Endeavor Group - Q4 2022
February 28, 2023
Transcript
Operator (participant)
Good afternoon. Thank you for attending today's Endeavor full year and Q4 2022 results conference call. My name is Alicia, 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 Q&A 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 your host, James Marsh, Head of Investor Relations with Endeavor. You may now proceed.
James Marsh (Head of Investor Relations)
Good afternoon, and welcome to Endeavor's Q4 and full year 2022 earnings call. A short while ago, we issued a press release, which you can review 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 will hear from Endeavor's CEO, Ari Emanuel, and CFO, Jason Lublin, before we open for questions. The purpose of this call is to provide you with the information regarding our Q4 and full year 2022 performance, in addition to our financial outlook for 2023. 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 prove incorrect, our results may differ materially from those expressed or implied by such forward-looking statements and projections. Forward-looking statements speak only as of the date they were made. 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 our reported results can be found in our press release issued today, as well as in the non-GAAP financial information posted on our IR website.
With that, I'll turn it over to our CEO, Ari Emanuel.
Ari Emanuel (CEO)
Thanks, James. Closing out our first full year as a public company, we are encouraged by our performance in 2022. We saw strong growth across our segments. Our business has proven resilient despite ongoing macroeconomic headwinds. We continue to execute on our long-term strategy. As 2023 comes into focus, the IP, content, talent, experiences, and brands that tap into the Endeavor flywheel are more valuable than ever. At Endeavor, we have built a global sports and entertainment company unlike any other. We own valuable sports IP. We supply content to a robust group of media, tech, and streaming platforms, all of which continue investing in premium sports and entertainment content to attract customers and keep them engaged. We help the leading talent and brands we represent commercialize their art, expand their reach, and tell their stories.
Our diverse live events and experiences portfolio continues to capitalize on consumer demand for unique, dynamic ways to engage with the sports and cultural experiences they love. In 2022, we enhanced our betting technology offering to better serve the global sports betting industry. The strength and consistency of our financial performance is a direct result of our unique portfolio, which provides multiple lanes for growth and helps insulate us from volatility in any one area. As just one example, revenue from WME's 3 largest SVOD buyers in the aggregate represented only approximately 2% of overall company revenue in 2022. We remain well-positioned even as distributor strategies evolve. Today, I'll spend a few minutes sharing how we have delivered shareholder value in line with our stated goals for the year.
I'll turn it over to Jason, who will share more details on our results for the Q4 and full year 2022. He will also discuss our outlook for 2023. Reflecting on last year, we grew both revenue and profitability by double digits in our own sports properties segment. Years ago, we made the strategic decision to move further into ownership of events and premium IP that can benefit from the Endeavor flywheel. Our businesses, including UFC and PBR, are proving the model. Both organizations recorded record revenue last year. All 21 UFC events with live audiences sold out, continuing a 29 event sellout streak since returning from the pandemic. UFC posted its best sponsorship year ever in 2022, unlocking new categories and inventory to reach a fan base that grew double digits over 2021 in the U.S.
It also continues to be an industry leader in digital engagement. UFC's social media accounts now have more than 220 million followers combined. TikTok followers alone grew 55% year-over-year. Professional Bull Riders' newly launched Team Series finished a strong first season, drawing nearly 200,000 attendees and delivering record-setting attendance in multiple markets. Given its early success, we are planning to expand from 8 to 10 teams this year. We anticipate selling those 2 additional teams at a starting price of $20 million each. In our representation segment, WME delivered solid financial results with growth from bookings across virtually all the mediums we touch.
We secured key talent deals for more than 310 scripted series on broadcast, cable, and streaming channels. Our clients wrote and or directed 5 of the top 10 films at the domestic box office. Beyond TV and film, WME closed deals for more than 200 new books, including 57 New York Times bestsellers. Signed deals for 300 books to be adapted into movies and TV shows. Our music team booked more than 40,000 engagements in 2022. Our comedy touring segment also had a huge year with Bill Burr at Fenway Park becoming the highest-grossing solo stand-up comedy show of all time. WME Sports continues to make its mark representing the world's leading tennis players and delivering some of 2022's biggest sports broadcasting deals. The rise of WME Sports is clear to the market.
The agency jumped up 10 spots in Forbes' most valuable sports agency list. Our events, experiences, and rights segment also saw strong revenue and profitability growth in 2022. One of our premier events, Hyde Park Winter Wonderland, celebrated its 15th anniversary by breaking its consumer revenue record up double digits over 2021. 2022 also marked On Location's single largest hospitality event of all time with Super Bowl LVI, and the Madrid Open hosted a record 300,000 attendees in its first year as part of our portfolio. We also continue to benefit from continued competition for domestic and international sports media rights. Ampere's latest data shows the global market for streaming sports rights will rise 64% in 2023 to $8.5 billion.
In 2022, IMG Media advised the Big Ten Conference on deals worth more than $8 billion over 7 years and closed new EuroLeague deals with significant increases in key markets, including France and Germany. We also helped deliver a record-breaking set of deals for Cricket South Africa, as well as multiple new sizable deals for UFC, Wimbledon, and the Big 12 Conference, among others. 2022 was also a standout year for our IMG Academy business, where we had record enrollment across the boarding school, summer camps, and online college recruiting services, further establishing its position as a leading sports and education brand. We also strengthened our sports betting and data offering, closing our acquisition of OpenBet, a leading business-to-business sports betting technology company.
Paired with our IMG ARENA business, we're now able to offer a true end-to-end solution for sports books and rights holders, creating complementary offerings that enhance demand and engagement. With this business built out, we've created a 4th segment, sports data and technology. On the balance sheet, we continue to execute with financial prudence. We promised last year we would get our net leverage below 4x by year-end. We delivered on that promise, closing out 2022, having paid down half a billion dollars of debt, and we will continue to pay down debt in 2023. Looking ahead, we believe in the strength of our portfolio and the durability of our long-term strategy. We are focused on owning, managing, and operating the best sports and entertainment assets in this experience economy.
Our unique flywheel, capabilities, and insights position us as a first mover in identifying trends, making connections across our ecosystem of talent, brands, and assets, and generating growth opportunities while diligently managing our capital. This puts us in a great position to continue delivering on our strategy in 2023. With that, I'll hand it over to Jason to talk more about the Q4 and the full year 2022, as well as our outlook for 2023.
Jason Lublin (CFO)
Thanks, Ari, and good afternoon, everyone. I'll start by walking you through our financial results for the Q4 and full year. I'll also provide you with some color on what we're seeing in each of our operating segments. Any comparisons, be it annually or quarterly, will be in reference to the COVID-impacted prior year of 2021. For the quarter ended December 31st, 2022, we generated $1.26 billion in consolidated revenue, down $245.1 million or 16%. The Q4 of the prior year included $332.8 million of revenues from the restricted Endeavor Content business, which we sold in January of 2022. Excluding revenues related to this business, consolidated revenues would have been up $87.7 million or 7%.
Adjusted EBITDA for the Q4 was $239.6 million, up $10.2 million or 4%. The Q4 of the prior year included $4.3 million of Adjusted EBITDA from the restricted Endeavor Content business, as well as the benefit of $26.1 million of insurance recoveries related to events from earlier in the year as well as 2020. For the full year, revenue was $5.268 billion, up $190.4 million year-over-year or 4%. Adjusted EBITDA was $1.164 billion, up $283.2 million year-over-year or 32%. The prior year included $737.4 million of revenue and $13.3 million of Adjusted EBITDA from the restricted Endeavor Content business.
Excluding revenues related to that business, consolidated revenues would have been up $927.8 million or 21%. Before I get to our net results for the quarter and full year, I want to spend a moment on our Tax Receivable Agreement. As you may recall, the TRA has previously been disclosed in our SEC filings and generally requires us to pay TRA holders who are primarily pre-IPO investors for certain tax benefits they transferred to the company. Prior to the Q4, we had not met the required accounting criteria to record certain deferred tax benefits or the associated TRA liability and had maintained a valuation allowance against these benefits.
As of year-end, we met the required criteria to release this allowance, and in the Q4, we recorded deferred tax benefits of $746 million associated with our TRA and a TRA expense of $812 million. We expect future TRA exchanges to primarily be recorded through equity now that the valuation allowance has been released. In addition, as indicated in our 10-K, we expect TRA payments to be made primarily over 15 years. Now moving to our net results. The Q4 had a net loss of $225.7 million compared to a net loss of $16.7 million a year ago.
Our net loss for the quarter is driven by the net impact of the tax benefits and associated TRA expense just discussed, as well as losses from affiliates. For the year, net income was $321.7 million, compared to a net loss of $467.5 million a year ago. This change in net income was largely driven by the improvements in operating income and the gain from the sale of our restricted Endeavor Content business, which was partially offset by the net impact of the tax benefits and associated TRA expenses. This year's results also include greater losses from affiliates as compared to the prior year. For the full year, we generated free cash flow of $355 million, defined as cash from operating activities less CapEx.
The difference between our reported free cash flow and our forecast was primarily driven by the timing of cash payments and collections related to On Location to IOC business. Our IOC initiative remains on track. I'll walk you through each of our segments. Our Own Sports Property segment generated revenue of $301.4 million in the Q4, up $24.1 million or 9%, while the segment's Adjusted EBITDA for the quarter was $142.4 million, up $17.3 million or 14%. On the year, the segment generated $1.3 billion in revenue, up $224.1 million or 20%, and $648.2 million of Adjusted EBITDA, up $110.5 million or 21%.
Looking back on 2022, UFC set 11 arena records for highest grossing events, including 4 of the highest grossing fight nights in the U.S. and the 2 highest grossing fight nights in UFC's history, both at London's O2 Arena. Over the course of the year, we renewed 10 international media rights deals. Our aggregate AAV remains in excess of 100% over prior deals since we began t racking in 2-2 of 2021. UFC also had its highest sponsorship sales in the company's history. We added several new sponsors to our roster like VeChain, New Amsterdam Vodka, and Project Rock. We also introduced new categories like the official electric commercial truck, the official law firm, and the official ready-to-drink partners of the UFC. Beyond new sponsors, we're leveraging the technology of 4D Sight to digitally create more inventory in and around the Octagon.
2022 was also the UFC's best year for consumer product sales, most notably within the video game, trading card, and NFT categories. Moving to PBR, we successfully launched the Team Series, selling all 8 of our team sanctions. PBR also signed Stillhouse Vodka, ZipRecruiter, MGM, and the Las Vegas Convention and Visitors Authority as Team Series sponsors. Over the course of the year, we saw over 1 million combined fans attend our Unleash The Beast, Pendleton Whisky Velocity Tour, and Team Series events. Turning to events, experiences, and rights. The segment recorded revenue of $557.7 million in the quarter, up $41 million or 8%, and adjusted EBITDA of $52.4 million, down $2.4 million or 4%.
On the year, segment revenue was $2.5 billion, up $420.7 million, or 21%, and adjusted EBITDA was $342.6 million, up $127.1 million, or 59%. Segment revenue and adjusted EBITDA growth in the year was driven by heightened consumer demand and lifted restriction for live events and premium experiences such as the Miami Open, Super Bowl LVI, and the NCAA March Madness games, as well as the inclusion of the Madrid Open and OpenBet. We saw increased boarding school and summer camp enrollments at IMG Academy and a full year contribution from our NCSA Collegiate Athlete Recruiting Network. Growth was partially offset by the expiration of certain previously disclosed media contracts that were not renewed. Moving on to our representation segment.
Revenue in the quarter was $408.5 million, a decrease of $309.4 million, or 43%. Q4 2021 included $332.8 million of revenue from the restricted Endeavor Content business. Excluding that, segment revenue would have been up $23.4 million or 6%. Segment adjusted EBITDA in the quarter was $123.9 million, up $5.5 million or 5%. Q4 2021 included $4.3 million of adjusted EBITDA from the restricted Endeavor Content business. Excluding that, adjusted EBITDA would have increased $9.8 million or 9%.
For the full year, representation segment revenue was $1.5 billion, down $447.6 million or 23%, and adjusted EBITDA was $469.8 million, up $86.4 million or 23%. The prior year included $737.4 million of revenue and $13.3 million of adjusted EBITDA from the restricted Endeavor Content business. Excluding that, segment revenues would have been up $289.8 million or 24%, and segment adjusted EBITDA would have been up $99.7 million or nearly 27%. Growth in this segment was driven by our core agency business, primarily from the demand for premium content and the continued recovery of live entertainment such as music and comedy touring.
Additionally, our 160/90 marketing business saw increased spend from corporate clients, specifically from experiential partnership and advertising services. Before I share our outlook for 2023, I want to give an update on our capital structure. We ended the year with $5.2 billion in debt and $767.8 million in cash, resulting in $4.4 billion in net debt. At year-end, our net leverage was approximately 3.83 times. Our aggregate fixed-rate debt is now approximately 43% of our outstanding total debt. As a result of our operating performance and voluntary debt pay down of roughly $500 million, S&P Global Ratings recently raised our issuer credit rating to B+. We plan to continue delevering through growth and adjusted EBITDA, free cash flow generation, and we'll make additional voluntary debt repayments in the year.
Finally, I'd like to share our current outlook for 2023. I'll first discuss our guidance on a consolidated basis and then provide some additional detail by segment. As we've said previously, we believe our company's results are best evaluated on a full year basis, given quarterly fluctuations related to the timing of events, content deliveries, sales cycles within our media and gaming businesses, as well as business transactions on behalf of our clients and brands. We expect consolidated revenue for the year to be between $5.825 billion and $5.975 billion, or 12% growth at the midpoint of the range. On adjusted EBITDA, we're expecting a range of $1.25 billion to $1.305 billion, or 10% growth at the midpoint of the range, implying approximately 22% margin on the year.
We expect free cash flow between $545 billion to $605 billion, or a midpoint of $575 billion, representing 62% growth over last year. Now let me provide you with some color on our 2023 guidance by segment. Starting with our own sports property segment, we expect continued growth at UFC and PBR, offset by the sale of Diamond Baseball Holdings. At UFC, we anticipate the same total number of events, but with more U.S. events outside of our Apex arena, more international events, and overall more marquee events, all of which carry a higher cost structure. This in turn impacts margins, bringing UFC close to our global fan base remains a major strategic priority for our growth.
We also expect to have high margin side fees for 3 to 4 of our live events, an accelerating light on with strong growth potential. We're excited to be returning to London's O2 Arena in March. We're headed to Miami in April. We've announced our new season of The Ultimate Fighter, concluding with an expected matchup between Conor McGregor and Michael Chandler. Additionally, we're continuing to invest in the sport's growth with a new performance institute in Mexico. At PBR, we expect continued momentum with a full year slate of events from our Unleash the Beast and Pendleton Whisky Velocity tours, as well as the second year of our team series. We also expect growth in all aspects of the business, most notably live event revenue.
For events, experience, and rights, we expect continued segment revenue growth driven by live events and experiences, sports production, the return of the biannual Ryder Cup, and a full year with Barrett-Jackson. Segment profit growth will continue to be impacted by our ongoing investment in On Location to IOC initiative. We are continuing to build our sales, marketing, and ticketing technology functions to ensure we deliver a premium experience for our customers. We anticipate a multiple 9-figure profit opportunity across the 3 upcoming Olympic Games. In our representation segment, we expect growth across all our businesses, led by WME, as we expect continued demand for premium content, including sports, music, and fashion. We also expect strong revenue growth from our non-scripted business, driven by increased demand and timing of project deliveries.
In connection with our Q1 2023 earnings, we will be reporting our new sports data and technology segment, which will include our IMG Arena business and the recently acquired OpenBet. At the time of the announced acquisition, we provided a full year 2022 revenue projection of $340 million for the combined businesses. For 2023, we expect double-digit top line growth off of those initial projections. We also expect revenue and adjusted EBITDA to be back-end loaded and to build largely sequentially as the year progresses. We expect Q1 to be the smallest due to seasonality and cadence of the sports free service and timing of client renewals. We continue to show resiliency in the face of an uncertain macro environment. As we look ahead, we remain confident in our ability to continue executing on our strategy.With that, I will hand it back to James for Q&A.
James Marsh (Head of Investor Relations)
Thanks, Jason. Alicia, can we open it up 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 2. Again, to ask a question, press star one. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. We'll pause here briefly as questions are registered. The first question comes from the line of Ben Swinburne with Morgan Stanley. You may now proceed.
Ben Swinburne (Equity Research Analyst)
Thanks. Good afternoon, guys. Ari, maybe I'd love to get your thoughts on the representation outlook in a little more detail. You know, your guidance for 23, you know, double-digit top line certainly suggests you expect another year of growth at WME in particular. I wanted to get you to talk a little about the drivers of that growth, the visibility into that growth, and your confidence in that growth, just given, you know, we've been through another earnings season where all we hear about is sort of content spending, you know, coming down across the big streamers. Tell us a little bit more about why your business continues to do as well as it's doing in that backdrop. Then I had a quick follow-up for Jason on the balance sheet.
Ari Emanuel (CEO)
Okay. I think kind of there's 2 questions there. Kind of what do you see for the industry and how do you see the impact on our business at Endeavor? We continue to see steady demand for premium sports and entertainment content. Some spending more, some spending less. Strategies change. We're well-positioned. If you look at the resurgence of theatrical, I know you're not gonna believe this, Ben, I actually did read your early report. You talk about the rebound in the theatrical segment, you're talking about a 25%, you know, outpacing 2023 outpacing 2022. The SVODs service are expected to increase their spend on sports rights by 64% in 2023 compared to last year.
You know, Jason will go into the diversification of the company and the platform, but we see no slowdown. It's just kind of moving around. Everybody has a different strategy in their spend.
Jason Lublin (CFO)
Yeah. Ben, I would just add that, you know, over 50% of the agency revenue comes from non-what's called TV and film business. We've seen continued strength. Q4 2022 was bigger than Q4 2023 for our talent and motion picture business. We continue to find, you know, represent increasing a wider breadth of increasing types of talent and types of content as well. You know, every year, you know, we continue to increase our back ends, and that's our back ends through books, that's our back ends through theater, TV, and film as well. We feel we're well-diversified right now.
Ben Swinburne (Equity Research Analyst)
That's great. Jason, As the leverage came down faster than at least we were expecting in Q4, it was a strong cash flow quarter. Thank you for the free cash flow guidance for 2023. What are you thinking for interest expense, just given where rates are? Why not pay down more debt? You're carrying a lot of cash. I don't know if you need to carry, you know, $700 million of cash. I know you're getting ready for the Olympics and everything, which is a lot of working capital. That's still a ways out. Just any thoughts on paying down debt more quickly? Thanks.
Jason Lublin (CFO)
Yeah. Yeah. No, no problem. Look, as I already said in his prepared remarks, and I do too, we are committed to paying down more debt. You know, we do have, you know, $767 million plus of cash on the balance sheet. As you pointed out, we're expecting really good free cash flow generation, $575 million at the midpoint. It's certainly on our agenda, and it's something we're gonna get to in 2023. As far as interest expense goes, we are budgeting interest expense to be up over 2022 based on rates. Obviously, that'll be impacted some to some degree, when and how much debt we pay down as well.
Ben Swinburne (Equity Research Analyst)
Okay. Thank you, guys.
Operator (participant)
Thank you, Mr. Swinburne. The next question comes from the line of Jessica Reif Ehrlich with Bank of America. You may now proceed.
Jessica Reif Ehrlich (Managing Director)
Thank you. I have 2 questions. The first one is on On Location or... Like, could you just talk about where you see this business going over time? Like, obviously, this year is year of investment, and then next year is, you know, the Olympics, which should be a good year for you. What does this look like at maturity? What do you think, you know, your margins and, you know, where, what kind of revenue growth can you have? I have a separate question.
Ari Emanuel (CEO)
All right. I'll do the front end of that, and maybe Jason can go into the margins, et cetera, Jessica. We acquired the On Location business in 2020. Given the pandemic, 2022 is really our first year to realize our growth ambition. I'm getting feedback here. I think we've developed a unique product for the consumer. There's high-end demand for tailored experiences. The TAM on that and the experience economy is pretty high right now. We've added several different offerings. The WWE's one, March Madness games is another, the IOC. We've also incorporated a bunch of our own assets, which is UFC, Barrett-Jackson, the property we just bought, the Madrid Open, which is our tennis tournament in Spain, Miami Open, and Frieze.
If you just kinda think about it, our Super Bowl packages for the Super Bowl packages in California, upwards. Some of the packages were going for $100,000 each. UFC 281 packages were going up for upwards of $50,000. We intend to replicate that model for some of our other marquee events. With that, you know, as Jason stated, there are multiple 9-figure deal for our opportunity in the 3 Olympic Games, so we feel very good about that. We're constantly on the lookout for other major properties that we can add to the portfolio. With that, I'll get Jason to talk about the kind of-
Jason Lublin (CFO)
Yeah. The only other thing I would add from a margin perspective, you know, we certainly see this business in line with the margin for the overall EENR segment on a normalized basis.
Jessica Reif Ehrlich (Managing Director)
Okay. Thank you. Then, just Ari, could you comment on your views on a potential work stoppage? Like, what was the benefit of using Speechify for your opening comments?
Ari Emanuel (CEO)
You said you were going to ask one question. That was 2 questions, but I'll start with the first one.
Jessica Reif Ehrlich (Managing Director)
It was 2. It was a sneaky 2.
Ari Emanuel (CEO)
I know. It was a sneaky 2. Here's what I would say to you. On the strike level, there's important issues on both sides here. We support our clients as they work through the issues with the studios. There's a date, I think, on March 20th that the studios and the Writers Guild are meeting. Hopefully, they'll solve and resolve their issues. I've been through many strikes before. Compared to last time, this one's very different, and our company is very different. I think we're pretty well-positioned as it relates to the strike. I don't, you know, if the strike is gonna happen, it's probably gonna be somewhere, you know, somewhere later in the year. Have no idea how long it's gonna last.
You know, we have a lot of, as Jason said, a great deal of our percentage of our economics comes outside of the writing, directing business, whether that be lectures, books, sports, theatrical, fashion, et cetera. I think we're differently positioned from others if there is gonna be a strike. Speechify, we've been in business with them. We thought with all the conversation around AI, it was pretty interesting. We're in business with them. We think they're a really good company. Thought it was a proper time to kind of put this into our into our quarter, and for you guys to hear what it's like.
Jason Lublin (CFO)
Next question. Alicia.
Operator (participant)
Thank you, Ms. Ehrlich. The next question comes from the line of John Hodulik with UBS. You may now proceed.
John Hodulik (Media and Telecom Analyst)
Yeah. Thanks, guys. Just a quick question on the M&A environment, especially now that you guys are down below 4 times. I mean, does it make you guys sort of think more aggressively about potential acquisitions? Obviously the big one out there, seems to be WWE. Just any initial thoughts or how you you know, some commentary on how you look at that entity and any comments It looks like Vince thinks it's worth $9 billion. Just any thoughts or color you can provide there would be great. Thanks.
Ari Emanuel (CEO)
One is we don't, unless you want me to go to jail, we don't comment on our M&A practices. Here's what I would say to you is we're truly focused, as Jason said, on delevering. We're not gonna do anything that would increase our leverage at this point in time. I would just say as it relates, we constantly are looking at things out there, but we're not gonna leverage ourselves up because we've done a good job of delevering, and we're gonna continue to deleverage. As it relates to the WWE, it's an unbelievable product. Vince is an unbelievable, you know, created a great business. We've had a long-standing relationship with them over 2 decades. We're doing, as I indicated, On Location business with them, Endeavor Streaming business with them.
You know, we, you know, his business is really valuable. We're not gonna do anything as it relates to kind of changing our leverage position right now. Jason, I don't know if you have any other comments.
Jason Lublin (CFO)
Yeah. I would just add, you know, given, you know, we have, you know, over $750 million of cash on the balance sheet and projecting a really good cash flow generation this year, that we certainly feel we have the ability to keep executing on M&A. We're an acquisitive company, with using our cash and our public equity as deal closing currency in order to execute on our strategies and still remain sub 4x. As Ari said, and I've said, we're committed to continuing to deleverage and, you know, we'll view all this opportunity through, you know, capital allocation and the best use of capital for the company to create the most shareholder value.
John Hodulik (Media and Telecom Analyst)
Great. Thank you, guys.
Operator (participant)
Thank you, Mr. Hodulik. The next question comes from the line of Kutgun Maral with RBC Capital. You may now proceed.
Kutgun Maral (Equity Research Analyst)
Great. Thanks for taking questions. I wanna ask about your views on the Endeavor portfolio, also had a question on representation. First, big believers on the Endeavor story continue to see a significant gap between the stock price and the intrinsic value of the company and each of its businesses. Clearly, it's a challenged backdrop because of investor concerns over the macro environment. How would you characterize your patience level in waiting to have the market better appreciate the story and flywheel? Is there any appetite to perhaps consider separating some of the businesses to crystallize value quicker, like the UFC? Then I had a follow-up question on representation.
Ari Emanuel (CEO)
You know, I was on the board of Live Nation when it was $200. I'm really patient. We've now just created a 4th segment. We're breaking out in E&R kind of our 15 big events of the year. I think you guys are just understanding all of our different segments. We're trying to get you more clarity. We're really patient. We're long term. I believe that you guys are gonna realize the value of each of our segments as time goes on. It's only been one year, so we feel good about our businesses. I don't think you guys realize the value of Fifth Season, and we sold it for $1 billion. I think you guys want to do some more work, and we help you in that way.
You'll realize the value of all of our different segments. We're really patient about it. We're gonna continue to pay down debt. We're gonna continue to grow those businesses as we have been growing those businesses. I think we're uniquely positioned on the supply side of the business for where the business is going, and we're very diversified.
Jason Lublin (CFO)
I would just add, as Ari said, you know...
Kutgun Maral (Equity Research Analyst)
That's very helpful.
Jason Lublin (CFO)
Really our first full year operating as a public company, you know, in the backdrop of a tough macroeconomic environment. You know, we're, you know, putting a guide out, double-digit revenue growth, double-digit EBITDA growth for 2023. We're really just focused on continuing to operate the business and making the right decisions for the business over the long term.
Ari Emanuel (CEO)
Great. You had a follow-up question?
Kutgun Maral (Equity Research Analyst)
Yeah. Yeah, that's great. Thank you both. I had another question on the representation business and was hoping you could help unpack that segment a bit. I assume the core agency business is about maybe 2/3 of the segment, followed by marketing and licensing. Jason, if I heard you correctly earlier, you mentioned that 50% of the agency business revenue comes from non-TV and film. I assume that's perhaps across fashion, sports, comedy, and music, but I'm not sure. We on the outside might have a view on the industry content spend environment overall, but maybe we're a little bit less clear on what the growth trajectory of the rest of the 50% of the business looks like. Any color there would be appreciated. Thank you.
Jason Lublin (CFO)
Look, we're not going to give sub-segment information as far as what the breakout of the revenue is. You know, we have stated before that it is the biggest part of the representation business. You know, the agency is very diversified. You know, you have TV, film.
Ari Emanuel (CEO)
Tour
Jason Lublin (CFO)
... tour, music, books, theater, lectures, et cetera, et cetera. You know, we're seeing growth in all segments of our representation business. I mean, quite frankly, you know, accelerated growth in some segments outside of TV and film as well. We feel really good where we sit in the space and the diversification of the platform.
Kutgun Maral (Equity Research Analyst)
Thanks again.
Operator (participant)
Thank you, Mr. Maral. The next question comes from the line of Tom Champion with Piper Sandler. You may now proceed.
Tom Champion (Director and Senior Research Analyst)
Hi, good afternoon. Appreciate on the color on UFC into next year. It sounds like maybe there's a margin headwind. Just curious if there's a way to think about top-line growth over the next year or 2 up until the renewal period and the key drivers of that growth, whether that be at, you know, events, sponsorships, you know, the key drivers there. Maybe a second question, if I can. 2 quarters removed from the close of OpenBet acquisition, just curious, any early learnings there or other synergies you're finding in the business? Thank you.
Ari Emanuel (CEO)
On the UFC, you know, I'll just give you some of the headlines. We went from 8 figures to 9 figures. There's still more on the sponsorship side we can do. International sales, I think as Jason mentioned in his opening remarks, we're up over 100%. I'm not commenting on the domestic deal. We've had 29 sellouts in a row. We're doing great yield management on our ticket sales. We've just added On Location. Our licensing business is going exceedingly well. We've sold Fight Pass and The Ultimate Fighter. Also remember, we have the commercial pay-per-view rights in the United States, and we have the pay-per-view rights internationally with Fight Pass. There's a lot of drivers there that have continued upside for the business without even discussing the domestic deal.
What was the second question?
Jason Lublin (CFO)
Oh, no. As far as.
Tom Champion (Director and Senior Research Analyst)
Great.
Jason Lublin (CFO)
As far as OpenBet.
Tom Champion (Director and Senior Research Analyst)
That's very helpful. Just curious, any OpenBet early learnings, just any comments there?
Jason Lublin (CFO)
Yeah, look, I mean, new acquisition for us. We closed in Q4, so still very early in the integration phase, but very happy with what we've seen so far. You know, we previously gave, you know, revenue guidance for 2022 of roughly $340 million. We're expecting double-digit growth on that as a combined entity in the new sector going forward. It's early, but from what we see, we're very happy with what's going on in that entity, and where we were gonna go on revenue synergies and margin expansion over time.
Ari Emanuel (CEO)
Thanks, Tom.
Tom Champion (Director and Senior Research Analyst)
Great. Thank you.
Operator (participant)
Thank you, Mr. Champion. The next question comes from the line of Stephen Laszczyk with Goldman Sachs. You may now proceed.
Stephen Laszczyk (VP)
Great. Thank you. Good afternoon. Can you talk a little bit more about some of the recent trends you're seeing on the event side of the business as we start to think ahead to maybe the middle and back parts of the 2023 slate? How have ticket sales been trending? How has pricing trended for some repeat events that you're comping last year? Have you seen any pockets of moderation from the consumer thus far that are noticeable?
Ari Emanuel (CEO)
You know, I'd say, to date, we see limited impact of what we're all seeing in the, you know, we're all reading about inflation, et cetera, et cetera. We see solid performance across the board. Whether that be in my opening remarks, I said 300,000 people attending the Madrid Open. Frieze Seoul was very well done. The Frieze Los Angeles, Hyde Park Winter Wonderland did exceedingly well, we can continue to kinda go over. All those looked very, very good for us. Going into the beginning of the year, our events, there was no indication that there was any slowdown in the consumer demand for experiences and to be out there. We feel, you know, on the representation side, we've booked over 40,000 music engagements.
As I said in my remarks, there's 29 sellouts from the UFC in a row, and some of the high-end experiences with On Location were $50,000. Right now, and you know, we're cautiously optimistic on the consumer side, it's still very positive.
Stephen Laszczyk (VP)
Great. Thanks for that, Ari. Then maybe just one on regional sports and sports media rights more broadly. I was curious to hear your latest thoughts on some of the RSNs and the extent to which some of the pressures that have been highlighted over the last year have changed your view, if at all, on the value of sports media rights, you know, largely in or the way you approach media rights, sports media rights deals in your business. Thank you.
Ari Emanuel (CEO)
Here's what I would say to you is that I'm not commenting on the regional aspect of it. There was multiple bidders on Big Ten, Big 12. There was multiple bidders on Wimbledon and a lot of our UFC rights internationally. You now have a bunch of the SVOD players getting into that space, people doing shoulder programming like Netflix. That's just on the domestic side. Internationally, one of our last deals we did for the UFC in the U.K., there were 6 bidders for our rights. When we're up over 100% and our IMG Media business is doing very, very well. The demand for live sports and those rights broadcasts is in high demand.
James Marsh (Head of Investor Relations)
Great. Thank you.
Operator (participant)
Thank you, Mr. Laszczyk. The next question comes from the line of David Karnovsky with JPMorgan. You may now proceed.
David Karnovsky (Executive Director)
Hi. Thanks. Just 2 on UFC. Wanted to see if you could update on Fight Pass in Brazil and the reception to the launch there around UFC 283 in Rio. You noted staging more events internationally, but I think with a negative impact to margin. I don't know, wondering if you see a path to potentially getting paid by local promoters or governments in some of these regions, kind of similar to like, a F1 model. Thank you.
Ari Emanuel (CEO)
Well, whether it be Singapore, Perth, Abu Dhabi, Utah, New Jersey, we're seeing... You know, on our Miss Universe side, we got a lot of site fees also. We've sold that business. People are realizing the economic impact for their cities, for their, for their countries, and we're seeing an increased volume in that and in states. We feel very good about that. Brazil, we're 60 days in. Technology's working, starting to do well. We'll give you an update later in the year.
Jason Lublin (CFO)
I would just add that, you know, as Ari said, we expect probably 3 to 5, you know, events this year to have site fees, as you mentioned. You know, we always anticipated taking these events back on the road. They were in APEX during COVID and a little bit post-COVID, as we transitioned. That is the traditional UFC model to take these events on the road both domestically, internationally. We certainly believe that over time, that'll pay off in other ways through increased consumer products, licensing, media rights values and sponsorship.
Operator (participant)
Thank you, Mr. Karnovsky. The next question comes from the line of Jason Bazinet with Citi. You may now proceed.
Jason Bazinet (Managing Director and Senior Equity Analyst)
I just, you guys have done so well with acquisitions over the years. I just have a very simple question. Have you guys ever done a transaction where it didn't work? For the transactions that you did and they did work, how would you just roughly allocate the success between you bought an asset with good secular growth versus synergies across all your divisions versus just managerial acumen, just running the business better than the previous owner? Thanks.
Ari Emanuel (CEO)
I didn't really understand the second part of the question, listen, we're working through kind of the Newline M&A transaction we did. It wasn't perfect. Endeavor Streaming is doing a lot better now. We've built the team back up, Endeavor Streaming is doing well right now. That wasn't perfect, we've done well in M&A. Most of it, as I've said to you, is people we've been in business through the representation side or have a look-see. We have a pretty good insight into where and how we think we can increase the business, save costs, and grow the revenue model. From that end, we stay to our knitting there, I think when we do that, we are very successful in that synopsis.
Jason Lublin (CFO)
The only thing I would add is I think, you know, we do are able to get revenue and cost synergies, which, you know, not everyone can on both sides. It's really helped us execute and be successful on our M&A strategy, both on being able to get revenue synergies as well as cost synergies.
Ari Emanuel (CEO)
Right. Thanks, Jason.
Jason Bazinet (Managing Director and Senior Equity Analyst)
Okay. Thank you.
Ari Emanuel (CEO)
Next question, operator.
Operator (participant)
Thank you, Mr. Bazinet. There are no further questions registered. I will pass the conference back to management team.
Ari Emanuel (CEO)
Great. I wanna thank everyone for joining us tonight. If you have any follow-up questions, feel free to reach out. Thank you very much.
Operator (participant)
That concludes today's conference call. Thank you for your participation. You may now disconnect your line.