Endeavor Beats Expectations for First Year as Public Company Despite $468 Million in Losses

Ari Emanuel’s company also reports $16.7 million net loss for last quarter after posting profit the previous quarter

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In its first year as a public company, Ari Emanuel’s Endeavor beat expectations despite $467.5 million in losses due to strong performance in three key segments including sports with Endeavor’s UFC franchises, content production and talent representation, the company reported on Wednesday.

The company ended the final quarter of 2021 with a net loss of $16.7 million on revenue of $1.5 billion. It posted a $467.5 million loss for the year on a revenue of $5.1 billion. However, due to the success in segment performance, the company’s initial 2022 expected revenue saw an increase to between $5.2 billion and $5.45 billion.

“In our first year as a public company, we saw significant performance across our portfolio as the world began to emerge from the pandemic, with increased attendance at live events and continued heightened demand for premium content,” said Emanuel in a statement. “Given the unique position we occupy in the content landscape, we remain confident about our ability to continue leveraging trends, unlocking growth, and delivering long-term value.”

The company said UFC delivered its best financial year in its 28-year history and that representation revenue in 2021 was up double-digits compared to the last non-COVID-19 impacted year (2019), despite the fact that touring events were still operating at reduced levels during 2021.

Also in a statement, Endeavor touted the sale of 80% stake of Endeavor Content’s scripted business in a deal that valued the entire studio at nearly $1 billion on a post-money basis, and cited as a positive that the company announced its intent to acquire sports and betting platform OpenBet, with the deal expected to close in Q3 2022.

In an analysis of its segment operating results, the company said its Owned Sports segment revenue was $277.3 million for Q4, up $8.3 million, or 3%, compared to the prior-year quarter, and was $1.1 billion for the year, up $155.6 million, or 16%, compared to the prior year. Increases were primarily driven by increased media rights fees, new sponsorship deals and event-related revenue, including nine sold-out UFC pay-per-view events with live audiences.

The company’s segment revenue for Events, Experiences and Rights was $516.7 million for the quarter, up $96 million, or 23%, compared to the prior-year quarter, and was $2 billion for the year, up $437.8 million, or 28%, compared to the prior year, driven by an increase in media rights fees, the return of live events, IMG Academy summer camps operating at full capacity, and the acquisition of NCSA.

The representation segment revenue was $717.9 million for the quarter, up $443.2 million, or 161%, compared to the prior-year quarter, and was $2 billion for the year, up $1 billion, or over 100%, compared to the prior year which had been significantly impacted by the pandemic.

“We feel great about our overall performance and our continued ability to execute on our long term strategy and deliver sustained growth, Emanuel said in an earnings call Wednesday in which he was joined by CFO Jason Lublin. “The secular tailwind we laid out a year ago have never been stronger. From premium content and meteorites, sports betting live events and experience the demand continues to grow.”

Added Emanuel, “We believe there is no better company than Endeavor to continue capitalizing on this demand and that our results in 2021 illustrate that beat our targets and raised our guidance in both the second and third quarters of last year.”

During the call, the executives didn’t address the resignation of Elon Musk, CEO of Tesla and SpaceX, from Endeavor’s board of directors, according to the company’s filing to the SEC made public on Wednesday. Musk’s resignation will be effective June 30, and the company led by Emanuel will also shrink its board of directors from eight people to seven, with Musk not being replaced.

Musk had joined the Endeavor board along with the company’s IPO last year.