Board Authorized $2 Billion Share Repurchase
Program and Approved Initiation of Quarterly Cash Dividend Program
of $75 Million
All-Equity Transaction Includes Professional
Bull Riders, On Location, and IMG
Special Committee of TKO’s Independent
Directors Unanimously Recommended Approval of Transaction
TKO Group Holdings, Inc. (“TKO”) (NYSE: TKO), a premium sports
and entertainment company, announced today that its board of
directors has authorized a share repurchase program of up to $2.0
billion of its Class A common stock and the initiation of a
quarterly cash dividend program pursuant to which holders of TKO’s
Class A common stock will receive their pro rata share of $75.0
million in quarterly distributions to be made by TKO Operating
Company, LLC.
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Also today, TKO announced it has reached a definitive agreement
with Endeavor Group Holdings, Inc. (“Endeavor”) (NYSE: EDR) to
acquire Professional Bull Riders (“PBR”), On Location, and IMG in
an all-equity transaction valued at $3.25 billion. In addition to
complementing TKO’s existing core UFC and WWE businesses, the
strategic acquisition of these sports and hospitality assets from
Endeavor expands TKO’s operational footprint in the fast-growing
premium sports market and enables direct participation in the
upside from partner leagues and events.
Ariel Emanuel, Executive Chair and CEO of TKO, said: “Today’s
announcements reflect the continued strength of our underlying
business and our commitment to deploying capital through a balanced
capital allocation strategy, including through our share repurchase
program and quarterly cash dividend program. This underscores our
continued focus on delivering sustainable long-term value for our
shareholders.”
Mark Shapiro, President and COO of TKO, said: “PBR, On Location,
and IMG are industry-leading assets that meaningfully enhance TKO’s
portfolio and strengthen our position in premium sports globally.
Within TKO, they will help power the growth of our revenue streams
and position us to capture even more upside from some of the most
attractive parts of our sports ecosystem: media rights, live
events, ticket sales, premium experiences, brand partnerships, and
site fees. These assets are already built into our business
strategy at TKO and will serve to further enhance our strong track
record of execution across UFC and WWE.”
TRANSACTION EXPANDS TKO’S LEADERSHIP AND POWERS GROWTH IN
PREMIUM SPORTS
PBR is the world’s premier bull riding league organizing more
than 200 annual live events, welcoming approximately 1.25 million
fans, and reaching more than 285 million households in more than 65
territories. PBR CEO and Commissioner Sean Gleason will continue to
lead the organization.
On Location is a leading provider of premium experiences for
fans attending more than 1,200 sporting events, including the Super
Bowl, Ryder Cup, NCAA Final Four, FIFA World Cup 26, and the 2026
and 2028 Olympic and Paralympic Games, in addition to year-round
live events organized by UFC and WWE. On Location president Paul
Caine will continue to lead the organization.
IMG is one of the world's largest global distributors and
producers of sports content, packages and sells media rights and
brand partnerships, and provides industry-leading strategic
consultancy, digital services, and event management for more than
200 rightsholders. Clients include the National Football League,
English Premier League, International Olympic Committee, National
Hockey League, Major League Soccer, ATP and WTA Tours, the All
England Lawn Tennis & Croquet Club (Wimbledon), EuroLeague
Basketball, DP World Tour, and The R&A, as well as UFC, WWE,
and PBR. The acquisition of IMG does not include businesses
associated with the IMG brand in licensing, models, and tennis
representation, nor IMG’s full events portfolio. Adam Kelly will
lead IMG as president.
Transaction Details
Under the terms of the agreement, TKO will acquire the Endeavor
assets for a total consideration of $3.25 billion, based on the
25-trading-day volume-weighted average price of TKO’s Class A
common stock for the period ending on October 23, 2024. Endeavor
will receive approximately 26.14 million common units of TKO
Operating Company, LLC and will subscribe for an equal number of
shares of TKO’s Class B common stock, with Endeavor expected to own
approximately 59% of TKO alongside the other existing TKO
shareholders, who will own the remaining 41% upon completion of the
transaction. The transaction is also subject to purchase price
adjustments to be settled in cash and equity.
TKO formed a Special Committee of independent directors of the
board to review, negotiate, and consider the proposed transaction.
The Special Committee reviewed, negotiated, unanimously approved,
and recommended approval of the proposed transaction by TKO’s board
of directors. Following formal and unanimous approval by TKO’s
board of directors, the definitive agreement was signed, and the
transaction was approved by the written consent of stockholders
representing a majority of the outstanding voting interests of
TKO.
The transaction is subject to the satisfaction of customary
closing conditions and required regulatory approvals. No other
stockholder approval is required. The transaction is expected to
close in the first half of 2025.
Advisors
Morgan Stanley & Co. LLC is serving as financial advisor to
TKO. Latham & Watkins LLP is serving as legal advisor to
Endeavor. Moelis & Company LLC is serving as financial advisor
to the special committee and Skadden, Arps, Slate, Meagher &
Flom LLP as legal advisor to the special committee.
CAPITAL RETURN PROGRAM
TKO will determine at its discretion the timing and the amount
of any repurchases based on its evaluation of market conditions,
share price, and other factors. Repurchases under the share
repurchase program may be made in the open market, in privately
negotiated transactions or otherwise, and TKO is not obligated to
acquire any particular amount under the share repurchase program.
The share repurchase program has no expiration, is expected to be
completed within approximately three to four years and may be
modified, suspended, or discontinued at any time.
TKO’s dividend will be paid quarterly to TKO’s Class A common
shareholders. TKO intends to begin making quarterly cash dividend
payments on March 31, 2025. Future declarations of quarterly
dividends are subject to the determination and discretion of TKO
based on its consideration of various factors, such as its results
of operations, financial condition, market conditions, earnings,
cash flow requirements, restrictions in its debt agreements and
legal requirements and other factors that TKO deems relevant.
The share repurchase program authorization and approval to
initiate a quarterly cash dividend program are separate from and
are not conditional upon TKO closing the acquisition of PBR, On
Location, and IMG.
Webcast
TKO will make public a recorded audio webcast at 8 a.m. ET today
to discuss this transaction and capital return program. Management
will also provide an update on TKO’s expected results for the third
quarter of 2024 and full-year guidance expectations, which will be
reported on TKO’s earnings call scheduled for Wednesday, November
6, 2024, 5 p.m. ET / 2 p.m. PT. Today’s audio webcast and the
accompanying presentation materials can be accessed at
investor.tkogrp.com. The link to the webcast, as well as a
recording, will also be available on the website after the call
concludes.
About TKO
TKO Group Holdings, Inc. (NYSE: TKO) is a premium sports and
entertainment company. TKO includes UFC, the world’s premier mixed
martial arts organization, and WWE, the recognized global leader in
sports entertainment. Together, our organizations reach more than 1
billion households in approximately 210 countries and territories,
and we organize more than 300 live events year-round, attracting
more than two million fans. TKO is majority owned by Endeavor Group
Holdings, Inc. (NYSE: EDR), a global sports and entertainment
company.
About Endeavor
Endeavor (NYSE: EDR) is a global sports and entertainment
company, home to many of the world’s most dynamic and engaging
storytellers, brands, live events, and experiences. The Endeavor
network specializes in talent representation through entertainment
agency WME; sports operations and advisory, event management, media
production and distribution, and brand licensing through IMG; live
event experiences and hospitality through On Location; full-service
marketing through global cultural marketing agency 160over90; and
sports data and technology through OpenBet. Endeavor is also the
majority owner of TKO Group Holdings (NYSE: TKO), a premium sports
and entertainment company comprising UFC and WWE.
About PBR
PBR is the world’s premier bull riding organization. More than
500 bull riders compete in more than 200 events annually across the
televised PBR Unleash The Beast tour (UTB), which features the top
bull riders in the world; the PBR Pendleton Whisky Velocity Tour
(PWVT); the PBR Touring Pro Division (TPD); and the PBR’s
international circuits in Australia, Brazil, and Canada. In 2022,
PBR launched the nationally televised PBR Team Series—eight teams
of the world’s best bull riders competing for a new championship
expanding to 10 teams in 2024—as well as the PBR Challenger Series
with more than 60 annual events nationwide. The organization’s
digital assets include PBR RidePass on Pluto TV, which is home to
Western sports. PBR is a subsidiary of Endeavor, a global sports
and entertainment company. For more information, visit PBR.com, or
follow on Facebook at Facebook.com/PBR, Twitter at Twitter.com/PBR,
and YouTube at YouTube.com/PBR.
About On Location
On Location is a global leader in premium experiential
hospitality, offering ticketing, curated guest experiences, live
event production and travel management across sports,
entertainment, fashion and culture. On Location provides unrivaled
access for corporate clients and fans looking for official,
immersive experiences at marquee events, including the Olympic and
Paralympic Games, FIFA World Cup 2026, Super Bowl, NCAA Final Four,
and more. An official partner and/or service provider to over 150
iconic rights holders, such as the IOC (Milano Cortina 2026, LA
2028), FIFA, NFL, NCAA, UFC and PGA of America, and numerous
musical artists and festivals, the company also owns and operates a
number of its own unique experiences. On Location is a subsidiary
of Endeavor, a global sports and entertainment company.
About IMG
IMG is an industry-leading global sports marketing agency,
specializing in media rights management and sales, multi-channel
content production and distribution, brand partnerships, digital
services, and events management. It powers growth of revenues,
fanbases and IP for more than 200 federations, associations,
events, and teams, including the National Football League, English
Premier League, International Olympic Committee, National Hockey
League, Major League Soccer, ATP and WTA Tours, the All England
Lawn Tennis & Croquet Club (Wimbledon), EuroLeague Basketball,
DP World Tour, and The R&A, as well as UFC, WWE, and PBR. IMG
is a subsidiary of Endeavor, a global sports and entertainment
company.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. TKO intends 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, and
Section 21E of the Securities Exchange Act of 1934, as amended. All
statements in this press release that do not relate to matters of
historical fact should be considered forward-looking statements,
including, without limitation, statements regarding the acquisition
transaction, including the anticipated timing for its closing, the
expected impacts and benefits therefrom, and the expected share
ownership of TKO following its consummation, and expectations
regarding TKO’s capital return program, including the purchases
under and completion of the share repurchase program and TKO’s
dividend program, including the expected timing and amount of
dividends thereunder. The words “believe,” “may,” “will,”
“estimate,” “potential,” “continue,” “anticipate,” “intend,”
“expect,” “could,” “contemplates,” “would,” “project,” “plan,”
“target,” and similar expressions are intended to identify
forward-looking statements, though not all forward-looking
statements use these words or expressions. Any such forward-looking
statement represents management’s expectations as of the date of
this filing. These statements are neither promises nor guarantees
and involve known and unknown risks, uncertainties and other
important factors that may cause actual results, performance or
achievements to be materially different from what is expressed or
implied by the forward-looking statements, including, but not
limited to: the risk that the transaction may not be completed in a
timely manner or at all, which may adversely affect TKO’s
businesses and the price of its securities; uncertainties as to the
timing of the consummation of the transaction and the possibility
that any or all of the various conditions to the consummation of
the transaction may not be satisfied or waived; the occurrence of
any event, change or other circumstance that could give rise to the
termination of the transaction agreement and the transaction; the
effect of the announcement, pendency or completion of the
transaction on TKO’s business relationships, operating results, and
business generally; the transaction may involve unexpected costs,
liabilities and/or delays; TKO’s businesses may suffer as a result
of uncertainty surrounding the transaction and disruptions of
management’s attention due to the transaction; the risk that
integration of the transferred businesses post-closing may not
occur as anticipated; unfavorable outcome of legal proceedings that
may be instituted against TKO following the announcement of the
transaction; the risk that TKO’s stock price may decline following
the announcement of the transaction; and risks related to the
capital return program. These and other important factors discussed
in Part I, Item 1A “Risk Factors” in TKO’s Annual Report on Form
10-K for the fiscal year ended December 31, 2023, as any such
factors may be updated from time to time in TKO’s other filings
with the Securities and Exchange Commission could cause actual
results to differ materially from those indicated by the
forward-looking statements contained in this press release.
Forward-looking statements speak only as of the date they are made
and, except as may be required under applicable law, TKO undertakes
no obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or
otherwise.
Website Disclosure
Investors and others should note that TKO announces material
financial and operational information to its investors using press
releases, SEC filings and public conference calls and webcasts, as
well as its Investor Relations site at investor.tkogrp.com. TKO may
also use its website as a distribution channel of its material
information. In addition, you may automatically receive email
alerts and other information about TKO, UFC and WWE when you enroll
your email address by visiting the “Investor Email Alerts” option
under the Resources tab on investor.tkogrp.com.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241023465779/en/
TKO Investors: Seth Zaslow
szaslow@tkogrp.com Media: tko@brunswickgroup.com
Endeavor Investors:
investor@endeavorco.com Media: press@endeavorco.com
Endeavor (NYSE:EDR)
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