Endeavor, tousled by larger economic headwinds and the sale of its lucrative content producing business this year, reported losses for its third fiscal quarter.
The talent representation, live events and sports conglomerate narrowly missed projections, taking a $12.5 million loss. Endeavor has slightly shifted its full-year forecast for adjusted earnings before interest taxes, depreciation and amortization to a range of $1.145 billion to $1.175 billion, which is up from the estimate of $1.13 billion to $1.17 billion offered in August with Q2 results. Revenue guidance was adjusted down to between $5.235 billion and $5.325 billion from the prior quarter’s $5.235 billion-$5.475 billion range.
The company remains highly leveraged with $5.4 billion in debt, though the Ari Emanuel-run shop made good on a promise to pay that down $250 million this quarter and will seek to do the same by year’s end.
“Our business performed well in the quarter despite a turbulent macroeconomic environment,” Emanuel told investors. “Given our unique positioning relative to a set of highly resilient secularindustry trends across premium sports and entertainment content and live events, we remain confident in our ability to continue delivering on our long-term growth strategy while also being good stewards of capital.”
The company’s owned sports vertical, whose crown jewel is UFC, saw growth attributed to the seasonally of media rights and licensing fees. In step with its compliance with the Writers Guild of America’s code of conduct, Endeavor sold 80% of its incredibly profitable content producing business to Korea-based CJ ENM in January. Compared to the same quarter last year, the representation vertical is down 42% in revenue (or $276.4 million). The sunsetting of content packaging fees will have the same affect on all agencies, and the silver lining for Endeavor is that core representation revenue is up 17% excluding Endeavor Content.
The second quarter of 2022 was sunnier, with a net income of $42.2 million on revenue of $1.3 billion.
