Endeavor Group - Q4 2021

Transcript

Operator (participant)

Ladies and gentlemen, thank you for standing by, and welcome to the Endeavor Group full year and fourth quarter 2021 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, please press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, again, press star one. Thank you. James Marsh, Head of Investor Relations, you may begin your conference.

James Marsh (Head of Investor Relations)

Good afternoon, and welcome to Endeavor's fourth quarter and full year 2021 earnings call. A short while ago, we issued a press release, which you can view on our investor relations website, investor.endeavorco.com. A recording of this call will also be available via that site for at least 30 days. Today, you'll hear from Endeavor's CEO, Ari Emanuel, and CFO, Jason Lublin, before we open for questions. The purpose of the call is to provide you with the information regarding our fourth quarter and full year 2021 performance, in addition to our initial outlook for 2022. 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 described in the risk factors section of our filings with the SEC, including our 10-Qs and 10-K.

If these risks or uncertainties ever materialize or any assumptions prove incorrect, 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. These measures 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 our reported results can be found in our press release issued today, as well as on our IR site. With that, I'll hand it over to Ari.

Ari Emanuel (CEO)

Thanks, James. As we come up on our first year anniversary as a public company, we feel great about our overall performance and our continued ability to execute on our long-term strategy and deliver sustained growth. The secular tailwinds we laid out a year ago have never been stronger. From premium content and media rights to sports betting to live events and experience, the demand continues to grow. We believe there is no better company than Endeavor to continue capitalizing on this demand and that our results in 2021 illustrate that. We beat our targets and raised our guidance in both the second and third quarters of last year, and we continue to outperform in the final quarter and full year of 2021 while we still face the lingering impact of the pandemic.

Briefly looking back at the year, in our own Sports Property segment, UFC posted its best financial year in its 28-year history. All pay-per-view events sold out, sponsorship hit record revenue highs, and international rights deals saw significant increases. Within our Representation segment, our talent agency, William Morris, continued its strong growth, returning to pre-pandemic 2019 levels across categories such as television, film, books, and podcasts. In our Events, Experience, and Rights segment, our IMG Arena sports betting business saw sales surpass pre-pandemic levels. With our expected acquisition of OpenBet later this year, we'll look to further expand and evolve our sports betting offering for rights holders and sportsbooks while creating a new operating segment for this business. IMG Arena and OpenBet have been profitable individual businesses, and we expect that together we will be able to achieve meaningful revenue synergies and continue their profitability.

Within our On Location experiential business, we added the IOC and Olympic Games to our client roster and have begun preparations for our first games in Paris in 2024 to be followed by Milan in 2026 and L.A. in 2028. Finally, across our IMG-owned events roster, attendance increased significantly as COVID-19 restrictions were lifted. We also witnessed a substantial increase in both sponsorship sales and corporate hospitality tied to those events outpacing pre-pandemic levels. As we look back at this success, I wanted to take a couple minutes to remind you of the unique position Endeavor occupies at the center of sports and entertainment and how that enables us to capitalize on a wide range of secular trends. I also want to share with you my view on what this means for Endeavor going forward.

We've diligently built what we believe is a well-balanced and deeply interconnected portfolio of clients and owned assets across sports and entertainment. Two of our longest-running businesses, William Morris and IMG, provide us with invaluable insights that fuel strategic business decisions across the portfolio. William Morris gives us insight into trends coming down the pike in media and entertainment. For example, based on our agency's position in the marketplace and the evolving content landscape, five years ago, we saw an opportunity to create an artist-friendly independent studio, Endeavor Content. We closed our sale of 80% of the scripted portion of that business earlier this year, and I believe there is no better indicator of the value being placed on premium content than that deal, which valued Endeavor Content at nearly $1 billion on a post-money basis.

Meanwhile, through IMG media business, we represent more than 150 sports rights holders on a global basis, giving us a unique and expansive perspective on the evolving sports rights landscape. That perspective informed past decisions to acquire both the UFC and PBR after representing them for years. It also enabled us to consistently create complements to our live sports viewing experience, whether that's our Sport 24 in-flight streaming channel or IMG Arena sports betting operation. These media-driven insights further informed our decision to pursue the acquisition of OpenBet. Beyond the insights generated across our portfolio, Endeavor also benefits from being distribution agnostic. As the content landscape continues to shift, the one constant is the ever-increasing demand for sports and entertainment content. Whether there is expansion or consolidation of linear broadcasters, cable companies, or SVODs, the need for content remains at an all-time high.

We will continue to benefit based on our ability to readily fulfill that demand, and we have seen that both our global scale and our volume of deals has allowed us to command maximum value on behalf of our owned and represented IP. As the definition of content continues to extend beyond traditional verticals like film and television to include everything from podcasts, social media posts, to NFTs, this only presents more opportunity for our clients and our own assets going forward. No matter what form of content takes, we will be there at every step of the way as we have for decades, relying on the unique makeup of our portfolio, our deep capabilities, and the insights we're able to generate based on our global footprint. That powerful combination enables us to not only withstand the evolution of our industry, but also to thrive in the face of it.

Because we are both platform agnostic and well-diversified in terms of our volume of businesses and our global footprint, our exposure to segment or regional downturns is limited. I remain confident in saying that we are ideally positioned to benefit from the secular tailwind I mentioned earlier for the months and years ahead. As we head into our second year as a public company, we continue to face several external factors outside our control. We believe in the strength of our diversified business and the durability of the long-term strategy we've laid out. Looking to the future, you'll see us continue as first movers, identifying and leveraging trends, making one-of-a-kind connections across the Endeavor ecosystem of talent, brands, owned IP, and carving out new paths for growth.With that, I'll hand it over to Jason to talk more about the fourth quarter and the full year 2021, as well as our outlook for 2022.

Jason Lublin (CFO)

Thanks, Ari, and good afternoon, everyone. I'll start by walking you through our financial results for the fourth quarter and full year. I'll also provide you some color around what we're seeing in each of our operating segments. Any comparisons, be it annual or quarterly, will be in reference to the COVID-impacted prior year of 2020. For the quarter ended December 31st, 2021, we generated $1.5 billion in consolidated revenue, up $545 million or 57%. Adjusted EBITDA for the quarter was $229.5 million, up $57 million or 33%. For the full year, revenue was $5.1 billion, up $1.6 billion or 46%, and adjusted EBITDA was $880.3 million, up $308 million or 54%. Now I'll walk you through each of our segments.

Our Owned Sports Properties segment generated revenue of $277.3 million in the fourth quarter, up $8.3 million or 3%, while the segment's Adjusted EBITDA for the quarter was $125.1 million, up $2 million or 2%. On the year, the segment generated $1.1 billion in revenue, up $155.6 million or 16%, and $537.6 million of Adjusted EBITDA, up $80 million or 17%. Segment Adjusted EBITDA margins for the year improved 50 basis points to 48.5%. As Ari mentioned, UFC delivered its best financial year in its 28-year history, driven by an increase in the number of events, higher media rights revenue, and significant growth in sponsorship.

The organization sold out all pay-per-view events with audiences while setting several arena gate records. As Disney has shared, UFC continued to be a key driver of ESPN+ subscriptions, and internationally, we closed a series of media rights deals for significant rights fee increases. Meanwhile, UFC Fight Pass revenue was up 30% year-over-year. Throughout the year, we also added a series of new multi-year partners like Crypto.com and DraftKings to our sponsor roster. We made our first foray into NFTs with Panini collections that sold out within hours, paving the way for our NFT partnership with Dapper Labs, which launched in January with great success. Meanwhile, UFC's fan base continued growing and remained one of the most engaged audiences in all of sports.

The organization's social media followers grew 32% over the course of the year, reaching 187 million by the end of 2021, and nearly 300 million hours of UFC content was viewed on Facebook last year, the most in UFC history. Moving to PBR. Revenue increased in the quarter, primarily driven by the full return of events. The PBR World Finals held in Vegas in November saw revenue increases of over 160% over the prior year's event. It also marked the first finals ever aired on broadcast TV. Looking back at the full year, PBR signed 10 new national partners, brought its RidePass streaming channel to Pluto TV, and announced an exciting new team series format that would create new revenue opportunities for the organization. Now turning to events, experiences, and rights.

The segment recorded revenue of $516.7 million in the quarter, up $96 million or 23%, and Adjusted EBITDA of $54.7 million, up $12.4 million or 29%. On the year, segment revenue was $2 billion, up $437.8 million or 28%, and Adjusted EBITDA was $215.6 million, up $156.4 million or 264%. Segment Adjusted EBITDA margins improved to 11% for the year. These increases were driven by strong growth across the segment, including the return of marquee events like Hyde Park Winter Wonderland and Frieze London, as well as a resumption of full sporting event schedules, which benefited our media rights and production businesses.

Our IMG Arena sports betting business also renewed over 200 content deals with sportsbooks during the year. Meanwhile, IMG Academy and NCSA, the digital recruiting service we acquired in June 2021, were both up double digits in enrollment year-over-year. Moving on to our Representation segment. Revenue was $717.9 million, an increase of $443.2 million or 161%, while Adjusted EBITDA was $118.4 million, up $68.8 million or 141%. On the year, Representation segment revenue was $2 billion, up $1 billion or over 100%, and Adjusted EBITDA was $383.4 million, up $171.4 million or 81%. Segment Adjusted EBITDA margins were 20% for the year.

Growth in the representation segment was primarily attributed to a significant increase in Endeavor Content project deliveries, agency client commissions, and brands resuming spending on marketing and experiential activations, which benefits our 160over90 business. Looking specifically at our WME agency business, 2021 marked a year in which we had more than 330 WME series across linear broadcast, cable, and SVOD, converted more than 230 books to film and TV, closed more than 200 podcast deals, and had clients play key roles in some of the most viewed and highest grossing films of all time. Now, before I share our outlook for 2022, I want to give you an update on our capital structure. We ended the year with $5.7 billion in debt.

Cash balances were approximately $1.6 billion at year-end, resulting in $4.1 billion in net debt. Cash excludes proceeds from the sale of the restricted portion of Endeavor Content, which closed in January. We remain on track toward our net leverage goal of sub-4x. Finally, I'd like to share our current outlook for 2022. I'll first discuss our guidance on a consolidated basis and then provide some additional detail by segment to help you understand the drivers behind our expected financial performance in 2022. Let me start with initial guidance ranges for revenue and Adjusted EBITDA. We've said previously, we believe our business is best viewed on a full year basis, given quarterly fluctuations related to the timing of events and business transactions on behalf of our clients, as well as the renewal of media rights deals.

We expect consolidated revenue for the year to be between $5.2 billion and $5.45 billion, up 5% at the midpoint of the range. Adjusting for the sale of the restricted portion of the Endeavor Content, revenue growth would be up 23% at the midpoint of the range. On Adjusted EBITDA, we are expecting a range of $1.07 billion-$1.12 billion, or a 24% growth at the midpoint of the range, implying a 21% margin on the year. Adjusting for the sale of the restricted portion of the Endeavor Content, Adjusted EBITDA growth would be up 25% at the midpoint of the range. Embedded in our 2022 guidance are the following considerations.

The removal of the restricted portion of Endeavor content, Omicron-related and future pandemic negative impacts, as well as current economic and geopolitical risks, none of which we view as material at this time. M&A, including a full year impact of NCSA and Diamond Baseball Holdings, as well as the addition of the Madrid Open and OpenBet, which we expect to close around the start of the second quarter and in the third quarter respectively. Lastly, the ramping up of our investment in On Location's upcoming Olympic business. Now let me provide you with some color on our guidance by segment. Starting with our own sports property segment, we expect the segment to be driven by continued momentum at the UFC and accelerating growth at PBR.

While we anticipate hosting the same number of events in 2022 as we did in 2021, we expect more content outputs to take place in the second half of the year. Within UFC, we're seeing continued growth in revenue driven by contractual growth in both U.S. and international media rights, a return to live events in several global markets, increases in sponsorship and licensing, and a return to normalized business for commercial pay-per-view as bars and restaurants see business rebound. PBR is expected to experience strong top line and profit growth driven by the launch of the new team series this summer, as well as increasing rights fees. For events experience and rights, we expect strong revenue and segment profit growth as ongoing reopening trends continue. As evidenced by On Location's record sales for Super Bowl 56, making it the largest single sales event in On Location history.

Segment profit growth will be impacted by an upfront investment at On Location as we prepare to serve as the IOC's exclusive hospitality provider for the Paris 2024, Milan 2026, and L.A. 2028 games. We expect to ramp up our investment to the tune of approximately $20 million in 2022 and continued investment in 2023 before we expect to recognize revenue and profits beginning in 2024 in Paris and with each subsequent games. Viewed in the aggregate, we are enthusiastic about the return profile of this partnership with the IOC.

Also included in our expectations for this segment are our acquisitions of the Madrid Open announced in December 2021, which we expect to close around the start of the second quarter, as well as OpenBet, which we announced in September 2021 and anticipate will close in the third quarter subject to regulatory approvals. Upon close, we expect to create a new reporting segment to include OpenBet in our IMG Arena business. Finally, in our representation segment, we expect strong growth in revenue and Adjusted EBITDA. We also anticipate margins will improve materially with the removal of the lower margin Endeavor Content scripted business. Our WME agency business is poised for continued growth, which is expected to accelerate as live music and theater rebound to pre-pandemic levels.

Meanwhile, our 160over90 business is also expected to return to pre-pandemic levels with several major clients aggressively reentering the event activation space after a long hiatus, as well as a healthy new client pipeline as brands look to reengage with consumers in more meaningful ways. Now, before we take questions, I just want to reinforce what Ari said earlier. The secular industry trends we discussed during our very first earnings call as a public company continue to trend positively. From premium content and media rights to sports betting and live events and experiences, the demand is only growing. Given where we sit in the center of sports and entertainment, combined with the unique portfolio we've built, we believe we are ideally positioned to continue driving growth across all of our segments for the balance of 2022 and well into the future.With that, I will hand it back to James for Q&A.

Operator (participant)

At this time, I would like to remind everyone, in order to ask a question, please press star, then the number one on your telephone keypad. Your first question comes from the line of David Karnovsky with JPMorgan. Your line is open.

David Karnovsky (Executive Director)

Hi, thank you for the question. For Ari, on UFC, there's a large amount of major sports rights coming due in the next few years, including the NBA and major college conferences. Just given this renewal cycle, I was wondering how you think about the best window to launch negotiations for UFC domestic rights. You know, is there any benefit at all to kinda get ahead of this wave of contract expirations?

Ari Emanuel (CEO)

Well, here's what I'd say. The activity in the marketplace continues to demonstrate the value being placed on sports rights, the more competition than there's ever been, with limited rights. As we just saw recently, EPL rights just sold incredibly well. Apple just entered the marketplace for MLB, Amazon for Thursday Night Football. That's good for our sports rights assets, and our owned assets on a broad basis. We represent, as you know, 150 rights plus in our own sports rights. As it relates to UFC, we still have three years until the deal is up. We feel great about where we sit. Our relationship with Disney/ESPN is a win-win.Even in their last earnings call, they stipulated that the growth of ESPN+ the $21 million was due in part to the UFC. As in terms of our negotiating window, it's ultimately based on a mutual agreed-upon perspective with the partner. But again, you know, we feel great about where we are.Our customers, the people that watch the UFC buy pay-per-views. We've driven value to ESPN, so we're feeling really good about where we sit with the asset and the marketplace and the added people joining the marketplace from Apple, Amazon, and now with Discovery, Warner's coming online. We're feeling pretty positive.

David Karnovsky (Executive Director)

Okay. Then just on On Location, wondering if you could speak to how demand trended this year for Super Bowl hospitality relative to 2019, kind of how that informs your view for the business post-pandemic. We saw some reports that the NFL owners voted to increase their position in the business. You know, just wondering if you could say how that would impact you financially or operationally. Thank you.

Ari Emanuel (CEO)

Well, I would just say, you know, we've talked about the experience economy continues to grow. On Location is perfectly situated to take advantage of that situation in our prepared remarks. It was a hugely successful Super Bowl. It's actually the single largest event in our On Location history. We then went right into New York Fashion Week, and then we're also doing now experience packages for the UFC Apex, and that's selling incredibly well. In February, we announced the deal with the WWE, and I can't comment on anything as it relates to the NFL, but the relationship with the NFL couldn't be better.

David Karnovsky (Executive Director)

Thank you.

James Marsh (Head of Investor Relations)

Thanks, Josh. Next question, please.

Operator (participant)

Your next question comes from the line of John Hodulik with UBS. Your line is open.

John Hodulik (Managing Director)

Great. Just a couple questions I think for Ari on the UFC. First of all, any international media rights renewals for UFC to call out for 2022? Second, ESPN has raised prices for pay-per-view a few times. Does Endeavor, do you guys participate in that price increase and the economics that flow from that? Lastly, any comments in terms of exposure to Russia or Ukraine in that segment? Thanks.

Ari Emanuel (CEO)

Yeah. I feel really good about our growth prospect. As Jason said, and I've said in the past, every major category is substantially up pay-per-view, media rights, sponsoring, consumer products. On the international side, to speak specifically to your question, we see continued strong growth and upside. As I've said in the past, 90% of our audience is outside the United States. 10% of our revenues come from international rights. Our international rights to date are up 94% on an AAV over prior term, over the last 14 international deals since Q2 of 2021. Just to clarify, as I've talked about, the international deals typically run between three and five years.

In any given year, there's about anywhere from 20%-30% of our deals up for renewal. In 2022, the key ones coming up are Brazil, U.K., and Scandinavia. I really feel good about that. Your last point was?

John Hodulik (Managing Director)

The pay-per-view pricing.

Ari Emanuel (CEO)

As it relates to our exposure in Russia, do you want it on a general basis or just on the UFC basis?

John Hodulik (Managing Director)

Both would be great.

Jason Lublin (CFO)

Look, what we said is that we expect less than 2% impact on Adjusted EBITDA on a consolidated basis. We've already incorporated that into the guidance that we gave you today. You know, we'll continue to see how things evolve and understand what sanctions, if additional ones are implemented and if we will address as needed, if so.

Ari Emanuel (CEO)

Okay.

James Marsh (Head of Investor Relations)

Thanks, John. Josh, next question, please.

Operator (participant)

Your next question comes from Benjamin Swinburne with Morgan Stanley. Your line is open.

Benjamin Swinburne (Managing Director and Head of US Media Research)

Thanks. Good afternoon, guys. Hope everybody's doing well. I had a couple questions on the agency business. You know, Jason mentioned that business should grow nicely, I think accelerate in 2022, and with EC being sold, we're gonna see that in the numbers better. Two questions I get a lot from investors I'd love to get your thoughts on, Ari. One is, how is the shift from packaging and back end to cost plus impacting the growth of that business? There's some concern, I think, that there's been kind of a pull forward of revenue and profits during this transition that's gone on for the last few years. I'm wondering if you could talk about the sort of impact of that on WME, the growth outlook and margins, and then I'll ask my follow-up.

Ari Emanuel (CEO)

There was no pull forward as it relates to revenue or any of that situation. Listen, as it relates to the packaging business, on the movie and television side, you know, as I said for the pandemic, they were the SVOD players, Amazon, Apple, Netflix, they were, you know, licensees have more than doubled for shows right now. Excuse me. Packages were the windowing, like on The Office, you saw that. The bidding for that went to Peacock for over $500 million. So all of our packages are in fine position. There's no pull forward as it relates to any economics, and the business is stronger than it's ever been. As Jason went through the numbers on how many shows we have on now.It's very good right now.

Jason Lublin (CFO)

Yeah. I would just add, Ben, you know, from a margin perspective, you know, without Fifth Season, we certainly expect the margin, the representation segment to be up year over year, as evidenced by the full year margin of the business increasing from 2021 to 2022. I mean, on the packaging side, as Ari says, we haven't seen any pull forward. We've just seen a continued great demand for content on all sides of content for us, and have really seen a great rebound on the representation business from 2021 over 2020. A lot of our business is back to 2019 levels with the exception of obviously some of the music touring and Broadway businesses. We're expecting to really come back online in 2022.

Benjamin Swinburne (Managing Director and Head of US Media Research)

That makes sense. Thank you. The second question is just around the visibility into that business. Is there any way for us to think about how much of your EBITDA at the agency in a given year comes from, you know, stuff that happened in the past versus happened in period? I would imagine that there's some sort of library or sort of prior year, you know, production that's flowing through the earnings every year. I don't know if library is the right phrase, but is there any way to think about how much of your your EBITDA in that business comes from a library versus stuff that's going on in period, just so we can think about the visibility you have into that business?

Jason Lublin (CFO)

Yeah, look, I mean, it like we said, you know, historically in the agency business, we've been a double-digit grower every year up until the pandemic. Those revenues, you know, give us a lot of visibility and predictability into our agency business. They're a part of the revenue and part of the revenue mix that obviously helps us get to the EBITDA for the business in total. You know, we haven't outlined a certain number for that, but it is, it's a good part of our revenue that helps us get more predictability and comfort on that business from a budgeting and pro forma basis on a year-to-year basis.

Benjamin Swinburne (Managing Director and Head of US Media Research)

Got it. Thank you.

James Marsh (Head of Investor Relations)

Thanks, Ben. Next question, Josh.

Ari Emanuel (CEO)

Next question.

Operator (participant)

Your next question comes from the line of Kutgun Maral with RBC Capital Markets. Your line is open.

Kutgun Maral (Media Analyst)

Great. Thank you for taking the questions. I wanted to ask about the Olympics deal and then one on M&A. First on the On Location Olympics partnership, I was hoping if you could help us better understand the financial impacts over the next few years. Jason, I know you mentioned that there will be about $20 million of investments in this year with continued investments in 2023 before profitability in 2024 with Paris. I guess I was hoping for a bit more details on your expectations for 2023 and 2024, since it seems like your earnings will be understated the next two years. It would be helpful for us all to better appreciate these dynamics.Second, can you talk a bit more about your M&A appetite and the deal pipeline going forward now that the Fifth Season deal is behind you and we're getting closer to closing on OpenBet? Has anything changed in your priorities going forward as you balance M&A versus your reiterated outlook for getting leverage to below four times? Sorry, just lastly, any specific areas or verticals of focus with M&A, given your unique position in the ecosystem? Thanks.

Jason Lublin (CFO)

Let me start with the IOC question first. We are expecting to have ramp-up costs. We had some in 2021, and in 2022, we've outlined roughly $20 million. And in probably 2023, I would say a little bit step up a little bit from there. We haven't quantified exactly all those costs yet, but it will be a slight increase over 2022. From a working capital perspective, we also expect to be on sale in Q4 for our first for Paris. From a working capital perspective, we certainly expect to have cash coming into the business from presale starting at the end of the year.From a revenue recognition perspective, we can't recognize any revenue associated with the games until the games actually take place. We will be recognizing all the revenue for Paris in 2024, even though we'll have presales in 2022 and 2023. A similar situation in 2025, with some probably pre-cost for 2026 until we can recognize revenue in 2027 and some costs going into the 2028 revenue as well.

Ari Emanuel (CEO)

As it relates to M&A, you know, as I said to you know, we look at all of our verticals, be it in our owned sports properties, now, betting, and we continue to push in on those as we did with OpenBet for Arena, as we did with NCSA for our academy business. You will continue to see us kinda moving in those directions, as you saw in the events business now with Madrid. From our perspective, those are the things that we look at and we get indications from our global footprint of what rights are available. Also we do it from our representation business, both at IMG and WME.We will continue to do that on a go-forward basis to strengthen our position in the marketplace and grow. I'm not gonna give you any insights into the companies we're looking at, but we have been a very curious company, and I think we've executed well on our M&A strategy in growing the business.

Kutgun Maral (Media Analyst)

That's perfect. Thank you both.

Operator (participant)

Your next question comes from the line of Stephen Laszcz with Goldman Sachs. Your line is open.

Stephen Laszczyk (VP)

Great. Thank you. For Ari, you mentioned it briefly, but could you speak some more about some of the emerging forms of media like social podcasting and some of the Web3 opportunities I think you called out? If you could expand on this, that'd be great. Is this something you think is incremental and can move the needle over the next few years?

Ari Emanuel (CEO)

Well, I mean, if you just looked at the expansion of content from the early days, who knew on the cable side there would be food category. Now podcast is, again, we're platform agnostic in that space. That business has grown significantly with all the players entering the marketplace. We've done a significant amount of deals in the podcasting space, and we've done a significant now the new category is either marketing or NFTs, both for our own sports properties like the UFC and Dapper Labs or with just clients doing NFTs. Those are categories that are growing in addition to social, just on a general basis as we look to our social players on the platforms of TikTok and Instagram, moving them to the traditional business.Those are the areas that when we define content, those are the additional. Most people just think about TV and movies. We look at the full scope of the media landscape and are agnostic, again, to re-emphasize on distribution. Those areas are growing substantially. They have halo effects across the platform on an architecture basis, so that's the way we look at it.

Stephen Laszczyk (VP)

Great. Thanks for that. On sports betting, we've seen a competitive uptick in the industry over the last few months, especially on the back of New York legalizing online betting. I was curious if you could maybe talk a little bit more about what that means for the opportunity you see in your sports business over the long term.

Ari Emanuel (CEO)

I mean, this relates to kind of sports betting in general. It's global. It's going across the United States, and that's positive for sports betting ecosystem as a whole and creates more opportunity for IMG and once we close, OpenBet. When you look at what we have when you combine OpenBet with IMG Arena, we have the full menu for sports teams and leagues on a global basis, whether it be player wallets, content, data feeds, live streams. From our perspective, layering it, we become a one-stop shop. Again, different from our competitors. Both businesses are very profitable.As Jason mentioned, you know, there's, we believe, significant revenue synergies, and growth potential across the globe with those two businesses as we become a one-stop shop, different from any of the competitors on a full scale basis.

Stephen Laszczyk (VP)

Great. Thanks for that.

James Marsh (Head of Investor Relations)

Thanks, Stephen. Next question, please, Josh.

Operator (participant)

Your next question comes from the line of Rich Greenfield with LightShed Partners. Your line is open.

Rich Greenfield (Partner and Media and Technology Analyst)

Hi. Thanks for taking the question. I'm gonna start out on the representation business, and then Brandon's gonna tag team and ask a question on UFC. Ari, when David Zaslav from Discovery, soon to be Warner Bros. Discovery, was on his last earnings call, he basically made a comment to the effect of, it's not about having the most content, it's about having sort of just enough, like in the cable network world of having, you know, a show or two that people really love. I know you're doing a lot with Apple and Amazon and Netflix, who are obviously gunning for a tremendous amount of content.I guess I'd love your view of do you think that the Discovery's, the Peacock's, even the Paramount+'s, do they all come to the realization that they need far, far more content than they're currently creating in their digital plans? Just how do you think that plays out? 'Cause I think that's a big question in terms of how much bigger the spend gets, both on TV and movies over the next several years. Brandon will follow.

Ari Emanuel (CEO)

No problem. I mean, if you just look at some reports, the spend is gonna be upwards of $140 billion across all the platforms. You know, David and I joke about kind of how much money he's gonna have to spend with me to kind of compete. I don't think he did this because he was in the middle and not at the end to compete when he was just Discovery. I don't believe any of them are not spending money on content. He now spends anywhere from, I think it's $20 billion plus.From our perspective, whether it be Amazon, Apple, Netflix, Discovery, Warner, Peacock, Paramount, Roku, Disney, Hulu, the competition could be if one of them drops out or goes down a little, it doesn't really affect that. As I said, we're platform agnostic. As we once talked, you and I, about the movie business, you know, during the pandemic, there was only three buyers. You now have, as I said to you, there would be a robust theatrical business, whether that be Uncharted, Spider-Man, Batman. That business is now coming on with the pandemic kind of and the restrictions moving off. There's even more competition. I'm not really nervous if he decides that he doesn't wanna spend. Everybody else is spending. Again, there's seven, eight players in the marketplace, so.

Brandon Ross (Partner and Media and Technology Analyst)

Great. This is Brandon Ross. UFC fighter comp and benefits have become a real hot topic of conversation lately. I know that's been elevated by Jake Paul. Was just wondering if you could give your perspective on why the overall splits have ended up where they are and what your outlook is there, whether we should expect?

Yeah, the relative share that fighters are getting.

Ari Emanuel (CEO)

Right

Brandon Ross (Partner and Media and Technology Analyst)

Of the revenue pool to go up in time or stay kind of where it is?

Ari Emanuel (CEO)

On our last earnings call, I think this was a question also. Not exactly this question, but similar. You know, we've increased fighter pay. I wanna make sure I'm right, about 400%.

Jason Lublin (CFO)

600%

Ari Emanuel (CEO)

600% since 2005. We're investing in the business with Performance Institute, food, recovery. We have done and now participation in Dapper Labs and NFTs in the kit. We think we've done very, very well, and as the revenue for the business increases, it has only benefited that business, and we've grown, and the sport has grown, and fighter pay has grown, too. As I said, you know, how much it's gone up since 2005.

Brandon Ross (Partner and Media and Technology Analyst)

I think the pushback that's out there, though, is that your overall revenue base at UFC has grown much more than that 600%, I believe. What the overall relative share should be?

Ari Emanuel (CEO)

Well, I'm not commenting on that. I think we've done very well as it relates to the pay for the fighters.

Brandon Ross (Partner and Media and Technology Analyst)

Great. Thank you.

Ari Emanuel (CEO)

Next question.

James Marsh (Head of Investor Relations)

Thanks, Brandon. Josh, can we have the next question, please?

Operator (participant)

Your next question comes from the line of Meghan Durkin with Credit Suisse. Your line is open.

Meghan Durkin (Research Analyst)

Hi, guys. Ari, as sports betting platforms like DraftKings bring their technology in-house, will they still need OpenBet? Maybe what do you see as the opportunity for the revenue synergies over time? I think you've outlined $100 million of revenue synergies over the next several years.I wanted to follow up on the Minor League deals, which you haven't touched on today. I don't think I heard you talk about them in the guidance. Are they included in the guidance? What's the timing of that? Maybe outline sort of the strategy with those stadiums, how you're gonna be using the platform to sort of supercharge those assets.

Ari Emanuel (CEO)

As it relates to DraftKings bought SBTech, as you know. The business that we're in, it's a global business, so our platform, whether it be in Greece, whether it be in the Middle East, or Latin America, there's a huge market for our one-stop shop. I think Jason mentioned $100 million of revenue synergies. You know, we're with FanDuel and we're. It also can be an à la carte service, so it doesn't have to be one service fits all of the services. If certain people just want the data and the feed, they can take that. If they want the player wallet or the content, they can do that.We feel very good about where we sit on a global basis with regard to that offering across the globe, so.

Jason Lublin (CFO)

As far as it relates to Diamond Baseball Holdings, those numbers are in the guidance we gave you today. We closed six deals at the end of last year, an additional four teams at the beginning of this year. You know, and the plan there is to do similar to what we've done with the other sports leagues we own, which is, you know, use our best practices to drive sponsorship revenue, ticket revenue, and really, you know, synergize those businesses and really professionalize them in one organization.

Meghan Durkin (Research Analyst)

Okay, thanks.

James Marsh (Head of Investor Relations)

All right. Thanks, Meghan. Next question, please, Josh.

Operator (participant)

At this time, I would like to remind everyone, if you would like to ask a question, please press star then the number one on your telephone keypad. Your next question comes from the line of David Joyce with Barclays. Your line is open.

David Joyce (Managing Director and Senior Equity Analyst)

Thank you. First, a clarification, please. The guidance for this year, does that include OpenBet from your expected acquisition date? And I appreciate that you provided, you know, the growth excluding Endeavour content.How can you help us think through what your true organic growth is for all of the underlying businesses if you were to need to exclude, you know, On Location, NCSA, you know, that sort of thing?

Jason Lublin (CFO)

In our guidance, we have included our expected OpenBet and our expected timeline, which is Q3 of this year forward. From an organic basis, you know, look, we're getting growth across all our businesses, across the entire platform in all segments. You know, M&A is a big part of what we do and core to our business. What I would say is we feel very good about the overall growth we get. Organic is a very big part of that overall growth we're getting across the company.

David Joyce (Managing Director and Senior Equity Analyst)

If I could just drill down a bit more on the consumer demand for the events and looking at how things are trending versus the pre-pandemic levels. What are you seeing in the near term in terms of the supply of these events? You know, anecdotally, there have been some sets of tickets going straight to discount platforms. Just wondering if there's maybe some near-term supply issues or concerns, you know, given gas prices and consumer discretionary spending, given that there's also the balancing of the staycation versus vacation kind of consumer discretionary spend. Just was wondering what kind of trends

Ari Emanuel (CEO)

Yeah

David Joyce (Managing Director and Senior Equity Analyst)

You're seeing in the short term.

Ari Emanuel (CEO)

No problem. As you saw in the Live Nation earnings, they're seeing very high demand for events. As we look from us, as it relates to Winter Wonderland, sold out. Frieze in L.A. sold out. Our pay-per-view events, as we've mentioned, sold out. Super Bowl sold the best it's ever sold. We are seeing high demand as it relates to our events. From our perspective, people wanna get out and wanna have experiences. We're feeling, you know, we're seeing very high demand for those.

James Marsh (Head of Investor Relations)

Thanks, David. Operator.

David Joyce (Managing Director and Senior Equity Analyst)

All right. Thanks

James Marsh (Head of Investor Relations)

Do we have any final questions?

Operator (participant)

There are no further questions at this time. I'll turn the call back to Ari Emanuel for closing remarks.

Ari Emanuel (CEO)

Thank you very much. I appreciate your time, everybody. I'm proud of what our team accomplished this past year and considering the external headwinds. We built a diversified business that's platform agnostic that I've mentioned. We're in every major secular trend category, be it content spend, experience economy, or sports betting. We're growing at double digits, and we believe we're significantly outpacing industry averages. We have great momentum, and given our position and the results to date, we're guiding to revenue and EBITDA both up over 20% with expected margin expansion. I just wanna remind everybody of that. With that, we look forward to updating you on our progress going forward. Thanks, everybody.

Operator (participant)

This concludes today's conference call. Thank you for joining. You may now disconnect.