SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2024

SEGMENT INFORMATION [Abstract]

SEGMENT INFORMATION

19. SEGMENT INFORMATION

Prior to the acquisition of WWE, the Company operated as a single reportable segment. Subsequent to the acquisition of WWE and effective September 12, 2023, the Company identified two reportable segments: UFC and WWE, to align with how the Company’s chief operating decision maker (the “CODM”), the Chief Executive Officer, manages the businesses, evaluates financial results, and makes key operating decisions. The UFC segment consists entirely of the operations of the Company’s UFC business which was the sole reportable segment prior to the acquisition of WWE, while the WWE segment consists entirely of the operations of the WWE business acquired on September 12, 2023.

The Company also reports the results for the “Corporate” group. The Corporate group reflects operations not allocated to the UFC or WWE segments and primarily consists of general and administrative expenses. These expenses relate largely to corporate activities, including information technology, facilities, legal, human resources, finance, accounting, treasury, investor relations, corporate communications, community relations and compensation to TKO’s management and board of directors, which support both reportable segments. Corporate expenses also include service fees paid by the Company to Endeavor related to certain corporate activities as well as certain revenue generating activities under the Services Agreement.

The profitability measure employed by the Company’s CODM for allocating resources and assessing operating performance is Adjusted EBITDA. The Company defines Adjusted EBITDA as net income, excluding income taxes, net interest expense, depreciation and amortization, equity-based compensation, merger and acquisition costs, certain legal costs, restructuring, severance and impairment charges, and certain other items when applicable. Adjusted EBITDA includes amortization expenses directly related to supporting the operations of the Company’s segments, including content production asset amortization. The Company's CODM considers budget-to-actual and quarter-over-quarter variances when making decisions about allocating capital and personnel to the segments. The Company believes the presentation of Adjusted EBITDA is relevant and useful for investors because it allows investors to view the Company’s segment performance in the same manner as the Company’s CODM to evaluate segment performance and make decisions about allocating resources. Additionally, the Company believes that Adjusted EBITDA is a primary measure used by media investors, analysts and peers for comparative purposes.

The Company does not disclose assets by segment information. The Company does not provide assets by segment information to the Company’s CODM, as that information is not typically used in the determination of resource allocation and assessing business performance of each reportable segment. A significant portion of the Company’s assets following the Transactions represent goodwill and intangible assets arising from the Transactions.

The following tables present summarized financial information for each of the Company’s reportable segments (in thousands)

UFC

	Year Ended December 31,
	2024		2023		2022
Revenue	$	1,406,241	$	1,292,201	$	1,140,147
Direct operating costs (1)		430,223		383,388		325,586
Selling, general and administrative expenses (1)		175,024		153,149		133,932
Adjusted EBITDA		800,994		755,664		680,629

WWE

	Year Ended December 31,
	2024		2023		2022
Revenue	$	1,398,100	$	382,767	$	—
Direct operating costs (1)		426,900		125,685		—
Selling, general and administrative expenses (1)		290,032		94,101		—
Adjusted EBITDA		681,168		162,981		—

(1)Direct operating costs and selling, general and administrative expenses included in the measure of Adjusted EBITDA for each segment excludes reconciling items included in the reconciliation of segment profitability below.

Revenue

	Year Ended December 31,
	2024		2023		2022
UFC	$	1,406,241	$	1,292,201	$	1,140,147
WWE		1,398,100		382,767		—
Total consolidated revenue	$	2,804,341	$	1,674,968	$	1,140,147

Reconciliation of segment profitability

	Year Ended December 31,
	2024			2023			2022
UFC	$	800,994		$	755,664		$	680,629
WWE		681,168			162,981			—
Corporate		(230,923	)		(109,557	)		(51,919	)
Total Adjusted EBITDA		1,251,239			809,088			628,710
Reconciling items:
Equity (earnings) losses of affiliates		(411	)		266			209
Interest expense, net		(249,115	)		(239,042	)		(139,567	)
Depreciation and amortization		(392,842	)		(164,616	)		(60,032	)
Equity-based compensation expense (1)		(94,636	)		(57,109	)		(23,744	)
Merger and acquisition costs (2)		(21,172	)		(83,832	)		—
Certain legal costs (3)		(401,062	)		(34,238	)		(753	)
Restructuring, severance and impairment (4)		(41,911	)		(21,459	)		—
Debt transaction costs (5)		(16,230	)		—			—
Other adjustments		490			(1,623	)		(1,274	)
Income before income taxes and equity (earnings) losses of affiliates	$	34,350		$	207,435		$	403,549

(1)Equity-based compensation represents non-cash compensation expense for awards issued under Endeavor’s 2021 Plan subsequent to its April 28, 2021 IPO, for the Replacement Awards and for awards issued under the 2023 Incentive Award Plan. For the year ended December 31, 2024, equity-based compensation includes $17.7 million of expense associated with certain services provided by an independent contractor in the WWE segment. For the year ended December 31, 2024 and 2023, equity-based compensation includes $3.3 million and $19.9 million, respectively, of expense associated with accelerated vesting of the Replacement Awards related to the workforce reduction of certain employees in the WWE segment and Corporate.

(2)Includes (i) certain costs of professional fees and bonuses related to the Transactions and payable contingent on the closing of the Transactions primarily incurred during the year ended December 31, 2023 and (ii) certain costs of professional advisors related to other strategic transactions, primarily the Endeavor Asset Acquisition, incurred during the year ended December 31, 2024.

(3)Includes costs related to certain litigation matters including antitrust lawsuits for UFC and WWE and matters where Mr. McMahon has agreed to make future payments to certain counterparties personally. For the year ended December 31, 2024, these costs include settlement charges of $375.0 million regarding the UFC antitrust lawsuit, as described in Note 21, Commitments and Contingencies. For the year ended December 31, 2023, these costs included the settlement of a WWE antitrust matter for $20.0 million.

(4)Includes costs resulting from the Company’s cost reduction program during the years ended December 31, 2024 and 2023, as described in Note 17, Restructuring Charges. Additionally, during the year ended December 31, 2024, the Company recorded impairment charges of $27.9 million as a result of reducing the carrying value of WWE assets held for sale to their fair value less cost to sell, as described in Note 5, Supplementary Data.

(5)For the year ended December 31, 2024, the Company incurred certain costs associated with the Credit Agreement Amendment, as described in Note 8, Debt.

Geographic information

Revenue by major geographic region is based upon the geographic location of where our revenue is generated. The information below summarizes our revenue by geographic area:

	Year Ended December 31,
	2024		2023		2022
North America	$	2,167,168	$	1,280,727	$	893,774
Europe/Middle East/Africa		407,439		228,103		129,511
Asia Pacific		187,259		134,647		86,936
Latin America		42,475		31,491		29,926
Total revenue	$	2,804,341	$	1,674,968	$	1,140,147

The Company's property, buildings and equipment were almost entirely located in the United States at December 31, 2024 and 2023.