UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-40373

ENDEAVOR GROUP HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	83-3340169
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

9601 Wilshire Boulevard, 3rd Floor

Beverly Hills, CA 90210

(Address of principal executive offices) (Zip Code)

(310) 285-9000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, par value $0.00001 per share	EDR	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 8, 2022, there were 289,423,865 shares of the registrant’s Class A common stock outstanding, 183,110,405 shares of the registrant’s Class X common stock outstanding and 229,875,648 shares of the registrant’s Class Y common stock outstanding.

TABLE OF CONTENTS

Part I – FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)	3
Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	3
Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021	4
Consolidated Statements of Comprehensive (Loss) Income for the Three and Nine Months Ended September 30, 2022 and 2021	5
Consolidated Statements of Redeemable Interests and Shareholders’/Members' Equity for the Three and Nine Months Ended September 30, 2022 and 2021	8
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	11
Notes to Consolidated Financial Statements	12
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3. Quantitative and Qualitative Disclosures About Market Risk	44
Item 4. Controls and Procedures	45
Part II – OTHER INFORMATION
Item 1. Legal Proceedings	45
Item 1A. Risk Factors	45
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 5. Other Information	45
Item 6. Exhibits	46

FORWARD LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (the "Quarterly Report") contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements other than statements of present and historical facts contained in this Quarterly Report, including without limitation, statements regarding our expectations, beliefs, plans, strategies, objectives, prospects, assumptions, future events or expected performance, are forward-looking statements.

Without limiting the foregoing, you can generally identify forward-looking statements by the use of forward-looking terminology, including the terms "aim," "anticipate," "believe," "could," "mission," "may," "will," "should," "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," "target," "predict," "potential," "contemplate," or, in each case, their negative, or other variations or comparable terminology and expressions. The forward-looking statements in this Quarterly Report are only predictions and are based on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of known and unknown risks, uncertainties and assumptions, including, but not limited to:

•changes in public and consumer tastes and preferences and industry trends;

•impacts from changes in discretionary and corporate spending on entertainment and sports events due to factors beyond our control, such as adverse economic conditions, on our operations;

•the impact of the global pandemic related to COVID-19 and its variants on our business, financial condition, liquidity and results of operations;

•our ability to adapt to or manage new content distribution platforms or changes in consumer behavior resulting from new technologies;

•our reliance on our professional reputation and brand name;

•our dependence on the relationships of our management, agents, and other key personnel with clients across many content categories;

•our ability to identify, recruit, and retain qualified and experienced agents and managers;

•our ability to identify, sign, and retain clients;

•our ability to avoid or manage conflicts of interest arising from our client and business relationships;

•the loss or diminished performance of members of our executive management and other key employees;

•our dependence on key relationships with television and cable networks, satellite providers, digital streaming partners, corporate sponsors, and other distribution partners;

•our ability to effectively manage the integration of and recognize economic benefits from businesses acquired, our operations at our current size, and any future growth;

•the conduct of our operations through joint ventures and other investments with third parties;

•immigration restrictions and related factors;

•failure in technology, including at live events, or security breaches of our information systems;

•the unauthorized disclosure of sensitive or confidential client or customer information;

•our substantial indebtedness;

•our ability to protect our trademarks and other intellectual property rights, including our brand image and reputation, and the possibility that others may allege that we infringe upon their intellectual property rights;

•the risks associated with the legislative, judicial, accounting, regulatory, political and economic risks and conditions specific to both domestic and international markets;

•fluctuations in foreign currency exchange rates;

•litigation and other proceedings to the extent uninsured or underinsured;

•our ability to comply with the U.S. and foreign governmental regulations to which we are subject;

•our compliance with certain franchise and licensing requirements of unions and guilds and dependence on unionized labor;

•risk related to our gaming business and applicable regulatory requirements;

•our control by Messrs. Emanuel and Whitesell, the Executive Holdcos, and the Silver Lake Equityholders;

•risk related to our organization and structure;

1

•risks related to tax matters;

•risks related to our Class A common stock; and

•other important factors that could cause actual results, performance or achievements to differ materially from those described in Part I, Item 1A. "Risk Factors" and Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 ("2021 Annual Report"), as updated by Part II, Item 1A. "Risk Factors" of this Quarterly Report, and Part I, Item 2. "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in this Quarterly Report and in our subsequent filings with the Securities and Exchange Commission.

These risks could cause actual results to differ materially from those implied by forward-looking statements in this Quarterly Report. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. Even if our results of operations, financial condition and liquidity and the development of the industry in which we operate are consistent with the forward-looking statements contained in this Quarterly Report, those results or developments may not be indicative of results or developments in subsequent periods.

You should read this Quarterly Report and the documents that we reference herein completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we have no obligation to update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

DEFINITIONS

As used in this Quarterly Report, unless we state otherwise or the context otherwise requires:

•"we," "us," "our," "Endeavor," the "Company," and similar references refer (a) after giving effect to the reorganization transactions, to Endeavor Group Holdings and its consolidated subsidiaries, and (b) prior to giving effect to the reorganization transactions, to Endeavor Operating Company and its consolidated subsidiaries.

•"Endeavor Full Catch-Up Profits Units" refer to the Endeavor Profits Units that are designated as "catchup" units. Endeavor Full Catch-Up Profits Units have a per unit hurdle price and are entitled to receive a preference on distributions once the hurdle price applicable to such unit has been met. Upon our achievement of a price per share that would have fully satisfied such preference on distributions, the Endeavor Full Catch-Up Profits Units were converted into Endeavor Operating Company Units.

•"Endeavor Group Holdings" refers to Endeavor Group Holdings, Inc. ("EGH").

•"Endeavor Manager" refers to Endeavor Manager, LLC, a Delaware limited liability company and a direct subsidiary of Endeavor Group Holdings following the reorganization transactions.

•"Endeavor Manager Units" refers to the common interest units in Endeavor Manager.

•"Endeavor Operating Company" refers to Endeavor Operating Company, LLC, a Delaware limited liability company and a direct subsidiary of Endeavor Manager’s and indirect subsidiary of ours following the reorganization transactions ("EOC").

•"Endeavor Operating Company Units" refers to all of the existing equity interests in Endeavor Operating Company (other than the Endeavor Profits Units) that were reclassified into Endeavor Operating Company’s non-voting common interest units upon the consummation of the reorganization transactions.

•"Endeavor Profits Units" refers to the profits units of Endeavor Operating Company and that are economically similar to stock options (other than with respect to Endeavor Full Catch-up Profits Units which, upon our achievement of a price per share that would have fully satisfied their preference on distributions, were converted into Endeavor Operating Company Units). Each Endeavor Profits Unit (other than Endeavor Full Catch-Up Profits Units) has a per unit hurdle price, which is economically similar to the exercise price of a stock option.

•"Executive Holdcos" refers to Endeavor Executive Holdco, LLC, Endeavor Executive PIU Holdco, LLC, and Endeavor Executive II Holdco, LLC, each a management holding company, the equity owners of which include current and former senior officers, employees, or other service providers of Endeavor Operating Company, and which are controlled by Messrs. Emanuel and Whitesell.

•"Other UFC Holders" refers to the other persons that held equity interests in UFC Parent prior to the IPO and certain of their affiliates.

•"reorganization transactions" refers to the internal reorganization completed in connection with our May 2021 initial public offering, following which Endeavor Group Holdings manages and operates the business and control the strategic decisions and day-to-day operations of Endeavor Operating Company through Endeavor Manager and includes the operations of Endeavor Operating Company in its consolidated financial statements.

•"Silver Lake Equityholders" refers to certain affiliates of Silver Lake that are our stockholders.

•"UFC LLC Agreement" refers to the limited liability company agreement which governs the management of UFC Parent and the rights of UFC's Parent's equityholders.

•"UFC Parent" refers to Zuffa Parent LLC, which owns and operations the Ultimate Fighting Championship ("UFC"), the professional mixed martial arts ("MMA") organization.

2

Item 1. Financial Statements (Unaudited)

PART I – FINANCIAL INFORMATION

ENDEAVOR GROUP HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

	September 30,			December 31,
	2022			2021
ASSETS
Current Assets:
Cash and cash equivalents	$	970,782		$	1,560,995
Restricted cash		294,203			232,041
Accounts receivable (net of allowance for doubtful accounts of $65,695 and $57,102, respectively)		893,369			615,010
Deferred costs		247,864			255,371
Assets held for sale		27,301			885,633
Other current assets		253,620			204,697
Total current assets		2,687,139			3,753,747
Property and equipment, net		642,891			629,807
Operating lease right-of-use assets		324,340			373,652
Intangible assets, net		2,199,670			1,611,684
Goodwill		5,237,971			4,506,554
Investments		407,435			298,212
Other assets		416,469			260,861
Total assets	$	11,915,915		$	11,434,517
LIABILITIES, REDEEMABLE INTERESTS AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	540,142		$	558,863
Accrued liabilities		580,001			524,061
Current portion of long-term debt		89,039			82,022
Current portion of operating lease liabilities		59,355			59,743
Deferred revenue		609,715			651,760
Deposits received on behalf of clients		279,402			216,632
Liabilities held for sale		4,866			507,303
Other current liabilities		186,289			105,053
Total current liabilities		2,348,809			2,705,437
Long-term debt		5,338,364			5,631,714
Long-term operating lease liabilities		308,828			363,568
Other long-term liabilities		496,378			402,472
Total liabilities		8,492,379			9,103,191
Commitments and contingencies (Note 16)
Redeemable non-controlling interests		254,699			209,863
Shareholders' Equity:
Class A common stock, $0.00001 par value; 5,000,000,000 shares authorized;   289,330,904 and 265,553,327 shares issued and outstanding as of September 30, 2022   and December 31, 2021, respectively		2			2
Class B common stock, $0.00001 par value; 5,000,000,000 shares authorized;   none issued and outstanding as of September 30, 2022 and December 31, 2021		—			—
Class C common stock, $0.00001 par value; 5,000,000,000 shares authorized;   none issued and outstanding as of September 30, 2022 and December 31, 2021		—			—
Class X common stock, $0.00001 par value; 4,987,036,068 and 5,000,000,000 shares authorized;   183,173,428 and 186,222,061 shares issued and outstanding as of September 30, 2022   and December 31, 2021, respectively		1			1
Class Y common stock, $0.00001 par value; 997,261,325 and 1,000,000,000 shares authorized;   229,875,648 and 238,154,296 shares issued and outstanding as of September 30, 2022   and December 31, 2021, respectively		2			2
Additional paid-in capital		2,061,760			1,624,201
Accumulated deficit		(10,039	)		(296,625	)
Accumulated other comprehensive loss		(61,223	)		(80,535	)
Total Endeavor Group Holdings, Inc. shareholders' equity		1,990,503			1,247,046
Nonredeemable non-controlling interests		1,178,334			874,417
Total shareholders' equity		3,168,837			2,121,463
Total liabilities, redeemable interests and shareholders' equity	$	11,915,915		$	11,434,517

See accompanying notes to consolidated financial statements

3

ENDEAVOR GROUP HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Revenue	$	1,221,416		$	1,391,303		$	4,007,694		$	3,572,157
Operating expenses:
Direct operating costs		398,518			673,215			1,601,544			1,790,562
Selling, general and administrative expenses		601,469			520,626			1,729,174			1,686,840
Insurance recoveries		—			(12,233	)		(993	)		(42,100	)
Depreciation and amortization		63,571			71,661			195,177			208,058
Impairment charges		689			754			689			4,524
Total operating expenses		1,064,247			1,254,023			3,525,591			3,647,884
Operating income (loss)		157,169			137,280			482,103			(75,727	)
Other (expense) income:
Interest expense, net		(75,608	)		(55,783	)		(197,385	)		(207,970	)
Loss on extinguishment of debt		—			—			—			(28,628	)
Tax receivable agreements liability adjustment		(10,405	)		—			(61,497	)		—
Other income (expense), net		9,325			(7,719	)		463,133			(3,001	)
Income (loss) before income taxes and equity losses of affiliates		80,481			73,778			686,354			(315,326	)
Provision for (benefit from) income taxes		8,515			(7,718	)		(6,020	)		58,285
Income (loss) before equity losses of affiliates		71,966			81,496			692,374			(373,611	)
Equity losses of affiliates, net of tax		(84,504	)		(17,883	)		(145,026	)		(77,167	)
Net (loss) income		(12,538	)		63,613			547,348			(450,778	)
Less: Net (loss) income attributable to non-controlling interests		(2,499	)		21,128			212,035			(141,980	)
Less: Net loss attributable to Endeavor Operating Company, LLC prior to the reorganization transactions		—			—			—			(31,686	)
Net (loss) income attributable to Endeavor Group Holdings, Inc.	$	(10,039	)	$	42,485		$	335,313		$	(277,112	)
(Loss) earnings per share of Class A common stock(1):
Basic	$	(0.04	)	$	0.16		$	1.22		$	(1.07	)
Diluted	$	(0.04	)	$	0.16		$	1.19		$	(1.07	)
Weighted average number of shares used in computing (loss) earnings per share:
Basic		285,870,317			262,891,070			278,724,574			261,048,116
Diluted		289,806,633			435,922,511			450,758,061			261,048,116

(1) Basic and diluted income (loss) per share of Class A common stock presented for 2021 is applicable only for the period from May 1, 2021 through September 30, 2021, which is the period following the initial public offering ("IPO") and the related Reorganization Transactions (as defined in note 1 to the unaudited consolidated financial statements). See Note 12 for the calculation of the numbers of shares used in computation of net income (loss) per share of Class A common stock and the basis for computation of net income (loss) per share.

See accompanying notes to consolidated financial statements

4

ENDEAVOR GROUP HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(In thousands)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Net (loss) income	$	(12,538	)	$	63,613		$	547,348		$	(450,778	)
Other comprehensive (loss) income, net of tax:
Change in unrealized gains/losses on cash flow hedges:
Unrealized losses on forward foreign exchange contracts		(1,023	)		(628	)		(1,036	)		(416	)
Reclassification of gains to net (loss) income for forward foreign exchange contracts		(38	)		(1,475	)		(824	)		(1,468	)
Unrealized gains (losses) on interest rate swaps		45,083			(41	)		107,308			13,233
Reclassification of losses to net (loss) income for interest rate swaps		5			7,677			14,497			22,613
Foreign currency translation adjustments		(42,890	)		(1,128	)		(82,716	)		(3,508	)
Reclassification of foreign currency translation gains to net income for business divestiture		—			—			(127	)		—
Total comprehensive (loss) income, net of tax		(11,401	)		68,018			584,450			(420,324	)
Less: Comprehensive (loss) income attributable to non-controlling interests		(2,084	)		22,814			226,299			(137,811	)
Less: Net loss attributable to Endeavor Operating Company, LLC prior to the reorganization transactions		—			—			—			(12,021	)
Comprehensive (loss) income attributable to Endeavor Group Holdings, Inc.	$	(9,317	)	$	45,204		$	358,151		$	(270,492	)

See accompanying notes to consolidated financial statements

5

ENDEAVOR GROUP HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF REDEEMABLE INTERESTS AND SHAREHOLDERS’ EQUITY

(In thousands, except share data)

(Unaudited)

	Three Months Ended September 30, 2022
																								Accumulated			Total Shareholders'
	Redeemable																	Additional						Other			Equity Attributable			Nonredeemable			Total
	Non-controlling			Class A Common Stock				Class X Common Stock					Class Y Common Stock					Paid-In			Accumulated			Comprehensive			to Endeavor Group			Non-controlling			Shareholders'
	Interests			Shares		Amount		Shares			Amount		Shares			Amount		Capital			Deficit			Loss			Holdings, Inc.			Interests			Equity
Balance at July 1, 2022	$	48,630			285,731,884	$	2		183,897,784		$	1		235,001,875		$	2	$	1,962,051		$	-		$	(61,265	)	$	1,900,791		$	1,175,928		$	3,076,719
Comprehensive income		(921	)		—		—		—			—		—			—		—			(10,039	)		722			(9,317	)		(1,163	)		(10,480	)
Equity-based compensation		—			—		—		—			—		—			—		43,754			—			—			43,754			1,373			45,127
Issuance of Class A common stock due to exchanges		—			658,573		—		(724,356	)		—		(5,126,227	)		—		—			—			—			—			—			—
Issuance of Class A common stock due to releases of RSUs		—			70,718		—		—			—		—			—		—			—			—			—			—			—
Distributions		—			—		—		—			—		—			—		—			—			—			—			(329	)		(329	)
Accretion of redeemable non- controlling interests		(3,160	)		—		—		—			—		—			—		3,160			—			—			3,160			—			3,160
Issuance of Class A common stock due to an acquisition		—			2,869,729		—		—			—		—			—		59,240			—			—			59,240			—			59,240
Establishment and acquisition of non-controlling interests		210,150			—		—		—			—		—			—		—			—			—			—			—			—
Non-controlling interests for sale of businesses		—			—		—		—			—		—			—		—			—			—			—			(4,644	)		(4,644	)
Equity reallocation between controlling and non-controlling interests		—			—		—		—			—		—			—		(6,489	)		—			(680	)		(7,169	)		7,169			—
Tax receivable agreements in connection with exchanges		—			—		—		—			—		—			—		44			—			—			44			—			44
Balance at September 30, 2022	$	254,699			289,330,904	$	2		183,173,428		$	1		229,875,648		$	2	$	2,061,760		$	(10,039	)	$	(61,223	)	$	1,990,503		$	1,178,334		$	3,168,837

6

	Nine Months Ended September 30, 2022
																								Accumulated			Total Shareholders'
	Redeemable																	Additional						Other			Equity Attributable			Nonredeemable			Total
	Non-controlling			Class A Common Stock				Class X Common Stock					Class Y Common Stock					Paid-In			Accumulated			Comprehensive			to Endeavor Group			Non-controlling			Shareholders'
	Interests			Shares		Amount		Shares			Amount		Shares			Amount		Capital			Deficit			Loss			Holdings, Inc.			Interests			Equity
Balance at January 1, 2022	$	209,863			265,553,327	$	2		186,222,061		$	1		238,154,296		$	2	$	1,624,201		$	(296,625	)	$	(80,535	)	$	1,247,046		$	874,417		$	2,121,463
Comprehensive income		3,796			—		—		—			—		—			—		—			335,313			22,838			358,151			222,503			580,654
Equity-based compensation		(2,276	)		—		—		—			—		—			—		135,552			—			—			135,552			20,490			156,042
Issuance of Class A common stock due to exchanges		—			11,645,986		—		(11,746,012	)		—		(8,278,648	)		—		—			—			—			—			—			—
Issuance of Class A common stock due to releases of RSUs		—			2,678,113		—		—			—		—			—		—			—			—			—			—			—
Distributions		—			—		—		—			—		—			—		—			—			—			—			(26,282	)		(26,282	)
Accretion of redeemable non- controlling interests		83,848			—		—		—			—		—			—		(35,121	)		(48,727	)		—			(83,848	)		—			(83,848	)
Issuance of Class A common stock due to an acquisition		—			3,266,646		—		—			—		—			—		70,254			—			—			70,254			—			70,254
Establishment and acquisition of non-controlling interests		(40,532	)		6,186,832		—		8,697,379			—		—			—		211,405			—			—			211,405			135,090			346,495
Non-controlling interests for sale of businesses		—			—		—		—			—		—			—		—			—			—			—			3,240			3,240
Equity reallocation between controlling and non-controlling interests		—			—		—		—			—		—			—		54,650			—			(3,526	)		51,124			(51,124	)		—
Tax receivable agreements in connection with exchanges		—			—		—		—			—		—			—		819			—			—			819			—			819
Balance at September 30, 2022	$	254,699			289,330,904	$	2		183,173,428		$	1		229,875,648		$	2	$	2,061,760		$	(10,039	)	$	(61,223	)	$	1,990,503		$	1,178,334		$	3,168,837

See accompanying notes to consolidated financial statements

7

ENDEAVOR GROUP HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF REDEEMABLE INTERESTS AND MEMBERS' EQUITY

(In thousands)

(Unaudited)

	Three Months Ended September 30, 2021
																											Accumulated			Total Shareholders'
	Redeemable																				Additional						Other			Equity Attributable			Nonredeemable			Total
	Non-controlling			Redeemable		Members'		Class A Common Stock				Class X Common Stock					Class Y Common Stock				Paid-In			Accumulated			Comprehensive			to Endeavor Group			Non-controlling			Shareholders'/
	Interests			Equity		Capital		Shares		Amount		Shares			Amount		Shares		Amount		Capital			Deficit			Loss			Holdings, Inc.			Interests			Members' Equity
Balance at July 1, 2021	$	179,140		$	—	$	—		261,371,683	$	2		188,080,383		$	1		238,154,296	$	2	$	1,556,791		$	(319,597	)	$	(98,530	)	$	1,138,669		$	811,568		$	1,950,237
Comprehensive (loss) income subsequent to Reorganization and IPO		(4,114	)		—		—		—		—		—			—		—		—		—			42,485			2,719			45,204			26,928			72,132
Equity-based compensation subsequent to Reorganization and IPO		—			—		—		—		—		—			—		—		—		55,174			—			—			55,174			5,048			60,222
Issuance of Class A common stock due to exchanges subsequent to Reorganization and IPO		—			—		—		545,951		—		(565,259	)		—		—		—		—			—			—			—			—			—
Issuance of Class A common stock due to vested RSUs subsequent to Reorganization and IPO		—			—		—		53,040		—		—			—		—		—		—			—			—			—			—			—
Distributions subsequent to Reorganization and IPO		—			—		—		—		—		—			—		—		—		95			—			—			95			(162	)		(67	)
Accretion of redeemable non-controlling interests subsequent to Reorganization and IPO		33,821			—		—		—		—		—			—		—		—		(33,821	)		—			—			(33,821	)		—			(33,821	)
Establishment of non-controlling interests subsequent to Reorganization and IPO		43			—		—		—		—		—			—		—		—		—			—			—			—			(43	)		(43	)
Non-controlling interests for sale of businesses		—			—		—		—		—		—			—		—		—		—			—			—			—			(2,868	)		(2,868	)
Equity reallocation between controlling  and non-controlling interests		—			—		—		—		—		—			—		—		—		2,399			—			—			2,399			(2,399	)		—
Balance at September 30, 2021	$	208,890		$	—	$	—		261,970,674	$	2		187,515,124		$	1		238,154,296	$	2	$	1,580,638		$	(277,112	)	$	(95,811	)	$	1,207,720		$	838,072		$	2,045,792

See accompanying notes to consolidated financial statements

8

	Nine Months Ended September 30, 2021
																													Accumulated			Total Shareholders'
	Redeemable																						Additional						Other			Equity Attributable			Nonredeemable			Total
	Non-controlling			Redeemable			Members'			Class A Common Stock				Class X Common Stock					Class Y Common Stock				Paid-In			Accumulated			Comprehensive			to Endeavor Group			Non-controlling			Shareholders'/
	Interests			Equity			Capital			Shares		Amount		Shares			Amount		Shares		Amount		Capital			Deficit			Loss			Holdings, Inc.			Interests			Members' Equity
Balance at January 1, 2021	$	168,254		$	22,519		$	468,633			—	$	—		—		$	—		—	$	—	$	—		$	—		$	(190,786	)	$	277,847		$	686,129		$	963,976
Comprehensive (loss) income prior to reorganization and IPO		(4,111	)		—			(31,686	)		—		—		—			—		—		—		—			—			19,665			(12,021	)		42,859			30,838
Equity-based compensation expense prior to Reorganization and IPO		—			—			3,444			—		—		—			—		—		—		—			—			—			3,444			7,636			11,080
Distributions prior to Reorganization and IPO		—			—			(245	)		—		—		—			—		—		—		—			—			—			(245	)		(8,403	)		(8,648	)
Accretion of redeemable non-controlling interests prior to Reorganization and IPO		(271	)		—			271			—		—		—			—		—		—		—			—			—			271			—			271
Establishment of non-controlling interests prior to Reorganization and IPO		2,888			—			560			—		—		—			—		—		—		—			—			—			560			(3,448	)		(2,888	)
Effects of Reorganization		5,729			(22,519	)		(440,977	)		133,712,566		1		122,021,609			1		167,208,026		2		242,017			—			80,645			(118,311	)		135,101			16,790
Issuance of Class A common stock sold in IPO, including underwriters' option, and Private Placement, net of underwriting discounts		—			—			—			81,873,497		1		—			—		—		—		1,886,642			—			—			1,886,643			—			1,886,643
Use of proceeds, including the UFC buyout		—			—			—			42,400,877		—		67,910,105			—		70,946,270		—		(702,698	)		—			(11,955	)		(714,653	)		(120,386	)		(835,039	)
Comprehensive (loss) income subsequent to reorganization and IPO		(5,808	)		—			—			—		—		—			—		—		—		—			(277,112	)		6,620			(270,492	)		(170,751	)		(441,243	)
Equity-based compensation expense subsequent to Reorganization and IPO		—			—			—			—		—		—			—		—		—		214,020			—			—			214,020			281,912			495,932
Issuance of Class A common stock due to exchanges subsequent to Reorganization and IPO		—			—			—			2,426,147		—		(2,416,590	)		—		—		—		—			—			—			—			—			—

9

Issuance of Class A common stock for vested RSUs subsequent to reorganization and IPO		—		—		—	1,557,587		—	—		—	—		—		—			—			—			—			—			—
Contributed capital subsequent to Reorganization and IPO		5,400		—		—	—		—	—		—	—		—		—			—			—			—			—			—
Distributions subsequent to Reorganization and IPO		—		—		—	—		—	—		—	—		—		—			—			—			—			(162	)		(162	)
Accretion of redeemable non-controlling interests subsequent to Reorganization and IPO		34,688		—		—	—		—	—		—	—		—		(34,688	)		—			—			(34,688	)		—			(34,688	)
Establishment of non-controlling interests subsequent to Reorganization and IPO		2,121		—		—	—		—	—		—	—		—		—			—			—			—			(2,121	)		(2,121	)
Non-controlling interests for sale of businesses		—		—		—	—		—	—		—	—		—		—			—			—			—			(2,868	)		(2,868	)
Equity reallocation between controlling  and non-controlling interests		—		—		—	—		—	—		—	—		—		7,426			—			—			7,426			(7,426	)		—
Establishment of tax receivable  agreements liability		—		—		—	—		—	—		—	—		—		(32,081	)		—			—			(32,081	)		—			(32,081	)
Balance at September 30, 2021	$	208,890	$	—	$	—	261,970,674	$	2	187,515,124	$	1	238,154,296	$	2	$	1,580,638		$	(277,112	)	$	(95,811	)	$	1,207,720		$	838,072		$	2,045,792

See accompanying notes to consolidated financial statements

10

ENDEAVOR GROUP HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine Months Ended September 30,
	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	547,348		$	(450,778	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		195,177			208,058
Amortization and write-off of original issue discount and deferred financing cost		16,986			33,887
Loss on extinguishment of debt		—			28,628
Amortization of content costs		18,535			319,844
Impairment charges		689			4,524
Gain on business divestitures and sale/disposal/impairment of assets		(507,560	)		(2,408	)
Equity-based compensation expense		159,851			464,393
Change in fair value of contingent liabilities		2,243			14,414
Change in fair value of equity investments with and without readily determinable fair value		(13,833	)		(12,134	)
Change in fair value of financial instruments		20,793			26,812
Equity losses of affiliates		145,026			77,167
Net provision for (benefit from) allowance for doubtful accounts		12,173			(5,837	)
Net loss on foreign currency transactions		28,353			6,156
Distributions from affiliates		5,205			3,881
Tax receivable agreements liability adjustment		61,497			—
Income taxes		(29,024	)		26,048
Other, net		(869	)		(1,431	)
Changes in operating assets and liabilities - net of acquisitions and divestitures:
Increase in receivables		(299,431	)		(298,304	)
Increase in other current assets		(51,176	)		(48,510	)
Increase in other assets		(39,479	)		(699,667	)
Decrease in deferred costs		2,964			6,883
(Decrease)/increase in deferred revenue		(43,626	)		228,995
Increase in accounts payable and accrued liabilities		92,752			169,914
Increase in other liabilities		80,575			87,534
Net cash provided by operating activities		405,169			188,069
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions, net of cash acquired		(1,434,518	)		(258,493	)
Purchases of property and equipment		(94,757	)		(40,974	)
Proceeds from business divestitures, net of cash sold		910,845			—
Proceeds from sale of assets		3,448			19,337
Investments in affiliates		(46,730	)		(139,733	)
Other, net		663			11,233
Net cash used in investing activities		(661,049	)		(408,630	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings		10,033			319,948
Payments on borrowings		(324,017	)		(974,806	)
Contributions		—			5,400
Distributions		(26,283	)		(8,836	)
Redemption payments related to pre-IPO units		(7,765	)		(16,147	)
Proceeds from equity offering, net of underwriting discounts and offering expenses		—			1,886,643
Acquisition of non-controlling interests		92,487			(835,039	)
Payments of contingent consideration related to acquisitions		(11,644	)		(2,136	)
Other, net		(982	)		(3,972	)
Net cash (used in) provided by financing activities		(268,171	)		371,055
Change in cash, cash equivalents and restricted cash balances held for sale		25,952			(59,504	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(29,952	)		(2,593	)
(Decrease) increase in cash, cash equivalents and restricted cash		(528,051	)		88,397
Cash, cash equivalents and restricted cash at beginning of year		1,793,036			1,190,333
Cash, cash equivalents and restricted cash at end of period	$	1,264,985		$	1,278,730

See accompanying notes to consolidated financial statements

11

ENDEAVOR GROUP HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1.DESCRIPTION OF BUSINESS AND ORGANIZATION

Endeavor Group Holdings, Inc. (the "Company" or "EGH") was incorporated as a Delaware corporation in January 2019. The Company was formed as a holding company for the purpose of completing an initial public offering ("IPO") and other related transactions in order to carry on the business of Endeavor Operating Company, LLC (d.b.a. Endeavor) and its subsidiaries (collectively, "Endeavor" or "EOC"). As the sole managing member of Endeavor Manager, LLC ("Endeavor Manager"), which in turn is the sole managing member of EOC, the Company operates and controls all the business and affairs of Endeavor, and through Endeavor and its subsidiaries, conducts the Company’s business. The Company is a global sports and entertainment company.

Prior to the IPO, Endeavor was owned by WME Holdco, LLC (which is referred to as "Holdco" herein and was principally owned by executive employees of the Company), affiliates of Silver Lake (which are collectively referred to as "Silver Lake" herein), and other investors and executive employees of the Company.

Initial Public Offering

On May 3, 2021, the Company closed an IPO of 24,495,000 shares of Class A common stock at a public offering price of $24.00 per share, which included 3,195,000 shares of Class A common stock issued pursuant to the underwriters’ option to purchase additional shares of Class A common stock. This option to purchase additional shares of Class A common stock closed on May 12, 2021.

Reorganization Transactions

Prior to the closing of the IPO, a series of reorganization transactions was completed. Subsequent to the closing of the IPO, several new and current investors purchased in the aggregate 75,584,747 shares of Class A common stock at a price per share of $24.00. Then, through a series of transactions, EOC acquired the equity interests of the minority unitholders of Zuffa, which owns and operates the Ultimate Fighting Championship. This resulted in EOC directly or indirectly owning 100% of the equity interests of Zuffa.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for reporting interim financial information and should be read in conjunction with the Company’s consolidated financial statements and accompanying footnotes in our Annual Report on Form 10-K for the year ended December 31, 2021. Certain information and note disclosures normally included in the annual financial statements have been condensed or omitted from these interim financial statements. The interim consolidated financial statements as of September 30, 2022 and for the three and nine months ended September 30, 2022 and 2021 are unaudited; however, in the opinion of management, such interim consolidated financial statements reflect all adjustments, consisting solely of normal and recurring adjustments, necessary for a fair statement of its financial position, results of operations and cash flows for the interim periods presented.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and the accompanying disclosures.

Significant accounting policies that contain subjective management estimates and assumptions include those related to revenue recognition, allowance for doubtful accounts, the fair value of acquired assets and liabilities associated with acquisitions, the fair value of the Company’s reporting units and the assessment of goodwill, other intangible assets and long-lived assets for impairment, consolidation, investments, redeemable non-controlling interests, the fair value of equity-based compensation, tax receivable agreements liability, income taxes and contingencies.

Management evaluates these estimates using historical experience and other factors, including the general economic environment and actions it may take in the future. The Company adjusts such estimates when facts and circumstances dictate. However, these estimates may involve significant uncertainties and judgments and cannot be determined with precision. In addition, these estimates are based on management’s best judgment at a point in time and as such, these estimates may ultimately differ from actual results. Changes in estimates resulting from weakness in the economic environment or other factors beyond the Company’s control could be material and would be reflected in the Company’s consolidated financial statements in future periods.

12

3.RECENT ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements

In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU addresses issues identified as a result of the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity. The amendments in this update were effective for public entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The adoption did not have a material effect on the Company’s financial position or results of operations.

Recently Issued Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. Adoption of the expedients and exceptions is permitted upon issuance of this update through December 31, 2022. The Company is in the process of assessing the impact of this ASU on its consolidated financial statements.

In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging—Portfolio Layer Method. This ASU clarifies the guidance in ASC 815 on fair value hedge accounting of interest rate risk for portfolios of financial assets, expanding the scope of this guidance to allow entities to apply the portfolio layer method to portfolios of all financial assets, including both prepayable and nonprepayable financial assets. The amendments in this update are effective for public entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The adoption will not have a material effect on the Company’s financial position or results of operations.

In March 2022, the FASB issued ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. This ASU eliminates the accounting guidance on troubled debt restructurings (TDRs) for creditors in ASC 310-40 and amends the guidance on "vintage disclosures" to require disclosure of current-period gross write-offs by year of origination. The ASU also updates the requirements related to accounting for credit losses under ASC 326 and adds enhanced disclosures for creditors with respect to loan refinancings and restructurings for borrowers experiencing financial difficulty. For entities that have already adopted ASU 2016-13, the amendments in this update are effective for public entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The adoption will not have a material effect on the Company’s financial position or results of operations.

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurements (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. This ASU clarifies the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security. The amendments in this update are effective for public entities for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The adoption will not have a material effect on the Company’s financial position or results of operations.

In September 2022, the FASB issued ASU 2022-04, Liabilities–Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. This ASU enhances the transparency of supplier finance programs. The amendments in this update are effective for public entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The adoption will not have a material effect on the Company’s financial position or results of operations.

4.ACQUISITIONS AND DIVESTITURES

2022 ACQUISITIONS

Diamond Baseball Holdings, Madrid Open, Barrett-Jackson, and OpenBet

In January 2022, the Company acquired four additional Professional Development League clubs (the "PDL Clubs"), which were being operated under the Diamond Baseball Holdings ("DBH") umbrella. DBH supported the PDL Clubs' commercial activities, content strategy and media rights. For these four additional PDL Clubs, the Company paid $64.2 million in cash.

In April 2022, the Company acquired the Mutua Madrid Open tennis tournament and additional assets ("Madrid Open"), including the Acciona Open de España golf tournament, from Super Slam Ltd and its affiliates. The Company paid $386.1 million for consideration and transfer fees at closing, an additional $31.8 million of consideration is payable within two years of closing, and $0.6 million of contingent consideration payable within three years of closing.

In August 2022, the Company acquired 55% of Barrett-Jackson Holdings, LLC ("Barrett-Jackson"), which is engaged in the business of collector car auctions and sales as well as other collector car related events and experiences, in exchange for consideration having an aggregate value of $256.9 million. The aggregate consideration consisted of $244.4 million of cash and 563,935 newly-issued shares of the Company's Class A common stock valued at $12.5 million.

In September 2022, the Company acquired the OpenBet business ("OpenBet") of Light & Wonder, Inc. (formerly known as Scientific Games Corporation) ("Light & Wonder"). OpenBet consists of companies that provide products and services to sports betting operators for the purposes of sports wagering. The Company paid consideration to Light & Wonder of $847.1 million, consisting of $800.4 million of cash and 2,305,794 newly-issued shares of the Company's Class A common stock valued at $46.7 million.

13

The Company incurred $31.6 million in transaction related costs in connection with these acquisitions. The costs were expensed as incurred and included in selling, general and administrative expenses in the consolidated statement of operations.

The goodwill for the PDL Clubs was assigned to the Owned Sports Properties segment and the goodwill for the Madrid Open, Barrett-Jackson, and OpenBet acquisitions was assigned to the Events, Experiences & Rights segment. The goodwill is partially deductible for tax purposes. The weighted average life of finite-lived intangible assets acquired for these four PDL Clubs is 18.7 years and the intangibles acquired for Madrid Open are indefinite-lived. The intangibles acquired for Barrett-Jackson and OpenBet include both indefinite-lived intangibles and finite-lived intangibles with a weighted average life of 6.2 and 11.1 years, respectively.

The results of these four PDL Clubs, Madrid Open, Barrett-Jackson, and OpenBet have been included in the consolidated financial statements since the dates of acquisition. For the nine months ended September 30, 2022, these four PDL Clubs, Madrid Open, Barrett-Jackson, and OpenBet's consolidated revenue and net income included in the consolidated statement of operations from the acquisition dates were $82.4 million and $32.2 million, respectively.

Preliminary Allocation of Purchase Price

The acquisitions were accounted for as business combinations and the preliminary fair values of the assets acquired and liabilities assumed in the business combinations are as follows (in thousands):

	DBH			Madrid Open			Barrett-Jackson			OpenBet
Cash and cash equivalents	$	—		$	18,659		$	10,783		$	49,795
Accounts receivable		89			2,123			1,706			34,062
Deferred costs		—			1,124			—			12,276
Other current assets		491			470			1,386			12,653
Property and equipment		4,403			162			4,290			6,889
Right of use assets		7,270			—			9,054			8,401
Investments		—			—			—			1,100
Other assets		103			381			—			6,033
Intangible assets:
Trade names		—			—			120,900			70,000
Customer relationships		1,960			—			12,300			135,000
Internally developed software		—			—			1,300			155,000
Owned events		—			407,070			—			—
Other		35,410			—			—			14,500
Goodwill		25,585			15,385			328,854			468,192
Accounts payable and accrued expenses		(93	)		(1,609	)		(7,009	)		(13,784	)
Other current liabilities		(56	)		—			—			(14,517	)
Operating lease liability		(9,470	)		—			(4,458	)		(8,401	)
Deferred revenue		(1,455	)		(20,780	)		(667	)		(5,983	)
Debt		—			—			(11,439	)		—
Other liabilities		—			(4,474	)		—			(84,130	)
Redeemable non-controlling interests		—			—			(210,150	)		—
Net assets acquired	$	64,237		$	418,511		$	256,850		$	847,086

Except for DBH, the estimated fair values of assets acquired and liabilities assumed are preliminary and subject to change as we finalize purchase price allocations, which is expected within one year of the respective acquisitions.

Other 2022 Acquisitions

In May 2022, the Company completed an acquisition for a total purchase price of $15.6 million in return for a 73.5% controlling interest. The Company paid $4.6 million in cash and issued 396,917 shares of EGH Class A common stock valued at $11.0 million. In September 2022, the Company completed another acquisition for a total purchase price of $3.9 million including contingent consideration with a fair value of $0.9 million. The Company recorded $13.8 million of goodwill and $4.2 million of intangible assets, of which the weighted average useful life ranges from 5 to 10 years. The goodwill for both acquisitions was assigned to the Events, Experiences & Rights segment and is partially deductible for tax purposes.

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2022 DIVESTITURES

Endeavor Content

In February 2021, the Company signed a new franchise agreement and side letter (the "Franchise Agreements") directly with the Writer’s Guild of America East and the Writer’s Guild of America West (collectively, the "WGA"). These Franchise Agreements included terms that, among other things, prohibited the Company from (a) negotiating packaging deals after June 30, 2022 and (b) having more than a 20% non-controlling ownership or other financial interest in, or being owned or affiliated with any individual or entity that has more than a 20% non-controlling ownership or other financial interest in, any entity or individual engaged in the production or distribution of works written by WGA members under a WGA collective bargaining agreement. As a result, in the third quarter of 2021, the Company began marketing the restricted Endeavor Content business for sale and such assets and liabilities were reflected as held for sale in the consolidated balance sheet as of December 31, 2021. The sale of 80% of the restricted Endeavor Content business closed in January 2022. The Company received cash proceeds of $666.3 million and divested $16.6 million of cash and restricted cash on the date of sale. The retained 20% interest of the restricted Endeavor Content business is reflected as an equity method investment as of September 30, 2022 and was valued at $196.3 million at the date of sale. The fair value of the retained 20% interest of the restricted Endeavor Content business was determined using the market approach. The key input assumption was the transaction price paid for the Company's 80% interest in the restricted Endeavor Content business. The Company recorded a net gain of $463.6 million, inclusive of a $121.1 million gain related to the remeasurement of the retained interest in the restricted Endeavor Content business to fair value and $15.0 million of transaction costs, in other income (expense), net during the nine months ended September 30, 2022. The restricted Endeavor Content business was included in the Company’s Representation segment prior to the sale.

Diamond Baseball Holdings

In September 2022, the Company closed the sale of the ten PDL Clubs that operated under the DBH umbrella to Silver Lake, stockholders of the Company, for an aggregate purchase price of $280.1 million in cash. The Company recorded a net gain of $23.3 million in other income (expense), net during the nine months ended September 30, 2022. The business was included in the Company's Owned Sports Properties segment.

2022 HELD FOR SALE

In the second and third quarters of 2022, the Company began marketing two businesses for sale and due to the progression of the sale processes, determined that each met all of the criteria to be classified as held for sale as of September 30, 2022. The businesses are included in the Company's Events, Experiences & Rights reporting segment. The aggregate assets and liabilities of these businesses held for sale are $27.3 million and $4.9 million, respectively, which are not material to the Company’s overall financial position. Subsequent to September 30, 2022, the Company sold one of the held for sale businesses.

2021 ACQUISITIONS

FlightScope, Next College Student Athlete, and Mailman

In April 2021, the Company acquired the issued and outstanding equity interests of EDH Tennis Limited, the holding company of FlightScope Services Sp. z o.o., comprising the services business of FlightScope (collectively, “FlightScope”). FlightScope is a data collection, audio-visual production and tracking technology specialist for golf and tennis events. In June 2021, the Company acquired the Path-to-College business of Reigning Champs, LLC, whose primary business is Next College Student Athlete (collectively, with the other acquired Path-to-College businesses, “NCSA”). NCSA consists of companies that offer recruiting and admissions services and related software products to high school student athletes, as well as college athletic departments and admissions officers. In July 2021, the Company acquired 100% of the equity interests of Wishstar Enterprises Limited, the holding company of multiple entities (collectively, "Mailman"). Mailman is a digital sports agency and consultancy serving global sports properties. The combined aggregate purchase price for these three acquisitions was $290.8 million.

The Company incurred $4.6 million in transaction related costs in connection with these acquisitions. The costs were expensed as incurred and included in selling, general and administrative expenses in the consolidated statement of operations.

The goodwill for FlightScope and NCSA was assigned to the Events, Experiences & Rights segment and the goodwill for Mailman was assigned to the Representation and Events, Experiences & Rights segments. The goodwill is partially deductible for tax purposes. The weighted average life of finite-lived intangible assets acquired for FlightScope, NCSA, and Mailman is 4.4, 5.2, and 7.6 years, respectively.

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Allocation of Purchase Price

The acquisitions were accounted for as business combinations and the fair values of the assets acquired and liabilities assumed in the business combinations are as follows (in thousands):

	FlightScope			NCSA			Mailman
Cash and cash equivalents	$	1,042		$	3,655		$	16,598
Accounts receivable		475			5,619			11,292
Deferred costs		94			1,096			476
Other current assets		1,640			10,238			1,713
Property and equipment		1,089			2,804			585
Right of use assets		1,272			4,951			359
Investments		—			—			1,239
Other assets		1,056			5,472			2,085
Intangible assets:
Trade names		—			21,100			800
Customer relationships		2,700			10,000			12,400
Internally developed software		15,400			37,100			—
Goodwill		33,550			214,106			22,342
Accounts payable and accrued expenses		(806	)		(20,855	)		(16,255	)
Other current liabilities		(187	)		(10,318	)		(1,606	)
Debt		—			—			(4,338	)
Operating lease liability		(1,272	)		(4,951	)		(359	)
Deferred revenue		(631	)		(51,617	)		(972	)
Other liabilities		(4,334	)		(31,603	)		(3,485	)
Net assets acquired	$	51,088		$	196,797		$	42,874

5. SUPPLEMENTARY DATA

Accrued Liabilities

The following is a summary of accrued liabilities (in thousands):

	September 30,		December 31,
	2022		2021
Accrued operating expenses	$	244,453	$	302,024
Payroll, bonuses and benefits		247,102		162,688
Other		88,446		59,349
Total accrued liabilities	$	580,001	$	524,061

Allowance for Doubtful Accounts

The changes in the allowance for doubtful accounts are as follows (in thousands):

	Balance at		Additions/Charged											Balance at
	Beginning		to Costs and					Foreign			Assets Held			End of
	of Year		Expenses, Net		Deductions			Exchange			for Sale			Period
Nine Months Ended September 30, 2022	$	57,102	$	12,577	$	(203	)	$	(3,581	)	$	(200	)	$	65,695

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Supplemental Cash Flow

The Company’s supplemental cash flow information is as follows (in thousands):

	Nine Months Ended September 30,
	2022		2021
Supplemental information:
Cash paid for interest	$	160,217	$	145,966
Cash payments for income taxes		33,309		27,185
Non-cash investing and financing activities:
Capital expenditures included in accounts payable and accrued liabilities	$	8,037	$	15,931
Contingent consideration provided in connection with acquisitions		1,500		4,472
Establishment and acquisition of non-controlling interests		414,985		3,087,301
Tax receivable agreements liability adjustments		819		32,081
Accretion of redeemable non-controlling interests		83,849		34,417
Investment in affiliates retained from a business divestiture		202,220		—
Deferred consideration in connection with acquisitions		31,770		—
Issuance of Class A common stock in connection with acquisitions		70,254		—

6. GOODWILL AND INTANGIBLE ASSETS

Goodwill

The changes in the carrying value of goodwill are as follows (in thousands):

	Owned Sports Properties			Events, Experiences & Rights			Representation			Total
Balance — December 31, 2021	$	2,741,048		$	1,266,144		$	499,362		$	4,506,554
Acquisitions		25,585			826,221			—			851,806
Divestiture		(91,960	)		—			—			(91,960	)
Impairment		—			(689	)		—			(689	)
Foreign currency translation and other		(635	)		(13,830	)		(1,278	)		(15,743	)
Assets held for sale		—			(11,997	)		—			(11,997	)
Balance — September 30, 2022	$	2,674,038		$	2,065,849		$	498,084		$	5,237,971

Intangible Assets

The following table summarizes information relating to the Company’s identifiable intangible assets as of September 30, 2022 (in thousands):

	Weighted Average Estimated Useful Life (in years)		Gross Amount		Accumulated Amortization			Carrying Value
Amortized:
Trade names		17.1	$	1,045,525	$	(329,005	)	$	716,520
Customer and client relationships		6.9		1,448,375		(1,045,532	)		402,843
Internally developed technology		6.0		279,176		(83,400	)		195,776
Other		4.3		45,188		(44,180	)		1,008
			$	2,818,264	$	(1,502,117	)	$	1,316,147
Indefinite-lived:
Trade names			$	438,369	$	—		$	438,369
Owned events				431,154		—			431,154
Other				14,000		—			14,000
Total intangible assets			$	3,701,787	$	(1,502,117	)	$	2,199,670

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The following table summarizes information relating to the Company’s identifiable intangible assets as of December 31, 2021 (in thousands):

	Weighted Average Estimated Useful Life (in years)		Gross Amount		Accumulated Amortization			Carrying Value
Amortized:
Trade names		17.3	$	991,021	$	(291,326	)	$	699,695
Customer and client relationships		6.7		1,344,783		(1,012,509	)		332,274
Internally developed technology		3.9		120,175		(66,939	)		53,236
Other		14.3		142,657		(44,608	)		98,049
			$	2,598,636	$	(1,415,382	)	$	1,183,254
Indefinite-lived:
Trade names			$	340,029	$	—		$	340,029
Owned events				88,401		—			88,401
Total intangible assets			$	3,027,066	$	(1,415,382	)	$	1,611,684

Intangible asset amortization expense was $39.1 million and $48.6 million for the three months ended September 30, 2022 and 2021, respectively, and $123.4 million and $141.0 million for the nine months ended September 30, 2022 and 2021, respectively.

7. INVESTMENTS

The following is a summary of the Company’s investments (in thousands):

	September 30,		December 31,
	2022		2021
Equity method investments	$	281,385	$	196,423
Equity investments without readily determinable fair values		125,744		101,124
Equity investments with readily determinable fair values		306		665
Total investments	$	407,435	$	298,212

Equity Method Investments

As of September 30, 2022 and December 31, 2021, the Company held various investments in non-marketable equity instruments of private companies. As of September 30, 2022, the Company’s equity method investments are primarily comprised of the restricted Endeavor Content business (now called Fifth Season) and Sports News Television Limited. The Company’s ownership of its equity method investments ranged from 6% to 50% as of September 30, 2022.

In January 2022, in connection with the Company's sale of 80% of the restricted Endeavor Content business, the Company retained 20% ownership in the restricted Endeavor Content business. The investment is accounted for as an equity method investment. The Company’s share of the net loss of Fifth Season for the three and nine months ended September 30, 2022 was $4.4 million and $9.5 million, respectively, and is recognized within equity losses of affiliates in the consolidated statements of operations.

As of September 30, 2022, the Company’s ownership in Learfield IMG College was approximately 42%. The Company’s share of the net loss of Learfield IMG College for the three and nine months ended September 30, 2022 and 2021 was $78.7 million, $137.5 million, $14.8 million and $76.3 million, respectively, and is recognized within equity losses of affiliates in the consolidated statements of operations. The Company's share of the results of Learfield IMG College for the three and nine months ended September 30, 2022 included a $56.1 million charge as a result of its annual goodwill and indefinite lived intangibles asset impairment test, primarily due to continued losses.

Equity Investments without Readily Determinable Fair Values

As of September 30, 2022 and December 31, 2021, the Company held various investments in non-marketable equity instruments of private companies.

The Company performed its assessment on its investments without readily determinable fair values and recorded an increase in fair value of $0.5 million and $0.9 million for the three months ended September 30, 2022 and 2021, respectively, and $14.5 million and $0.9 million for the nine months ended September 30, 2022 and 2021, respectively, in other income (expense), net in the consolidated statements of operations. The net increases were due to observable price changes partially offset by impairments. For the three and nine months ended September 30, 2022 and the nine months ended September 30, 2021, the Company sold investments for net proceeds of $3.0 million, $3.3 million and $4.8 million, respectively, and a related gain of $3.0 million, $3.3 million and $2.6 million, respectively. For the three months ended September 30, 2021, the Company sold no investments.

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Equity Investments with Readily Determinable Fair Values

As of September 30, 2022, the Company had three investments in publicly traded companies. During the three and nine months ended September 30, 2022, the Company did not sell any investments in publicly traded companies. As of September 30, 2022 and December 31, 2021, the Company’s equity investments with readily determinable fair values were valued at $0.3 million and $0.7 million, respectively. For the three and nine months ended September 30, 2022, the Company recorded $(0.3) million and $(0.9) million, respectively, due to the change in fair value in other income (expense), net in the consolidated statements of operations. For the three and nine months ended September 30, 2021, the company recorded $(0.1) million and $5.1 million, respectively, due to the change in fair value in other income (expense), net in the consolidated statements of operations. See Note 9 for additional information regarding fair value measurements for these equity investments.

8. FINANCIAL INSTRUMENTS

The Company enters into forward foreign exchange contracts that economically hedge certain of its foreign currency risks, although hedge accounting does not apply or the Company elects not to apply hedge accounting. In addition, the Company enters into interest rate swaps to hedge certain of its interest rate risks on its debt. The Company monitors its positions with, and the credit quality of, the financial institutions that are party to its financial transactions. Prior to the sale of the restricted Endeavor Content business, the Company also entered into forward foreign exchange contracts to hedge its foreign currency exposures on future production expenses denominated in various foreign currencies (i.e., cash flow hedges).

As of September 30, 2022, the Company had the following outstanding forward foreign exchange contracts (all outstanding contracts have maturities of less than 12 months from September 30, 2022, with the exception of four contracts which mature within 18 months from such date) (in thousands except for exchange rates):

Foreign Currency	Foreign Currency Amount		US Dollar Amount	Weighted Average Exchange Rate Per $1 USD
British Pound Sterling	£ 61,992	in exchange for	$77,648	£ 0.80
Euro	€9,907	in exchange for	$10,100	€0.98
Singapore Dollar	S$2,400	in exchange for	$1,754	S$ 1.37

For forward foreign exchange contracts designated as cash flow hedges, the Company recognized net gains (losses) in accumulated other comprehensive income (loss) of none and $(0.6) million for the three months ended September 30, 2022 and 2021, respectively, and $0.3 million and $(0.4) million for the nine months ended September 30, 2022 and 2021, respectively. The Company reclassified $0.8 million gain into net income for the nine months ended September 30, 2022 in connection with the sale of the restricted Endeavor Content business and is included in the gain as described in Note 4. The Company did not reclassify any gains or losses into net income (loss) for the three months ended September 30, 2022. The Company reclassified a $1.5 million gain into net income (loss) for the three and nine months ended September 30, 2021.

For forward foreign exchange contracts not designated as cash flow hedges, the Company recorded a net loss of $4.3 million and net gain of $0.6 million for the three months ended September 30, 2022 and 2021, respectively, and a net loss of $7.4 million and net gain of $1.4 million for the nine months ended September 30, 2022 and 2021, respectively, in other income (expense), net in the consolidated statements of operations.

In certain circumstances, the Company enters into contracts that are settled in currencies other than the functional or local currencies of the contracting parties. Accordingly, these contracts consist of the underlying operational contract and an embedded foreign currency derivative element. Hedge accounting is not applied to the embedded foreign currency derivative element. The Company recorded a net loss of $7.7 million and $1.2 million for the three months ended September 30, 2022 and 2021, respectively, and $8.8 million and $10.4 million for the nine months ended September 30, 2022 and 2021, respectively, in other income (expense), net in the consolidated statements of operations.

In addition, the Company has entered into interest rate swaps for $1.5 billion of its 2014 Credit Facilities and other variable interest bearing debt and has designated them cash flow hedges. The LIBOR portion of the facility from these interest rate swaps has been fixed at a coupon of 2.12% commencing from June 2019 until June 2024. In August 2022, the Company entered into additional interest rate hedges to swap additional $750 million of its 2014 Credit Facilities from floating interest expense to fixed. The LIBOR portion of the facility from these interest rate swaps has been fixed at a coupon of 3.162% until August 2024. Hedge accounting is applied to these additional interest rate swaps, similar to the pre-existing interest rate swaps. For the three months ended September 30, 2022 and 2021, the Company recorded gains (losses) of $45.1 million and $(0.1) million in accumulated other comprehensive income (loss) and reclassified losses of none and $7.7 million into net income (loss), respectively. For the nine months ended September 30, 2022 and 2021, the Company recorded gains of $107.3 million and $13.2 million in accumulated other comprehensive income (loss) and reclassified losses of $12.4 million and $22.6 million into net income (loss).

9. FAIR VALUE MEASUREMENTS

The fair value hierarchy is composed of the following three categories:

Level 1—Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2—Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

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Level 3—Inputs to the valuation methodology are unobservable and significant to the fair value measurements.

The following tables present, for each of the fair value hierarchy levels, the Company’s assets and liabilities that are measured at fair value on a recurring basis (in thousands):

	Fair Value Measurements as of
	September 30, 2022
	Level I		Level II		Level III		Total
Assets:
Investments in equity securities with readily determinable fair values	$	306	$	—	$	—	$	306
Interest rate swaps		—		71,497		—		71,497
Forward foreign exchange contracts		—		2,412		—	$	2,412
Total	$	306	$	73,909	$	—	$	74,215
Liabilities:
Contingent consideration	$	—	$	—	$	4,377	$	4,377
Forward foreign exchange contracts		—		20,803		—		20,803
Total	$	—	$	20,803	$	4,377	$	25,180

	Fair Value Measurements as of
	December 31, 2021
	Level I		Level II		Level III		Total
Assets:
Investments in equity securities with readily determinable fair values	$	665	$	—	$	—	$	665
Forward foreign exchange contracts		—		2,529		—		2,529
Total	$	665	$	2,529	$	—	$	3,194
Liabilities:
Contingent consideration	$	—	$	—	$	26,900	$	26,900
Interest rate swaps		—		48,427		—		48,427
Forward foreign exchange contracts		—		13,363		—		13,363
Total	$	—	$	61,790	$	26,900	$	88,690

There have been no transfers of assets or liabilities between the fair value measurement classifications during the three and nine months ended September 30, 2022.

Investments in Equity Securities with Readily Determinable Fair Values

The estimated fair value of the Company’s equity securities with readily determinable fair values is based on observable inputs in an active market, which is a Level 1 measurement within the fair value hierarchy.

Contingent Consideration

The Company has recorded contingent consideration liabilities in connection with its acquisitions. Contingent consideration is included in current liabilities and other long-term liabilities in the consolidated balance sheets. Changes in fair value are recognized in selling, general and administrative expenses. The estimated fair value of the contingent consideration is based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy.

The changes in the fair value of contingent consideration were as follows (in thousands):

	Nine Months Ended September 30, 2022
Balance at December 31, 2021	$	26,900
Acquisitions		1,500
Payments		(26,183	)
Change in fair value		2,243
Foreign currency translation		(83	)
Balance at September 30, 2022	$	4,377

Payments made during the nine months ended September 30, 2022 primarily related to the settlement of the premium contingent consideration with 32 Equity LLC ("32 Equity"). See Note 11.

Foreign Currency Derivatives

The Company classifies its foreign currency derivatives within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments (Note 8). As of September 30, 2022 and December 31, 2021, the Company had $2.1 million and $2.3 million in other current assets, none and $0.2 million in assets held for sale, $0.3 million and none in other assets, $11.6 million and $4.5 million in other current liabilities, none and $0.4 million in liabilities held for sale, and $9.2 million and $8.5 million in other long-term liabilities, respectively, recorded in the consolidated balance sheets related to the Company’s foreign currency derivatives.

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Interest Rate Swaps

The Company classifies its interest rate swaps within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments (Note 8). As of September 30, 2022 and December 31, 2021, the Company had $71.5 million and none in other assets and none and $48.4 million in other long-term liabilities, respectively, recorded in the consolidated balance sheets related to the Company’s interest rate swaps.

10. DEBT

The following is a summary of outstanding debt (in thousands):

	September 30,			December 31,
	2022			2021
2014 Credit Facilities:
First Lien Term Loan (due May 2025)	$	2,513,449		$	2,786,048
Zuffa Credit Facilities:
Zuffa First Lien Term Loan (due April 2026)		2,817,517			2,840,767
Other debt (3.25%-14.50% Notes due at various dates through 2031)		152,417			159,010
Total principal	$	5,483,383		$	5,785,825
Unamortized discount		(19,645	)		(26,077	)
Unamortized issuance costs		(36,335	)		(46,012	)
Total debt	$	5,427,403		$	5,713,736
Less: current portion		(89,039	)		(82,022	)
Total long-term debt	$	5,338,364		$	5,631,714

2014 Credit Facilities

As of September 30, 2022 and December 31, 2021, the Company had $2.5 billion and $2.8 billion, respectively, outstanding under a credit agreement that was entered into in connection with the 2014 IMG acquisition (the "2014 Credit Facilities"). The 2014 Credit Facilities consist of a first lien secured term loan (the “First Lien Term Loan”) and a $200.0 million secured revolving credit facility (the "Revolving Credit Facility"). In September 2022, we repaid $250.0 million of term loans under the 2014 Credit Facilities.

The financial debt covenant of the 2014 Credit Facilities did not apply as of September 30, 2022 and December 31, 2021 as the Company had no borrowings outstanding under the Revolving Credit Facility.

The Company had outstanding letters of credit under the 2014 Credit Facilities totaling $19.3 million and $23.8 million as of September 30, 2022 and December 31, 2021, respectively.

Zuffa Credit Facilities

As of September 30, 2022 and December 31, 2021, the Company has $2.8 billion outstanding under a credit agreement that was entered into in connection with the 2016 Zuffa acquisition (the "Zuffa Credit Facilities"). The Zuffa Credit Facilities consist of a first lien secured term loan (the "Zuffa First Lien Term Loan") and a secured revolving credit facility in an aggregate principal amount of $205.0 million, letters of credit in an aggregate face amount not in excess of $40.0 million and swingline loans in an aggregate principal amount not in excess of $15.0 million (collectively, the "Zuffa Revolving Credit Facility"). The Zuffa Credit Facilities are secured by liens on substantially all of the assets of Zuffa.

The financial debt covenants of the Zuffa Credit Facilities did not apply as of September 30, 2022 and December 31, 2021 as Zuffa had no borrowings outstanding under the Zuffa Revolving Credit Facility.

Under the Zuffa Credit Facilities, Zuffa had $10.0 million and no outstanding letters of credit as of September 30, 2022 and December 31, 2021, respectively.

Other Debt

On Location Revolver

The On Location ("OL") revolving credit agreement contains a financial covenant that requires OL to maintain a First Lien Leverage Ratio of Consolidated First Lien Debt to Consolidated EBITDA, as defined in the credit agreement, of no more than 3-to-1. The Company is only required to meet the First Lien Leverage Ratio if the sum of outstanding borrowings on the Revolving Credit Facility plus outstanding letters of credit exceeding $2.0 million that are not cash collateralized exceeds forty percent of the total Revolving Commitments as measured on a quarterly basis, as defined in the credit agreement. As of September 30, 2022 and December 31, 2021, the Company was in compliance with the financial debt covenants.

OL had no letters of credit outstanding under the revolving credit agreement as of September 30, 2022 and December 31, 2021.

Receivables Purchase Agreement

As of September 30, 2022 and December 31, 2021, the debt outstanding under these arrangements was $28.2 million and $50.5 million, respectively.

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Zuffa Secured Commercial Loans

As of September 30, 2022 and December 31, 2021, Zuffa was in compliance with its financial debt covenant under the Zuffa Secured Commercial Loans.

2014 Credit Facilities and Zuffa Credit Facilities

The 2014 Credit Facilities and the Zuffa Credit Facilities restrict the ability of certain subsidiaries of the Company to make distributions and other payments to the Company. These restrictions do include exceptions for, among other things, (1) amounts necessary to make tax payments, (2) a limited annual amount for employee equity repurchases, (3) distributions required to fund certain parent entities, (4) other specific allowable situations and (5) a general restricted payment basket. As of September 30, 2022, EGH held cash of $40.7 million, long-term deferred tax benefits of $132.9 million in other assets and a tax receivable agreements liability of $200.0 million, of which $41.2 million is in other current liabilities and $158.8 million is in other long-term liabilities. As of December 31, 2021, EGH held long-term deferred tax benefits of $61.5 million in other assets and a tax receivable agreements liability of $133.8 million, of which $41.2 million is in other current liabilities and $92.6 million is in other long-term liabilities. Otherwise, EGH has no material separate cash flows, assets or liabilities other than the investments in its subsidiaries. All its business operations are conducted through its operating subsidiaries; it has no material independent operations. EGH has no other material commitments or guarantees. As a result of the restrictions described above, substantially all of the subsidiaries’ net assets are effectively restricted in their ability to be transferred to EGH as of September 30, 2022 and December 31, 2021, respectively.

As of September 30, 2022 and December 31, 2021, the Company’s First Lien Term Loan under the 2014 Credit Facilities and Zuffa’s First Lien Term Loan under its Credit Facilities had an estimated fair value of $5.1 billion and $5.6 billion, respectively. The estimated fair values of the Company’s First Lien Term Loan under the 2014 Credit Facilities and Zuffa’s First Lien Term Loan under its Credit Facilities are based on quoted market values for the debt. Since the First Lien Term Loan under the 2014 Credit Facilities and Zuffa’s First Lien Term Loan under its Credit Facilities do not trade on a daily basis in an active market, fair value estimates are based on market observable inputs based on quoted market prices and borrowing rates currently available for debt with similar terms and average maturities, which are classified as Level 2 under the fair value hierarchy.

11. REDEEMABLE NON-CONTROLLING INTERESTS

On Location

In connection with the acquisition of OL in 2020, the Company entered into an Amended and Restated Limited Liability Company Agreement ("OL LLC Agreement") of Endeavor OLE Parent, LLC ("OLE Parent") with 32 Equity. The terms of the agreement provided 32 Equity with certain rights to put its common units in OLE Parent to the Company upon a termination of the Commercial License Agreement ("CLA") or at its option at any time following the Lockup Period as defined. The Company also had certain call rights to require 32 Equity to sell its common units in OLE Parent to the Company upon a termination of the CLA in the event the aforementioned put rights were not exercised. The put/call price was an amount equal to fair market value and the exercise of these put/call rights would have given rise to an obligation of the Company to make a premium payment to 32 Equity in certain circumstances. The premium payment was recognized as a separate unit of account from the non-controlling interest. As of December 31, 2021, the estimated redemption value of the non-controlling interest was $57.9 million.

In April 2022, a series of transactions was completed between the Company and 32 Equity. Per the terms of the OL LLC Agreement, 32 Equity had the right to purchase additional common units in OLE Parent from the Company that would result in 32 Equity having an aggregate ownership percentage interest in OLE Parent of 32% at a price per unit equal to the original acquisition price of its rollover equity. 32 Equity exercised such right and paid the Company cash of $87.9 million. Following this exercise, EOC issued 8,037,483 EOC common units (and 32 Equity obtained an equal number of paired shares of the Company's Class X common stock) in exchange for 32 Equity's non-controlling interests of OLE Parent. The aggregate value of the shares was $223.7 million based on the volume-weighted average trading price of the Class A common stock for thirty days ending on the day before the close. The Company and 32 Equity also agreed to settle the premium contingent consideration resulting in the Company paying 32 Equity $24.0 million in cash (Note 9). In addition, the Company issued 495,783 shares of Class A common stock to several employees of the Company in exchange for the employees' direct or indirect interests in OLE Parent based on the same valuation. As a result of these transactions, OLE Parent became an indirect wholly-owned subsidiary of EOC.

China

In June 2016, the Company received a contribution of $75.0 million from third parties in a newly formed subsidiary of the Company that was formed to expand the Company’s existing business in China ("Endeavor China"). This contribution gave the non-controlling interests holders approximately 34% ownership of the subsidiary. The holders of the non-controlling interests had the right to put their investment to the Company at any time after June 1, 2023 for fair market value. As of December 31, 2021, the estimated redemption value was $107.5 million.

In April 2022, the Company issued 5,693,774 shares of Class A common stock in exchange for the non-controlling partnership interests of Endeavor China. The aggregate value of the shares was $158.5 million based on the volume-weighted average trading price of the Class A common stock for thirty days ending on the day before the close. In addition, EOC issued 659,896 common units in EOC to several employees of the Company, including members of management (and such employees obtained an equal number of paired shares of the Company's Class X common stock), in exchange for the employees' direct or indirect interests in Endeavor China based on the same valuation. As a result of these transactions, Endeavor China became an indirect wholly-owned subsidiary of EOC.

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Barrett-Jackson

In connection with the acquisition of Barrett-Jackson in August 2022 (Note 4), the terms of the agreement provide the sellers a put option to sell their remaining ownership to IMG Auction Company, LLC, a subsidiary of the Company. The first election is between April and July 2029 for 29.9% of the total issued and outstanding units of Barrett-Jackson at that time and the second election is between April and July 2031 for any remaining ownership at that time. The purchase price of the put right is equal to Barrett-Jackson's EBITDA, as defined, multiplied by 13. This redeemable non-controlling interest was recognized at the acquisition date at fair value of $210.1 million.

Zuffa

In July 2018, the Company received a contribution of $9.7 million from third parties (the "Russia Co-Investors") in a newly formed subsidiary of the Company (the "Russia Subsidiary") that was formed to expand the Company’s existing business in Russia and certain other countries in the Commonwealth of Independent States. The terms of this contribution provide the Russia Co-Investors with a put option to sell their ownership in the Russia Subsidiary five years and nine months after the consummation of the contribution. The purchase price of the put option is the greater of the total investment amount, defined as the Russia Co-Investors’ cash contributions less cash distributions, or fair value. As of September 30, 2022 and December 31, 2021, the estimated redemption value was $9.7 million.

Frieze

In connection with the acquisition of Frieze in 2016, the terms of the agreement provide the sellers with a put option to sell their remaining 30% interest after fiscal year 2020. The Company also has a call option to buy the remaining 30% interest after fiscal year 2020 or upon termination of employment of the sellers who continued to be employees of Frieze after the acquisition. The price of the put and call option is equal to Frieze’s prior year’s EBITDA multiplied by 7.5. As of September 30, 2022 and December 31, 2021, the estimated redemption value was below the carrying value of $23.5 million and $23.8 million, respectively.

12. EARNINGS PER SHARE

Earnings per share is calculated utilizing net income available to common stockholders of the Company divided by the weighted average number of shares of Class A Common Stock outstanding during the period. Diluted EPS is calculated by dividing the net income available for common stockholders by the diluted weighted average shares outstanding for that period.

The computation of basic and diluted earnings per share and weighted average shares of the Company’s common stock outstanding for the periods presented below:

	Three Months Ended September 30, 2022			Three Months Ended September 30, 2021		Nine Months Ended September 30, 2022		May 1, 2021 - September 30, 2021
Basic (loss) earnings per share
Numerator
Consolidated net (loss) income	$	(12,538	)	$	63,613	$	547,348	$	(457,841	)
Net (loss) income attributable to NCI (Endeavor Operating Company)		(1,879	)		17,177		183,353		(154,395	)
Net (loss) income attributable to NCI (Endeavor Manager Units)		(620	)		3,951		28,682		(26,334	)
Net (loss) income attributable to the Company		(10,039	)		42,485		335,313		(277,112	)
Adjustment to net (loss) income attributable to the Company		—			—		4,348		(1,399	)
Net (loss) income attributable to EGH common shareholders	$	(10,039	)	$	42,485	$	339,661	$	(278,511	)
Denominator
Weighted average Class A Common Shares outstanding - Basic		285,870,317			262,891,070		278,724,574		261,048,116
Basic (loss) earnings per share	$	(0.04	)	$	0.16	$	1.22	$	(1.07	)

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	Three Months Ended September 30, 2022			Three Months Ended September 30, 2021			Nine Months Ended September 30, 2022			May 1, 2021 - September 30, 2021
Diluted (loss) earnings per share
Numerator
Consolidated net (loss) income	$	(12,538	)	$	63,613		$	547,348		$	(457,841	)
Net (loss) income attributable to NCI (Endeavor Operating Company)		(1,879	)		(5,507	)		8,645			(154,395	)
Net loss attributable to NCI (Endeavor Manager Units)		(620	)		—			—			(26,334	)
Net (loss) income attributable to the Company		(10,039	)		69,120			538,703			(277,112	)
Adjustment to net (loss) income attributable to the Company		(1,422	)		—			(1,803	)		(1,399	)
Net (loss) income attributable to EGH common shareholders	$	(11,461	)	$	69,120		$	536,900		$	(278,511	)
Denominator
Weighted average Class A Common Shares outstanding - Basic		285,870,317			262,891,070			278,724,574			261,048,116
Additional shares assuming exchange of all Endeavor Profits Units		—			3,569,639			1,884,386			—
Additional shares from RSUs, Stock Options and Phantom Units, as calculated using the treasury stock method		—			202,490			1,875,609			—
Additional shares assuming exchange of all Endeavor Operating Units and Endeavor Manager Units		—			169,259,312			167,046,923			—
Additional shares assuming redemption of redeemable non-controlling interests		3,936,316			—			1,226,569			—
Weighted average number of shares used in computing diluted (loss) earnings per share		289,806,633			435,922,511			450,758,061			261,048,116
Diluted (loss) earnings per share	$	(0.04	)	$	0.16		$	1.19		$	(1.07	)

	Three Months Ended September 30, 2022		Three Months Ended September 30, 2021		Nine Months Ended September 30, 2022		May 1, 2021 - September 30, 2021
Securities that are anti-dilutive for the period
Stock Options		4,131,574		2,654,007		2,512,767		3,217,374
Unvested RSUs		6,925,143		7,125,939		1,261,040		7,576,141
Manager LLC Units		24,524,798		—		—		25,340,263
EOC Common Units		143,438,952		—		—		143,087,739
EOC Profits Interest & Phantom Units		15,777,736		—		—		16,238,545

13. INCOME TAXES

EGH was incorporated as a Delaware corporation in January 2019. It was formed as a holding company for the purpose of completing an IPO and other related transactions. As the sole managing member of Endeavor Manager, which is the sole managing member of EOC, EGH operates and controls all the business and affairs of EOC, and through EOC and its subsidiaries, conducts the Company’s business. EGH is subject to corporate income tax on its share of taxable income or loss of EOC derived through Endeavor Manager. EOC is treated as a partnership for U.S. federal income tax purposes and is therefore not subject to U.S. corporate income tax. However, certain of EOC’s subsidiaries are subject to U.S. or foreign corporate income tax.

In accordance with ASC Topic 740, each interim period is considered integral to the annual period and tax expense is generally determined using an estimate of the annual effective income tax rate ("AETR"). The Company would record income tax expense each quarter using the estimated AETR to provide for income taxes on a current year-to-date basis, adjusted for discrete items, if any, that are noted in the relevant period. In accordance with the authoritative guidance for accounting for income taxes in interim periods, the Company computed its income tax provision for the three and nine months ended September 30, 2022 and 2021 based upon the AETR.

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The provision for (benefit from) income taxes for the three months ended September 30, 2022 and 2021 is $8.5 million and $(7.7) million, respectively, based on pretax income of $80.5 million and $73.8 million, respectively. The effective tax rate is 10.6% and (10.5%) for the three months ended September 30, 2022 and 2021, respectively. The (benefit from) provision for income taxes for the nine months ended September 30, 2022 and 2021 is $(6.0) million and $58.3 million, respectively, based on pretax income (loss) of $686.4 million and $(315.3) million, respectively. The effective tax rate is (0.9%) and (18.5%) for the nine months ended September 30, 2022 and 2021, respectively. The tax expense for the three months ended September 30, 2022 differs from the same period in 2021 primarily due to additional estimated annual pre-tax income in 2022, which affects the AETR, partially offset by the release of a $12.2 million valuation allowance on deferred tax assets in 2022. The tax expense for the nine months ended September 30, 2022 differs from the same period in 2021 primarily due to the release of a $65.9 million valuation allowance on deferred tax assets in 2022. The release of the valuation allowance was due to the expected realization of certain tax benefits in connection with a tax receivable agreement ("TRA") liability. In addition, during the nine months ended September 30, 2021, $7.4 million of deferred tax liabilities associated with indefinite lived intangibles were recorded as a result of the IPO and tax expense of $10.2 million was recorded related to a change in tax rate in the United Kingdom. Any tax balances reflected on the September 30, 2022 balance sheet would be adjusted accordingly to reflect the actual financial results for the year ending December 31, 2022.

The Company’s effective tax rate differs from the U.S. federal statutory rate primarily due to partnership income not subject to income tax; state and local income taxes; withholding taxes in foreign jurisdictions that are not based on net income; and income subject to tax in foreign jurisdictions which differ from the U.S. federal statutory income tax rate as well as the relative amount of income earned in those jurisdictions.

As of September 30, 2022 and December 31, 2021, the Company had unrecognized tax benefits of $41.5 million and $40.0 million, respectively, for which we are unable to make a reasonable and reliable estimate of the period in which these liabilities will be settled with the respective tax authorities.

The Company records valuation allowances against its net deferred tax assets when it is more likely than not that all, or a portion, of a deferred tax asset will not be realized. The Company evaluates the realizability of its deferred tax assets by assessing the likelihood that its deferred tax assets will be recovered based on all available positive and negative evidence, including historical results, reversals of deferred tax liabilities, estimates of future taxable income, tax planning strategies and results of operations. During the nine months ended September 30, 2022, the Company released a $65.9 million valuation allowance on deferred tax assets due to the expected realization of certain tax benefits based on estimates of future taxable income. The Company has determined the remaining net deferred tax assets at EGH, exclusive of deferred tax liabilities associated with indefinite lived intangibles, will not be realized and as a result, has recorded a valuation allowance as of September 30, 2022.

Inflation Reduction Act of 2022

On August 16, 2022, the United States enacted the Inflation Reduction Act of 2022 ("IRA"). The IRA, among other things, creates a 15% corporate alternative minimum tax ("CAMT") on adjusted financial statement income for applicable corporations. The CAMT is effective for tax years beginning after December 31, 2022. Additionally, the IRA establishes a 1% excise tax on stock repurchases made by publicly traded US corporations and is effective for stock repurchases after December 31, 2022. While we continue to evaluate the potential tax effects of the IRA, we are currently not expecting the IRA to have a material impact on our consolidated financial statements.

Tax Receivable Agreements

In connection with the IPO and related transactions, the Company entered into TRAs with certain persons that held direct or indirect interests in EOC and Zuffa prior to the IPO, including management of the Company ("TRA Holders"). The TRAs generally provide for the payment by EGH of 85% of the amount of any tax benefits that EGH actually realizes, or in some cases is deemed to realize, as a result of (i) increases in EGH’s share of the tax basis in the net assets of EOC resulting from any redemptions or exchanges of LLC Units, (ii) increases in tax basis attributable to payments made under the TRAs, (iii) deductions attributable to imputed interest pursuant to the TRAs and (iv) other tax attributes allocated to EGH post-IPO and related transactions that were allocable to the TRA Holders prior to the IPO and related transactions.

In connection with the expected realization of certain tax benefits including deferred tax assets, the Company has a $200.0 million TRA liability as of September 30, 2022.

If the existing valuation allowance recorded against deferred tax assets is released in a future period as a result of having sufficient taxable income, among other criteria, or other tax attributes subject to the TRAs are determined to be payable, additional TRA liabilities may be recorded. If the relevant criteria are met in 2022, the Company would release a valuation allowance and record the associated TRA liability, each of which we would expect to be material.

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14. REVENUE

The following table presents the Company’s revenue disaggregated by primary revenue sources for the three and nine months ended September 30, 2022 and 2021 (in thousands):

	Three Months Ended September 30, 2022
	Owned Sports Properties		Events, Experiences & Rights		Representation		Total
Media rights	$	200,310	$	133,600	$	—	$	333,910
Media production, distribution and content		1,026		84,160		61,387		146,573
Events and academy		200,936		222,845		—		423,781
Talent representation and licensing		—		—		244,370		244,370
Marketing		—		—		82,578		82,578
Eliminations		—		—		—		(9,796	)
Total	$	402,272	$	440,605	$	388,335	$	1,221,416

	Nine Months Ended September 30, 2022
	Owned Sports Properties		Events, Experiences & Rights		Representation		Total
Media rights	$	529,343	$	470,797	$	—	$	1,000,140
Media production, distribution and content		5,150		248,159		199,140		452,449
Events and academy		496,398		1,175,334		—		1,671,732
Talent representation and licensing		—		—		665,929		665,929
Marketing		—		—		238,542		238,542
Eliminations		—		—		—		(21,098	)
Total	$	1,030,891	$	1,894,290	$	1,103,611	$	4,007,694

	Three Months Ended September 30, 2021
	Owned Sports Properties		Events, Experiences & Rights		Representation		Total
Media rights	$	156,973	$	162,365	$	—	$	319,338
Media production, distribution and content		1,510		81,818		399,473		482,801
Events and academy		130,038		202,150		—		332,188
Talent representation and licensing		—		—		201,106		201,106
Marketing		—		—		64,144		64,144
Eliminations		—		—		—		(8,274	)
Total	$	288,521	$	446,333	$	664,723	$	1,391,303

	Nine Months Ended September 30, 2021
	Owned Sports Properties		Events, Experiences & Rights		Representation		Total
Media rights	$	497,564	$	796,348	$	—	$	1,293,912
Media production, distribution and content		4,937		259,229		591,671		855,837
Events and academy		328,366		459,038		—		787,404
Talent representation and licensing		—		—		493,780		493,780
Marketing		—		—		156,413		156,413
Eliminations		—		—		—		(15,189	)
Total	$	830,867	$	1,514,615	$	1,241,864	$	3,572,157

In the three months ended September 30, 2022 and 2021, there was revenue recognized of $12.8 million and $14.6 million, respectively, from performance obligations satisfied in prior periods. In the nine months ended September 30, 2022 and 2021, there was revenue recognized of $42.4 million and $36.8 million, respectively, from performance obligations satisfied in prior periods.

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Remaining Performance Obligations

The following table presents the aggregate amount of transaction price allocated to remaining performance obligations for contracts greater than one year with unsatisfied or partially satisfied performance obligations as of September 30, 2022 (in thousands). The transaction price related to these future obligations does not include any variable consideration.

	Years Ending December 31,
Remainder of 2022	$	391,316
2023		1,659,804
2024		1,253,988
2025		1,092,802
2026		198,750
Thereafter		576,626
	$	5,173,286

Contract Liabilities

The Company records deferred revenue when cash payments are received or due in advance of its performance. The Company’s deferred revenue balance primarily relates to advance payments received related to advertising and sponsorship agreements, event advanced ticket sales and performance tuition. Deferred revenue is included in the current liabilities section and in other long-term liabilities in the consolidated balance sheets.

The following table presents the Company’s contract liabilities as of September 30, 2022 and December 31, 2021 (in thousands):

Description	December 31, 2021		Additions		Deductions (1)			Acquisitions		Held for Sale			Foreign Exchange			September 30, 2022
Deferred revenue - current	$	651,760	$	1,901,792	$	(1,960,241	)	$	26,974	$	(2,903	)	$	(7,667	)	$	609,715
Deferred revenue - noncurrent	$	62,155	$	12,447	$	(3,980	)	$	2,082	$	—		$	(289	)	$	72,415

(1) As of September 30, 2022, the balance in deductions also included $3.6 million and $0.8 million in deferred revenue - current and deferred revenue - noncurrent, respectively, primarily due to the divestiture of DBH (Note 4).

15. SEGMENT INFORMATION

As of September 30, 2022, the Company has three reportable segments: Owned Sports Properties, Events, Experiences & Rights, and Representation. The Company also reports the results for the "Corporate" group. The profitability measure employed by the Company’s chief operating decision maker for allocating resources and assessing operating performance is Adjusted EBITDA. Segment information is presented consistently with the basis for the year ended December 31, 2021. Summarized financial information for the Company’s reportable segments is shown in the following tables (in thousands):

Revenue

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Owned Sports Properties	$	402,272		$	288,521		$	1,030,891		$	830,867
Events, Experiences & Rights		440,605			446,333			1,894,290			1,514,615
Representation		388,335			664,723			1,103,611			1,241,864
Eliminations		(9,796	)		(8,274	)		(21,098	)		(15,189	)
Total consolidated revenue	$	1,221,416		$	1,391,303		$	4,007,694		$	3,572,157

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Reconciliation of segment profitability

	Three Months Ended September 30,						Nine Months Ended September 30,
		2022		2021			2022			2021
Owned Sports Properties	$	195,749		$	134,679		$	505,760		$	412,495
Events, Experiences & Rights		49,668			84,993			290,268			160,843
Representation		132,923			141,801			345,849			264,969
Corporate		(75,258	)		(78,156	)		(217,991	)		(187,476	)
Adjusted EBITDA		303,082			283,317			923,886			650,831
Reconciling items:
Equity losses (earnings) of affiliates		1,333			3,052			(4,060	)		876
Interest expense, net		(75,608	)		(55,783	)		(197,385	)		(207,970	)
Depreciation and amortization		(63,571	)		(71,661	)		(195,177	)		(208,058	)
Equity-based compensation expense		(48,388	)		(60,885	)		(159,851	)		(464,393	)
Merger, acquisition and earn-out costs		(30,529	)		(13,107	)		(57,891	)		(38,291	)
Certain legal costs		(1,604	)		266			(11,204	)		(4,260	)
Restructuring, severance and impairment		(869	)		(2,179	)		(2,829	)		(6,612	)
Fair value adjustment - equity investments		291			(90	)		13,635			13,614
Gain on sale of the restricted Endeavor Content business		—			—			463,641			—
Tax receivable agreements liability adjustment		(10,405	)		—			(61,497	)		—
Other		6,749			(9,152	)		(24,914	)		(51,063	)
Income (loss) before income taxes and equity losses of affiliates	$	80,481		$	73,778		$	686,354		$	(315,326	)

16. COMMITMENTS AND CONTINGENCIES

Claims and Litigation

The Company is involved in legal proceedings, claims and governmental investigations arising in the normal course of business. The types of allegations that arise in connection with such legal proceedings vary in nature, but can include contract, employment, tax and intellectual property matters. The Company evaluates all cases and records liabilities for losses from legal proceedings when the Company determines that it is probable that the outcome will be unfavorable and the amount, or potential range, of loss can be reasonably estimated. While any outcome related to litigation or such governmental proceedings cannot be predicted with certainty, management believes that the outcome of these matters, except as otherwise may be discussed below, individually or in the aggregate, will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.

An employee of the Company is one of several individuals and entities named in a complaint by India’s Director of Enforcement ("DE"), initially filed in January 2015, alleging violations of the Foreign Exchange Management Act ("FEMA"). The complaint alleges that the employee participated as an advisor in a series of transactions in 2009 that were completed by and on behalf of a client, the Board of Control for Cricket in India (the "BCCI"), and that contravened two provisions of FEMA. The subject transactions were pursued under the direction and control of one of the BCCI’s board members. The Company is not alleged to have possessed any funds improperly or to have made or received any of the payments that are alleged to have violated FEMA. The Company is cooperating with the DE’s investigation which, at present, is in its early stages.

In July 2017, the Italian Competition Authority ("ICA") issued a decision opening an investigation into alleged breaches of competition law in Italy, involving inter alia IMG, and relating to bidding for certain media rights of the Serie A and Serie B football leagues. In April 2018, the European Commission conducted on-site inspections at a number of companies that are involved with sports media rights, including the Company. The inspections were part of an ongoing investigation into the sector and into potential violations of certain antitrust laws that may have taken place within it. The Company investigated these ICA matters, as well as other regulatory compliance matters. In May 2019, the ICA completed its investigation and fined the Company approximately EUR 0.3 million. As part of its decision, the ICA acknowledged the Company’s cooperation and ongoing compliance efforts since the investigation commenced. In July 2019, three football clubs and in June 2020, the Serie A football league (Lega Nazionale Professionisti Serie A or "Lega Nazionale," and together with the three clubs, the "Plaintiffs") each filed separate claims against IMG and certain other unrelated parties in the Court of Milan, Italy, alleging that IMG engaged in anti-competitive practices with regard to bidding for certain media rights of the Serie A and Serie B football leagues. The Plaintiffs seek damages from all defendants in amounts totaling EUR 554.6 million in the aggregate relating to the three football clubs and EUR 1,592.2 million relating to Lega Nazionale, along with attorneys’ fees and costs (the "Damages Claims"). Since December 2020, four additional football clubs have each filed requests to intervene in the Lega Nazionale proceedings and individually seek to claim amounts in the aggregate totaling EUR 251.5 million. Ten other clubs also filed requests to intervene in support of Lega Nazionale’s claim or alternatively to individually claim in the amount of EUR 92.1 million, in the case of one club, and unspecified amounts (to be quantified as a percentage of the total amount sought by Lega Nazionale) in the other nine cases. Collectively, the interventions of these 14 clubs are the "Interventions." The Company has defended in its submissions to date, and intends to continue to defend, against the Damages Claims, Interventions and any related claims, and management believes that the Company has meritorious defenses to these claims, including the absence of standing of the clubs, and the absence of actual damage. The Company may also be subject to regulatory and other claims and actions with respect to these ICA and other regulatory matters. Any judgment entered against the Company or settlement entered into, including with respect to claims or actions brought by other parties, could materially and adversely impact the Company’s business, financial condition and results of operations.

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Zuffa has five related class-action lawsuits filed against it in the United States District Court for the Northern District of California (the "District Court") between December 2014 and March 2015 by a total of eleven former UFC fighters. The complaints in the five lawsuits are substantially identical. Each alleges that Zuffa violated Section 2 of the Sherman Act by monopolizing the alleged market for the promotion of elite professional MMA bouts and monopolizing the alleged market for elite professional MMA fighters’ services. Plaintiffs claim that Zuffa’s alleged conduct injured them by artificially depressing the compensation they received for their services and their intellectual property rights, and they seek treble damages under the antitrust laws, as well as attorneys’ fees and costs, and injunctive relief. On December 14, 2020, the District Court orally indicated its intention to grant plaintiffs’ motion to certify the Bout Class (comprised of fighters who participated in bouts from December 16, 2010 to September 30, 2017) and to deny plaintiffs’ motion to certify the Identity Class (a purported class based upon the alleged expropriation and exploitation of fighter identities). The Company is awaiting the official written order from the judge and assuming he rules as previously indicated, then the Company will seek an appeal of this decision. On June 23, 2021, plaintiffs’ lawyers filed a new case against Zuffa and EGH alleging substantially similar claims, but providing for a class period from July 1, 2017 to present. Management believes that the Company has meritorious defenses against the allegations and intends to defend itself vigorously.

17. RELATED PARTY TRANSACTIONS

The Company has the following related party transactions as of September 30, 2022 and December 31, 2021 and for the three and nine months ended September 30, 2022 and 2021 (in thousands):

	September 30,		December 31,
	2022		2021
Other current assets	$	22,109	$	4,728
Investments		2,174		—
Other assets		—		322
Accrued liabilities		10,800		—
Deferred revenue		2,350