RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2024

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

19.RELATED PARTY TRANSACTIONS

The Company has the following related party transactions as of September 30, 2024 and December 31, 2023 and for the three and nine months ended September 30, 2024 and 2023 (in thousands):

	September 30,		December 31,
	2024		2023
Other current assets	$	26,167	$	11,837
Investments		3,673		3,322
Other assets		30,000		33,454
Deferred revenue		64		1,446
Other current liabilities		4,543		3,347
Current liabilities of discontinued operations		4,463		—

	Three Months Ended September 30,					Nine Months Ended September 30,
	2024			2023		2024			2023
Revenue	$	10,020		$	5,940	$	55,969		$	35,946
Direct operating costs		2,250			3,486		7,460			7,793
Selling, general and administrative expenses		838			702		8,177			3,250
Other expense, net		—			—		—			(5,254	)
Loss from discontinued operations		(1,699	)		—		(12,687	)		(4,314	)

As of September 30, 2024, the Company has an equity-method investment in Euroleague, a related party. For the three and nine months ended September 30, 2024 and 2023, the Company recognized revenue of $0.1 million, $5.6 million, $0.1 million and $6.0 million, respectively, for a management fee to compensate it for representation and technical services it provides to Euroleague in relation to the distribution of media rights, which is included in the Owned Sports Properties segment. Also, for the three and nine months ended September 30, 2024 and 2023, the Company recognized revenue of $0.2 million, $6.9 million, less than $0.1 million and $6.5 million, respectively, for production services provided to Euroleague, which is included in the Events, Experiences & Rights segment. The Company incurred direct operating costs of $0.4 million, $7.5 million, $0.1 million and $4.5 million for services provided by the Euroleague during the three and nine months ended September 30, 2024 and 2023, respectively, which are primarily related to the Sports Data & Technology segment and are recorded in the (loss) income from discontinued operations. As of September 30, 2024 and December 31, 2023, the Company

had a receivable due from Euroleague of $15.1 million and $7.7 million, respectively, and a payable due to Euroleague of $5.4 million and none, respectively. The majority of the payable was included in current liabilities of discontinued operations in the consolidated balance sheet.

As of September 30, 2024 the Company has an equity method investment in Fifth Season, a related party. For the three and nine months ended September 30, 2024 and 2023, the Company recognized revenue of $0.6 million, $20.2 million, $0.9 million and $1.3 million, respectively, for production services, which are primarily included in the Representation segment. As of September 30, 2024 and December 31, 2023, the Company had a receivable due from Fifth Season of $3.4 million and $1.0 million, respectively, and a payable due to Fifth Season of $0.2 million and $1.2 million, respectively. In June 2023, the Company provided a loan of $30.0 million to Fifth Season, which is recorded in other assets in the consolidated balance sheet. The loan matures in 2026.

Silver Lake and certain of our executives indirectly own a minority interest in The Raine Group ("Raine"). During the three and nine months ended September 30, 2024 and 2023, the Company recorded expenses of none, $3.0 million, none and $10.8 million, respectively, in transaction costs with Raine for investment banking services in connection with the sale of certain businesses. In addition, during three and nine months ended September 30, 2024 and 2023, the Company invested none, $0.3 million, none and $1.2 million, respectively, in non-marketable funds maintained by Raine that are recorded as investments in the consolidated balance sheet.

In connection with the IPO and related transactions, the Company entered into a TRA with certain persons that held direct or indirect interests in EOC and Zuffa prior to the IPO. The TRA generally provides for the payment by EGH of 85% of the amount of any tax benefits that EGH actually realizes (determined by using certain assumptions), or in some cases is deemed to realize as a result of certain attributes (Note 15). As of September 30, 2024 and December 31, 2023, the Company had $869.0 million and $990.5 million recorded, respectively, of which $298.6 million and $362.8 million, respectively, is due to related parties.

Vincent K. McMahon, who served as the Executive Chairman of TKO's Board of Directors until January 26, 2024, previously controlled a significant portion of the voting power of the issued and outstanding shares of TKO’s common stock.

Mr. McMahon has agreed to make future payments to certain counterparties personally. In accordance with the SEC’s Staff Accounting Bulletin Topic 5T, Miscellaneous Accounting, Accounting for Expenses or Liabilities Paid by Principal Stockholders (“Topic 5T”), TKO concluded that these amounts should be recognized by TKO as expenses in the period in which they become probable and estimable.

As of December 31, 2023, total liabilities of $1.5 million are included within accrued expenses in our consolidated balance sheet related to future payments owed by Mr. McMahon to certain counterparties. During the nine months ended September 30, 2024, Mr. McMahon made payments of $1.5 million associated with these liabilities to certain counterparties directly. Since these liabilities existed when Mr. McMahon controlled a significant portion of the voting power of TKO’s common stock, these payments are considered non-cash capital contributions and are included as principal stockholder contributions in our consolidated statements of stockholders’ equity.

In connection with and/or arising from the investigation conducted by a Special Committee of the former WWE board of directors, Mr. McMahon has agreed to reimburse TKO for additional costs incurred in connection with and/or arising from the same matters.