including up or down-
Jason Lublin (CFO)
Up or down?
Mark Shapiro (President and COO)
...in the event that these strikes get settled earlier.
Jason Lublin (CFO)
Sure
Mark Shapiro (President and COO)
than most people anticipate.
Jason Lublin (CFO)
Correct.
Mark Shapiro (President and COO)
As they say.
John Hodulik (Managing Director)
All right.
Mark Shapiro (President and COO)
... in math class, you'd have gotten an A.
John Hodulik (Managing Director)
Thanks, Ari. Now my, my, my actual question, I mean, you know, we're sort of halfway through earnings here, and, you know, the weakness in the linear TV ecosystem is, is definitely front and center. I guess, either from, from Mark or Ari, I mean, any evidence that you're seeing that that weakness is translating to sort of less appetite for, for, for sports rights? Thanks.
Ari Emanuel (CEO)
Well, here's what I'd say: we continue to see live sports as a long-term driver of demand, despite near-term issues regarding linear channels. Scarcity value of professional sports leagues, teams, franchises, as you know, is true. Rising consumer engagement and viewership, they're spending on experiences and sports betting adjustments, consistency on delivering appointment viewing ahead of can't-miss moments. Legacy broadcasters still represents the lion's share of sports rights in revenues, with big tech companies and SVODs seen as newcomers, despite significant investment in the space. We just saw Max saying they might have a, a sports tier. Same thing with Peacock. Clearly, the ecosystem is entering a generational change, we continue to feel live sports forming up and to the right.
We also think that the properties like UFC and WWE are premium content, appointment television, and feel great about the value of those rights.
John Hodulik (Managing Director)
Great. Thank you.
Mark Shapiro (President and COO)
Operator, next question, please.
Operator (participant)
Thank you for your question. Next question is from the line of Ben Swinburne with Morgan Stanley. Your line is now open.
Ben Swinburne (Head of US Media Research)
Thanks. Good afternoon, guys. I think, Jason, you mentioned the buyback, or maybe it was already starting later this month. Just wondering if you could give us a little more specificity, any reason why it can't start, you know, after you guys, you know, finish reporting, this evening? I guess, Ari, are you thinking about anything on the cost side at WME? I mean, I think Jason said, you know, the revenue hit will largely flow through to EBITDA, which suggests, you know, the cost structure is pretty fixed. But I'm just wondering as, as this sort of strike continues to move along, you know, how you guys are thinking about, you know, the expense side of the equation.
If I can just ask one more, I apologize, but John asked three, so I figure it's fair. What are you thinking for capital allocation once this TKO deal closes? You know, that business is, generates massive free cash flow, rapidly delevers, and it's gonna close, you know, in the not-too-distant future. Anything you can share with us sort of post-close, strategy around use of cash flow and capital allocation?
Mark Shapiro (President and COO)
Ben-
Ben Swinburne (Head of US Media Research)
Thanks.
Mark Shapiro (President and COO)
We may have to go back through that one.
Jason Lublin (CFO)
Yeah. Yeah, we might have to go back through this, but we'll, we'll, we'll, we'll try. If we miss anything, let us know.
Ben Swinburne (Head of US Media Research)
Thank you.
Jason Lublin (CFO)
As far as the, the buyback, we need to be in an open window, so, you know. We need a few days into that open window before we can execute it. You know, we don't just be a little bit before we can start that program, so that's more just tech- technical in-
Ben Swinburne (Head of US Media Research)
Got it.
Jason Lublin (CFO)
nature. As far as cost structure, you know, we, we've, you know, addressed some of the cost structure already, as you can imagine, on some of the variable costs. You know, so when we gave that 25 number largely flowing through, that sort of already indicated, it, it, took into account what we've been able to do on the cost side. We're saying largely flow through because we do think there's potentially an opportunity to get a little bit more as time goes on. But keep in mind, you know, there's a lot of aspects of the agency that are still operating very well, as Ari said, in full, in full force. So we want to make sure we're not doing anything, you know, that's impacting those sort of, those, those sides of the business as well.
Mark Shapiro (President and COO)
Mm-hmm.
Ari Emanuel (CEO)
We would never, I mean, obviously, Ben, I mean, never waste a crisis, right? I mean, we've been through this before with COVID. We are tight on all controls.
Mark Shapiro (President and COO)
Right.
Ari Emanuel (CEO)
Efficiencies is the word of the moment, and whether it comes to, you know, pruning our portfolio or just freezing hiring and T&E, you can bet we're lifting all levers.
Mark Shapiro (President and COO)
The third question, Jason?
Ari Emanuel (CEO)
What was the third question?
Ben Swinburne (Head of US Media Research)
TKO capital allocation, given the cash flow and the leverage there, what do you think you might do with all that capital potential?
Jason Lublin (CFO)
Oh, I, I mean, to be, to be honest, Ben, we're right now we're just focused on closing the transaction. We're not going to speculate, but yes, we know it's going to be a highly cash-rated business, with, with a good leverage profile. We, you know, at that point in time, we'll address and make the, the right capital allocation decisions TKO will make the right capital allocation decisions on behalf of TKO at the time.
Ben Swinburne (Head of US Media Research)
Thank you.
Ari Emanuel (CEO)
Thanks, Ben. Operator, next question, please.
Operator (participant)
Thank you for your question. Next question is from the line of Kutgun Maral with Evercore ISI. Your line is now open.
Kutgun Maral (Managing Director, Equity Research Analyst)
Great. Good afternoon, thanks for taking the question. Maybe switching gears a bit, there's a lot of focus on TKO, but I was actually hoping to dig in a bit on the non-TKO part of the company, because looking at the stock today, these assets seem particularly disconnected with other public or private valuations. Ari or Mark, can you share your views on what gets you most excited about the outlook for these remaining businesses? Then, Jason, I know there's a lot going on here, and I don't expect guidance, but is there anything you could share on the financial profile you see ahead for the non-TKO group, particularly around free cash flow? Thanks.
Ari Emanuel (CEO)
I would say the following: we operate in a large, global, and fast-growing marketplace. I think the combined TAM for sports, entertainment, music, live events, premium experience is roughly about $500 billion. Endeavor operates in the most durable layers of sports and entertainment value chain. Our management team has a long history of operating in an ever-changing sports and entertainment industry. I would just say to you, you know, we look at our business. We sold the production business for $1 billion. We sold the Academy for $1.2. I think, I don't believe that anybody valued those assets, with those numbers. We hear the speculation regarding Kering and CAA, in our representation segment. We're larger than that, even with the acquisition that they made of ICM.
If-- let's just say that's close to the valuation they're talking about, just that portion alone, the, the, the representation segment is, is greater than that. Then I think when people look at On Location, IMG Media, and our betting business, it's a significant business, the remaining assets. Hopefully, they'll now begin to realize and be able to look at those without UFC in there, and we'll get the value accretion that we think those remaining assets deserve.
Mark Shapiro (President and COO)
Yeah, Kutgun Maral, I mean, clearly, you can hear it. I mean, we, you know, we struggle, frankly, with how undervalued EDR is these days for exactly the reasons Ari Emanuel talked about. We're excited primarily because we have some terrific rights renewals in front of us, both in representing WWE for the time being and owning UFC, and the synergy upside that will exist, both cost and revenue, at TKO. I would say secondly, we see meaningful growth in events and experiences, especially when you consider the Olympics in Paris for 2024. On top of that, we see increased shareholder returns as leverage drops below 3x after the TKO launch. Finally, the demand for content, the demand for premium content, which is where we play, premium content, UFC, WWE, all the entertainment programming that we package, that's not going anywhere anytime soon.
Owning or representing it, we sit at the center, as you know, and we, we find ourselves in a very attractive space. That kind of financial profile and that debt leverage being, you know, less than 3 times after the TKO launch, we're excited about the prospects for Endeavor.
Jason Lublin (CFO)
On the, on the free cash flow, Kutgun, you know, as we said on the Q1 call, you know, we're going to revisit free cash flow for the company in 2024, given a lot of the anomalies in 2023. What I will reiterate, what we did had said prior to that, we certainly expect the remaining assets of EDR to be free cash flow positive on a go-forward basis.
Kutgun Maral (Managing Director, Equity Research Analyst)
Understood. Thanks, everyone.
Ari Emanuel (CEO)
Thanks, Kutgun.
Operator (participant)
Thank you for your question.
Ari Emanuel (CEO)
Next question.
Operator (participant)
Next question is from the line of Bryan Kraft with Deutsche Bank. Your line is now open.
Bryan Kraft (Lead Equity Research Analyst)
Hi, thanks. Good afternoon. I guess a follow-up question on the strikes. If the writers and actors are back to work sometime before the end of the year, how should we think about the impact on 2024? Will the negative impact in 2023 translate more or less into a similar positive impact in 2024 as that production shifts into next year?
Ari Emanuel (CEO)
Thanks. Here's what I would say. Having gone through multiple strikes, I think it will be months, not days, until the strike kind of gets settled and things start back up. Things that were shut down that were filming will start up, and then there'll be the pre-production, and then going into production. You're talking months, not days, until that pipeline. When it ends, again, we do not know, et cetera. It's complicated. It's kind of not since the '60s, it's unlike any strike that's happened in a long time. You know, it's gonna be months. Let's just say it's in the back half. We'll have more updates, as Jason said in a couple earlier questions, and then we'll give you kind of where we think.
Does it begin at the beginning of 2024? Maybe to the tail end of 2023? We do not know.
Mark Shapiro (President and COO)
Bryan, you know, to Ari's point, it'll take a while to ramp up, but we live in the comp business. We look forward to this getting wrapped up, our clients having better economics with each of their deals, us prospering from a return to normal business with better economics in 2024. That bodes for a, a strong picture, and I would just say on top of that, you know, non-scripted, while we haven't seen it yet because the studios have been bankrolling cash, we're just beginning to see now a ramp-up in orders for non-scripted. That will also inert to our benefit in 2024.
Ari Emanuel (CEO)
Here's the one thing that you can take away from this: Unlike most negotiations that all of us have gone through, the one answer that we do know, this strike will come to an end. Both these deals will come to an end. I don't know when, they definitely will.
Mark Shapiro (President and COO)
One time and temporary.
Ari Emanuel (CEO)
Yes.
Mark Shapiro (President and COO)
Great. Thanks, Bryan.
Bryan Kraft (Lead Equity Research Analyst)
Thank you.
Mark Shapiro (President and COO)
Operator, the next question, please.
Operator (participant)
Thank you for your question. The next question is from the line of Stephen Laszczyk with Goldman Sachs. Your line is now open.
Stephen Laszczyk (Vice President, Equity Research Analyst)
Thanks. Good afternoon. Maybe you could just expand on the demand for non-scripted and to the extent you're seeing an uptick in demand, in production or, or orders from studios. Any commentary on maybe how that could offset some of the headwinds in the representation segment from, from the strike over the next, you know, quarter or so, that would be helpful.
Mark Shapiro (President and COO)
Great. Thanks, Stephen. Yeah, look, we're leaning in in a big way. Ari mentioned Endeavor Content, which obviously we sold for a big number and a big multiple. We're now leaning in on that same strategy for non-scripted. I'm sure you've seen some headlines, some investments we've made, an acquisition we made with Asylum Entertainment. We think non-scripted is, is a real strong play for us, and we're, we're ramping up in that area. In terms of the studios and ordering, I think everybody thought, "Oh, strike, they're shutting everything down, and now SAG-AFTRA Strike, they're for sure shutting down. They're gonna start ordering game shows and reality and non-scripted like crazy." Well, frankly, they didn't do that out of the gate. They're bankrolling cash, and that's why you see some of this cash flow a little better with each of these earnings reports.
We're now seeing, for the first time this week, that they're starting to ramp up, which means they see a prolonged strike, and they need to fill the pipe with something. That's beginning to take place. I would tell you, in the shape and form it's taking place, they're actually coming back and ordering shows that they passed on prior to. Look, we hope we'll be in a good place here, where the strike's over, to Ari's point, ramp-up begins, production gets going, pipeline gets filled, but, oh, yeah, they've made all these non-scripted commitments. By the way, we happen to have investments in ownership in companies that will benefit us on both sides.
Stephen Laszczyk (Vice President, Equity Research Analyst)
Got it. Thanks for that. Maybe just one on, maybe just one more, if I could, on the Sports Data & Technology segment for Jason. I think I heard you say that the growth is gonna be back-end loaded. I wasn't sure if you meant that sequential growth off of 2Q's revenue performance.
Jason Lublin (CFO)
No, we, we basically meant that the majority of the EBITDA in the segment is weighted in Q3 and Q4 for the year.
Stephen Laszczyk (Vice President, Equity Research Analyst)
Got it. Thank you.
Mark Shapiro (President and COO)
I'll tell you-
Operator (participant)
Thank you for your question.
Mark Shapiro (President and COO)
Steven, clearly, you saw the news today with ESPN and ESPN Bet and Barstool and PENN Entertainment. I mean, we're not the only ones that think sports betting is a major part of the ecosystem.
Great. Thank you. Operator, next question, please.
Operator (participant)
Thank you for your question. The next question is from the line of Jessica Reif Ehrlich with BofA Securities. Your line is now open.
Jessica Reif Ehrlich (Managing Director, Media & Entertainment)
Thank you. Kind of a 3-parter on content, going back to the strike. You were reporting at the tail end of most companies. You know, we've heard everybody talking about content and becoming more efficient. Do you think that the industry is structurally changing, how they're thinking about content spend, going forward? Are you seeing an increase in third-party licensing? Can that mitigate some of this, some of this impact for some of these entities? Then, I mean, it seems pretty obvious, but, you know, unless there's a global strike or strikes, that a lot of this will move offshore, you know, a lot of the production. How does that impact your business?
I guess just a small thing, Ari and Mark, like, how do you plan to split your time between the two companies post-TKO?
Mark Shapiro (President and COO)
New record, Jessica, 4 questions.
Yeah.
Or-
Here's what I would say to you. We don't see any pullback, I mean, we're in a strike now, in content spend. There's been many indications, new programming kind of gets you subs and maintains your subs. Sports does the same thing. Netflix and other people have been buying stuff internationally, always. I don't believe that yet, that there's more efficiency. I think there's six to seven buyers with Sony and Paramount also on the movie side and the direct-to-consumer business. From my perspective, content spend has continued. It's actually increased. Hopefully, it doesn't the strike does not hurt the theatrical business. Again, as I said in the past, they've got to continue the pipeline, even though linear is going down and cable is going down.
They gotta continue for their SVOD strategy, and now the theatrical business with all these movies coming out, they still perform. They're picking up. They've always picked up shows from international territories, a lot of Netflix doing that. We feel, we feel good about that. You know, I would say to you is, one of our strengths is that we're a global company, and so when you say kind of, we have our eyes all over the world, one, for sports, but also for non-scripted businesses, as Mark said, a bunch of our acquisitions. We're covered in that space on a go-forward basis. Great. Thanks. Next question.
Operator (participant)
Thank you for your question. Next question is from the line of David Joyce with Seaport Research. Your line is now open.
David Joyce (Senior Analyst)
Thank you. Given that one of the opportunity sets for the pending TKO creation is on the international front in terms of building out the footprint, I, I was wondering what the international opportunities are for representation. What might you be doing in terms of organic footprint build, in terms of, you know, agencies or, you know, through acquisitions? What's the gestation period for acquisitions or organic builds getting up to the representation division norms? Thanks.
Mark Shapiro (President and COO)
Yeah, David, look, I think this kind of dovetails a little bit with Jessica's question in terms of localized content. It just goes hand in hand with the demand for content that we're not just seeing in this country, we're seeing globally, and we are geographically spaced to take advantage of that. We are in 38 different countries, meaning WME, IMG, Endeavor has offices and boots on the ground in 38 different countries. From Japan to Shanghai, Beijing, Singapore, obviously all the way across Europe into Australia, New Zealand. I mean, we're covered everywhere, and the way to sell shows and the way to sign new clients, and celebrities, and actors, and writers is to, of course, be there and have your ear to the ground, knowing who's hot, what's trending, where the zeitgeist is going.
We see that as a major area of growth for us. In fact, you'll probably see us open up more offices globally, where we see opportunity in content, everywhere from India to Korea.
Thanks, David. Next question, operator.
Operator (participant)
Thank you for your question. Next question is from the line of Tom Champion with Piper Sandler. Your line is now open.
Tom Champion (Senior Research Analyst)
Hi, good afternoon. A little bit of uncertainty in the business related to the strike, curious if you could just talk about the consumer appetite to spend on experiences. Yeah, just overall view of the consumer. Maybe if you could talk a little bit about Sports Data & Technology. I think you referenced a new deal in Greece. Mark, I think you've talked in the past about non-traditional venues here domestically. What, what's, what's the opportunity that we should be watching for in that part of the business? Thank you.
Mark Shapiro (President and COO)
Yeah, I mean, look, Ari and I can, can jump on each other here with regard to consumer events and experiences. I mean, look, it's hot, right? We've got a whole new world of what the definition of going back to work is, right? The five-day work week is, is largely dead and not coming back anytime soon. Folks out there, whether you're in the U.S. or you're, you know, the youth in China, they have more time on their hands, and they're looking for more ways, whether they have the money or it's credit, to spend their discretionary time and income. We're seeing that across the board. You know, we represent the WWE, and they're reporting sellouts every which way they go. UFC, obviously, you've seen the trend line there and the ticket sales we're getting.
I mean, record ticket sales for our last five events of the UFC. Madrid Open, biggest attendance we've ever had and highest ticket yield. Miami Open, biggest attendance we've ever had and highest ticket yield. Even Super Bowl LVIII, we just hit the benchmark of $100 million for the Las Vegas Super Bowl, which is upcoming. We just hit the $100 million mark. I mean, ways off, and people are pre-ordering tickets just to make sure they get a seat at these premium events, and it does go back to premium. I would just tell you, finally, in August, we've got our Aer Lingus College Football Classic, which is in Ireland. It's Notre Dame versus Navy, and it's completely sold out. On Location is going to do record performance in terms of premium experiences. You know, we couldn't feel better.
Festival business is strong, music touring business is strong. Everybody wants to play. Our food festivals, Taste of London, was a record number for us. Look, we don't see that, that falling away anytime soon. On the Sports Data & Technology, you know, all I would tell you there is, you know, this is, this is a natural part of the content ecosystem. I mean, sports betting, sports viewing, sports participation, merch, commerce. You know, you see what's happening with Fanatics and the way they're expanding their business and getting into sports betting as well. It's become something, especially the young people, want to do as they're viewing, multitask and get engaged in a much deeper and meaningful way. We feel great about it.
Our launching in Greece with OPAP and OpenBet has been a monster success for just a few weeks out. Of course, we're licking our chops with the fact that Brazil is now legalized gambling, and that's going to open up that whole region to us. Sports data and technology, you see some of the other sports betting companies and the way they're jumping and gaining Genius Sports, Sportradar, their stock prices and rights, and we feel good about the opportunity to really layer in there.
Thanks, Tom. Next question, please, operator. Thanks a lot.
Operator (participant)
Thank you for your question. There are currently no further questions registered, so as a reminder, it is star one on your telephone keypad.
Speaker 13
Next question, please, operator? That's it. I just want to thank you all for joining us and participating in the call today. Thank you.
Operator (participant)
That concludes the conference call. Thank you for your participation. You may now disconnect your line.