Endeavor Group Holdings Inc (EDR) 2022 Q4 法說會逐字稿

Good afternoon. Thank you for attending today's Endeavor Full Year and Fourth Quarter 2022 Results Conference Call. My name is Alicia, and I'll be your moderator for today's call. (Operator Instructions)

I would now like to pass the conference over to your host, James Marsh, Head of Investor Relations with Endeavor.

Good afternoon, and welcome to Endeavour's Fourth Quarter and Full Year 2022 Earnings Call. A short while ago, we issued a press release, which you can review on our Investor Relations website, investor.endeavorco.com. A recording of this call will also be available via that site for at least 30 days. Today, you will hear from Endeavour's CEO, Ari Emanuel; and CFO, Jason Lublin, before we open for questions.

The purpose of this call is to provide you with the information regarding our fourth quarter and full year 2022 performance, in addition to our financial outlook for 2023. I do want to remind everyone that the information discussed will include forward-looking statements and/or projections that involve risks, uncertainties and assumptions, as well as described in the Risk Factors section of our filings with the Securities and Exchange Commission including our 10-Qs and 10-K. If these risks or uncertainties ever materialize or any assumptions prove incorrect, our results may differ materially from those expressed or implied by such forward-looking statements and projections. Forward-looking statements speak only as of the date they were made and we undertake no obligation to update them publicly in light of new information or future events, except as legally required.

Our commentary today will also include non-GAAP financial measures, which we believe provide an additional tool for investors to use in evaluating ongoing operating results and trends. These measures should not be considered in isolation from, or as a substitute for financial information prepared in accordance with GAAP. Reconciliations between GAAP and non-GAAP metrics for our reported results can be found in our press release issued today, as well as in the non-GAAP financial information posted on our IR website.

With that, I will turn it over to our CEO, Ari Emanuel.

Thanks, James. Closing out our first full year as a public company, we are encouraged by our performance in 2022. We saw strong growth across our segments. Our business has proven resilient, despite ongoing macroeconomic headwinds. We continue to execute on our long-term strategy, and as 2023 comes into focus, the IP, content, talent experiences, and brands that tap into the Endeavor flywheel are more valuable than ever.

At Endeavor, we have built a global sports and entertainment company, unlike any other. We own valuable sports IP. We supply content to a robust group of media, tech, and streaming platforms, all of which continue investing in premium sports and entertainment content to attract customers and keep them engaged. We help the leading talent and brands we represent, commercialize their art, expand their reach, and tell their stories. Our diverse live events and experiences portfolio continues to capitalize on consumer demand for unique dynamic ways to engage with the sports and cultural experiences they love. And in 2022, we enhanced our betting technology offering to better serve the global sports betting industry.

The strength and consistency of our financial performance is a direct result of our unique portfolio, which provides multiple lanes for growth and helps insulate us from volatility in any one area. As just one example, revenue from WME's 3 largest SVOD buyers in the aggregate represented only approximately 2% of overall company revenue in 2022. We remain well positioned, even as distributors' strategies evolve.

Today, I'll spend a few minutes sharing how we have delivered shareholder value, in line with our stated goals for the year. Then I'll turn it over to Jason, who will share more details on our results for the fourth quarter and full year 2022. He will also discuss our outlook for 2023.

Reflecting on last year, we grew both revenue and profitability by double-digits in our Owned Sports Properties segment. Years ago, we made the strategic decision to move further into ownership of events and premium IP that can benefit from the Endeavor flywheel. Our businesses, including UFC and PBR are proving the model. Both organizations recorded record revenue last year. All 21 UFC events with live audiences sold out continuing a 29-event sell-out streak since returning from the pandemic. UFC posted its best sponsorship year ever in 2022, unlocking new categories and inventory to reach a fan base that grew double digits over 2021 in the U.S.

It also continues to be an industry leader in digital engagement. UFC's social media accounts now have more than 220 million followers combined. TikTok followers alone grew 55% year-over-year. And Professional Bull Riders' newly launched Team Series finished a strong first season drawing nearly 200,000 attendees and delivering record setting attendance in multiple markets. Given its early success, we are planning to expand from 8 to 10 teams this year. We anticipate selling those 2 additional teams at a starting price of $20 million each.

In our representation segment, WME delivered solid financial results with growth from bookings across virtually all the mediums we touch. We secured key talent deals for more than 310 scripted series on broadcast cable and streaming channels, and our clients wrote and/or directed 5 of the top 10 films at the domestic box office. Beyond TV and film, WME closed deals for more than 200 new books, including 57 New York Times bestsellers and signed deals for 300 books to be adapted into movies and TV shows.

Our music team booked more than 40,000 engagements in 2022, and our comedy touring segment also had a huge year, with Bill Burr at Fenway Park becoming the highest grossing solo stand-up comedy show of all time. WME Sports continues to make its mark representing the world's leading tennis players and delivering some of 2022's biggest sports broadcasting deals. The rise of WME sports is clear to the market. The agency jumped up 10 spots in Forbes' most valuable sports agency list.

Our Events Experiences and Rights segment also saw strong revenue and profitability growth in 2022. One of our premier events, Hyde Park Winter Wonderland celebrated its 15th anniversary by breaking its consumer revenue record up double-digits over 2021. 2022 also marked On Location, single largest hospitality event of all time with Super Bowl 56, and the Madrid Open hosted a record 300,000 attendees in its first year, as part of our portfolio.

We also continue to benefit from continued competition for domestic and international sports media rights. Ampere's latest data shows the global market for streaming sports rights will rise 64% in 2023 to $8.5 billion. In 2022, IMG Media advised the Big 10 conference on deals worth more than $8 billion over 7 years, and closed new Euro League deals with significant increases in key markets, including France and Germany. We also helped deliver a record-breaking set of deals for Cricket South Africa, as well as multiple new sizable deals for UFC, Wimbledon, and the Big 12 conference among others.

2022 was also a standout year for our IMG Academy business, where we had record enrollment across the boarding school, summer camps, and online college recruiting services, further establishing its position as a leading sports and education brand. We also strengthened our sports betting and data offering, closing our acquisition of OpenBet, a leading business to business sports betting technology company. Paired with our IMG Arena business, we're now able to offer a true end-to-end solution for sports books and rightsholders, creating complimentary offerings that enhance demand and engagement. With this business built out, we've created a fourth segment, sports data and technology.

On the balance sheet, we continue to execute with financial prudence. We promised last year we would get our net leverage below 4x by year end. We delivered on that promise closing out '22, having paid down $0.5 billion of debt, and we will continue to pay down debt in 2023.

Looking ahead, we believe in the strength of our portfolio and the durability of our long-term strategy. We are focused on owning, managing, and operating the best sports and entertainment assets in this experienced economy. Our unique flywheel, capabilities, and insights position us as a first mover in identifying trends, making connections across our ecosystem of talent, brands and assets, and generating growth opportunities, while diligently managing our capital. This puts us in a great position to continue delivering on our strategy in 2023.

With that, I'll hand it over to Jason to talk more about the fourth quarter and the full year 2022, as well as our outlook for 2023.

Thanks, Ari, and good afternoon, everyone. I'll start by walking you through our financial results for the fourth quarter and full year. I'll also provide you with some color around what we're seeing in each of our operating segments, any comparisons be it annually or quarterly will be in reference to the COVID-impacted prior year of 2021.

For the quarter ended December 31st, 2022, we generated $1.26 billion in consolidated revenue, down $245.1 million or 16%. The fourth quarter of the prior year included $332.8 million of revenues from the restricted Endeavor content business, which we sold in January of 2022. Excluding revenues related to this business, consolidated revenues would've been up $87.7 million or 7%.

Adjusted EBITDA for the fourth quarter was $239.6 million, up $10.2 million or 4%. The fourth quarter of the prior year included $4.3 million of adjusted EBITDA from the restricted Endeavor content business, as well as the benefit of $26.1 million of insurance recoveries, related to events from earlier in the year as well as 2020.

For the full year revenue was $5.268 billion, up $190.4 million year-over-year or 4%, and adjusted EBITDA was $1.164 billion, up $283.2 million year-over-year, or 32%. The prior year included $737.4 million of revenue and $13.3 million of adjusted EBITDA from the restricted Endeavor content business. Excluding revenues related to that business, consolidated revenues would've been up $927.8 million or 21%.

Before I get to our net results for the quarter and full year, I want to set a moment on our tax receivable agreement. As you may recall, the TRA has previously been disclosed in our SEC filings and generally requires us to pay TRA holders who are primarily pre-IPO investors, for certain tax benefits they transferred to the company. Prior to the fourth quarter, we had not met the required accounting criteria to report certain deferred tax benefits or the associated TRA liability and had maintained evaluation allowance against these benefits.

As of year-end, we met the required criteria to release this allowance, and in the fourth quarter, we recorded deferred tax benefits of $746 million associated with our TRA and a TRA expense of $812 million. We expect future TRA exchanges to primarily be recorded through equity, now that the evaluation allowance has been released. In addition, as indicated in our 10-K, we expect TRA payments to be made primarily over 15 years.

Now moving to our net results, the fourth quarter had a net loss of $225.7 million compared to a net loss of $16.7 million a year ago. Our net loss for the quarter is driven by the net impact of the tax benefits and associated TRA expense just discussed, as well as losses from affiliates.

For the year, net income was $321.7 million compared to a net loss of $467.5 million a year ago. This change in net income was largely driven by the improvements in operating income and the gain from the sale of our restricted Endeavor content business, which was partially offset by the net impact of the tax benefits and associated TRA expenses.

This year's results also include greater losses from affiliates as compared to the prior year. For the full year, we generated free cash flow of $355 million, defined as cash from operating activities less CapEx. The difference between our reported free cash flow and our forecast, was primarily driven by the timing of cash payments and collections, related to On Location to IOC business. Our IOC initiative remains on track.

Now, I'll walk you through each of our segments. Our Owned Sports Properties segment generated revenue of $301.4 million in the fourth quarter, up $24.1 million or 9%, while the segment's adjusted EBITDA for the quarter was $142.4 million, up $17.3 million or 14%. On the year, the segment generated $1.3 billion in revenue, up $224.1 million or 20%, and $648.2 million of adjusted EBITDA, up $110.5 million or 21%.

Looking back on 2022, UFC set 11 arena records for highest grossing events, including 4 of the highest grossing fight nights in the U.S. and the 2 highest grossing fight nights in UFC's history, both at London's O2 Arena.

Over the course of the year, we renewed 10 international media rights deals. Our aggregate AAV remains in excess of 100% over prior deals, since we began tracking in Q2 of 2021. UFC also had its highest sponsorship sales in the company's history. We added several new sponsors to our roster like lake VeChain, New Amsterdam Vodka, and Project Rock. We also introduced new categories like the official Electric Commercial Truck, the Official Law Firm, and the Official Ready To Drink partners of the UFC. Beyond new sponsors, we're leveraging the technology of 4D sites to digitally create more inventory in and around the Octagon. 2022 was also the UFC's best year for consumer product sales, most notably within the video game, trading card, and NFT categories.

Moving to PBR, we successfully launched the Team Series selling all 8 of our team sanctions. PBR also signed Stillhouse Vodka, ZipRecruiter, MGM, and the Las Vegas Convention and Visitors Authority, as Team Series sponsors. Over the course of the year, we saw over 1 million combined fans attend our Unleash the Beast, Pendleton Whiskey Velocity Tour and Team Series events.

Now turning to events, experiences, and rights. The segment recorded revenue of $557.7 million in the quarter, up $41 million or 8%, and adjusted EBITDA $52.4 million, down $2.4 million or 4%. On the year, segment revenue was $2.5 million, up $420.7 million or 21%, and adjusted EBITDA was $342.6 million, up $127.1 million or 59%. Segment revenue and adjusted EBITDA growth in the year was driven by heightened consumer demand and lifted restriction for live events in premium experiences, such as the Miami Open, Super Bowl 56, and the NCAA March Madness Games, as well as the inclusion of the Madrid Open and OpenBet.

Additionally, we saw increased boarding school and summer camp enrollment at IMG Academy and a full year contribution from our NCSA Collegiate Athletic Recruiting network. Growth was partially offset by the expiration of certain previously [disclosed] media contracts that were not renewed.

Moving on to our representation segment, revenue the quarter was $408.5 million, a decrease of $309.4 million or 43%. Fourth quarter 2021 included $332.8 million of revenue from the restricted Endeavor content business. Excluding that, segment revenue would've been up $23.4 million or 6%. Segment adjusted EBITDA in the quarter was $123.9 million, up $5.5 million or 5%. Fourth quarter 2021 included $4.3 million of adjusted EBITDA from the restricted Endeavor content business. Excluding that, adjusted EBITDA would've increased $9.8 million or 9%.

For the full year, representation segment revenue was $1.5 billion, down $447.6 million or 23% and adjusted EBITDA was $469.8 million, up $86.4 million or 23%. The prior year included $737.4 million of revenue and $13.3 million of adjusted EBITDA from the restricted Endeavor content business. Excluding that, segment revenues would've been up $289.8 million or 24%, and segment adjusted EBITDA would've been up $99.7 million, or nearly 27%.

Growth in this segment was driven by our core agency business, primarily from the demand for premium content and the continued recovery of live entertainment, such as music and comedy touring. Additionally, our 160over90 marketing business saw increased spend from corporate clients, specifically from experiential partnership and advertising services.

Before I share our outlook for 2023, I want to give an update on our capital structure. We ended the year with $5.2 billion in debt and $767.8 million in cash, resulting in $4.4 billion in net debt. At year end, our net leverage was approximately 3.83 times. Our aggregate fixed rate debt is now approximately 43% of our outstanding total debt. As a result of our operating performance and voluntary debt paydown of roughly $500 million, S&P global ratings recently raised our issuer credit rating to B+. We plan to continue delevering through growth and adjusted EBITDA, free cash flow generation, and we'll make additional voluntary debt repayments in the year.

And finally, I'd like to share our current outlook for 2023. I'll first discuss our guidance on a consolidated basis and then provide some additional detail by segment. As we've said previously, we believe our company's results are best evaluated on a full year basis, given quarterly fluctuations related to the timing of events, content deliveries, sales cycles within our media and gaming businesses, as well as business transactions on behalf of our clients and brands.

We expect consolidated revenue for the year to be between $5.825 billion and $5.975 billion or 12% growth at the midpoint of the range. On adjusted EBITDA, we are expecting a range of $1.25 billion to $1.305 billion or 10% growth at the midpoint of the range, implying approximately 22% margin on the year. We expect free cash flow between $545 million to $605 million or a midpoint of $575 million, representing 62% growth over last year.

Now let me provide you with some color on our 2023 guidance by segment. Starting with our owned sports properties segment, we expect continued growth at UFC and PBR, offset by the sale of Diamond Baseball Holdings. At UFC, we anticipate the same total number of events, but with more U.S. events outside of our Apex arena. More international events and overall, more marquee events, all of which carry a higher cost structure. This in-turn impacts margins, but bringing UFC close to our global fan base remains a major strategic priority for our growth.

We also expect to have high margin site feeds for 3 to 4 of our live events, and accelerating line item with strong growth potential. We are excited to be returning to London's O2 Arena in March. We are headed to Miami in April and we have announced our new season of the Ultimate Fighter, concluding with an expected match-up between, Conor McGregor and Michael Chandler. Additionally, we are continuing to invest in the sports growth with a new Performance Institute in Mexico.

At PBR, we expect continued momentum with a full year slate of events from our Unleash the Beast and Pendleton Whiskey Velocity Tours, as well as the second year of our Team Series. We also expect growth in all aspects of the business, most notably live event revenue.

For Events, Experiences & Rights, we expect continued segment revenue growth, driven by live events and experiences, sports production, the return of the biennial Ryder Cup, and a full year with Barrett-Jackson.

Segment profit growth will continue to be impacted by our ongoing investments and On Location to IOC initiative. We are continuing to build our sales, marketing and ticketing technology functions, to ensure we deliver a premium experience for our customers. We anticipate a multiple 9 figure profit opportunities across the 3 upcoming Olympic Games.

In our representation segment, we expect growth across all our businesses, led by WME as we expect continued demand for premium content, including sports, music and fashion. We also expect strong revenue growth from our non-scripted business, driven by increased demand and timing of project deliveries. In connection with our first quarter 2023 earnings, we will be reporting our new sports data and technology segment, which will include our IMG Arena business and the recently acquired OpenBet.

At the time of the announced acquisition, we provided full year 2022 revenue projections of $340 million for the combined businesses. For 2023, we expect double-digit top line growth of those initial projections. We also expect revenue and adjusted EBITDA to be back-end loaded, and to build largely sequentially as the year progresses. We expect Q1 to be the smallest due to seasonality and cadence of the sports [fee service] and timing of client renewals.

We continue to show resiliency in the face of an uncertain macro environment. As we look ahead, we remain confident in our ability to continue executing on our strategy.

With that, I will hand it back to James for Q&A.

Thanks Jason. Alicia, can we open it up for questions please?

(Operator Instructions). First question comes from the line of Ben Swinburne with Morgan Stanley.

Ari, maybe I'd love to get your thoughts on the representation outlook in a little more detail. Your guidance for '23 double-digit top line certainly suggests you expect another year of growth at WME in particular. And I wanted you to get you to talk a little about the drivers of that growth, the visibility into that growth, and your confidence in that growth. Just given, we've been to another earnings season, where all we hear about is sort of content spending coming down across the big streamers. Tell us a little bit more about why your business continues to do as well as it's doing in that backdrop? And then I had a quick follow up for Jason on the balance sheet.

Okay. I think, kind of there's 2 questions there. What do you see for the industry, and how do you see the impact on our business at Endeavor? We continue to see steady demand for premium sports and entertainment content. Some spending more, some spending less, strategies change, but we're well positioned. If you look at the resurgence of theatrical, and I know you're not going to believe this Ben, but I actually did read your earlier report. You talked about the rebound in the theatrical segment, and you're talking about a 20%, 25% outpacing '23 -- '23 outpacing '22. The SVODs service are expected to increase their spend on sports rights by 64% in '23 compared to last year.

And Jason will go into the diversification of the company and the platform, but we see no slowdown, as it's kind of moving around. Everybody has a different strategy in their spend.

Yes. Ben, I would just add that, over 50% of the agency revenue comes from non -- what's called TV and film business. We've seen continued strength, Q4 '22 was bigger than Q4 '21 for our talent and motion picture business. We continue to find represent increasing -- a wider breadth of increasing types of talent and types of content as well. And every year, we continue to increase our backends, and that's our back ends through books, that's our back ends through theater, TV, and film as well. So we feel we're well diversified right now.

That's great. And Jason, as the leverage came down faster than at least we were expecting in Q4, it was a strong cash flow quarter. And thank you for the free cash flow guidance for '23. What are you thinking for interest expense, just given where rates are, and why not pay down more debt? You're carrying a lot of cash. I don't know if you need to carry, $700 million of cash. I know, you're getting ready for the Olympics and everything, which is a lot of working capital. That's still a ways out. Just any thoughts on paying down debt more quickly?

Yes, no problem. Look, as Ari said in his prepared remarks, and I do too. We are committed to paying down more debt. We do have $767 million plus of cash on the balance sheet, as you pointed out, we are expecting really good free cash flow generation, $575 million at the midpoint. So it's certainly on our agenda and it's something we're going to get to in 2023. As far as interest expense goes, we are budgeting interest expense to be up over '22 based on rates. Obviously, that'll be impacted to some degree, and [wondering] how much debt we paid down as well.

The next question comes from the line of Jessica Reif Ehrlich with Bank of America.

I have 2 questions. The first 1 is On Location or -- look, could you just talk about where you see this business going over time? Like obviously, this year is year of investment, and then next year is the Olympics, which should be a good year for you. What does this look like at maturity? What do you think your margins and what kind of revenue growth can you have? And then I have a separate question.

All right, I'll do the front end of that and maybe, Jason can go into the margins, et cetera, Jessica. So we acquired the On Location business in 2020, given the pandemic, '22 is really our first year to realize our growth ambitions. I think we've developed a unique product for the consumer. There's high end demand for tailored experiences. The TAM in that, and the experience economy is pretty high right now.

We've added several different offerings. The WWE is one, March Madness Games is another, the IOC. We've also incorporated a bunch of our own assets, which is UFC, Barrett-Jackson, the property we just bought. The Madrid Open, which is our tennis tournament in Spain, Miami Open and [Breeze]. And if you just kind of think about it, our Super Bowl packages for -- the Super Bowl packages in California upwards -- some of the packages were going for a $100,000 each. UFC 281 packages were going up -- were upwards of $50,000. And well we intend to replicate that model for some of our other marquee events. With that -- as Jason stated, there are multiple 9 figure deal for our opportunity in the 3 Olympic games. So we feel very good about that, and we are constantly on the lookout for other major properties that we can add to the portfolio.

And with that, I'll give Jason to talk about the kind of...

The only other thing I would add from a margin perspective, we certainly see this business in line with the margin for the overall EE&R segment on a normalized basis.

And then just, Ari, could you comment on your views on potential work [stoppage]? And why did you put, like, what was the benefit of using Speechify for your opening comments?

So that -- you said you were going to ask 1 question? That was 2 questions, but I'll start...

It was 2, a sneaky 2.

I know, it was a sneaky 2. So, here's what I would say to you. On the strike level, there's important issues on both sides here. We support our clients as they work through the issues with the studios. There's a date, I think on March 20 that the Studios and the Writers Guild are meeting. Hopefully they'll solve and resolve their issues. And then through many strikes before, compared to last time, this one's very different and our company is very different.

So I think we're pretty well positioned, as it relates to the strike. I don't -- if the strike is going to happen, it's probably going to be somewhere later in the year. Have no idea how long it's going to last. But we have a lot of, as Jason said, a great deal of our percentage of our economics comes outside of the writing directing business, whether that be lectures, books, sports, theatrical fashion, et cetera. So, I think we're differently positioned from others if there is going to be a strike.

And Speechify, we've been in business with them. We thought with all the conversation around AI, it was pretty interesting. We're in business with them. We think they're a really good company. We thought it was a proper time to kind of put this into our quarter and for you guys to hear what it's like.

The next question comes from the line of John Hodulik with UBS.

Just a quick question on the M&A environment, especially now that you guys are down below 4x? Does it make you guys sort of think more aggressively about potential acquisitions? And then obviously, the big one out there seems to be WWE. Just any initial thoughts or how you got -- some commentary on how you look at that entity, and any comments on -- it looks like Vince thinks it's worth $9 billion. Just any thoughts or color you can provide there would be great?

One is we don't -- unless you want me to go to jail, we don't comment on our M&A practices. But here's what I would say to you, we are truly focused as Jason said on de-levering. We are not going to do anything that would increase our leverage at this point in time. I would just say as it relates, we constantly are looking at things out there, but we are not going to leverage ourselves up, as we have done a good job deleveraging, we are going to continue deleverage.

As it relates to the WWE, it's an unbelievable product. Vince is an unbelievable -- created a great business. We have had a long-standing relationship with them over 2 decades. We're doing, as I indicated, On Location business with them, Endeavor Streaming business with them. So his business is really valuable, but we are not going to do anything, as it relates to kind of changing our leverage position right now.

So, Jason, I don't know if you have any other comments.

Yes, I would just add, given we have over $750 million of cash in the balance sheet and projecting a really good cash flow generation this year, that we certainly feel we have the ability to keep executing on M&A. We are an acquisitive company. But using our cash and our public equity as deal closing currency, in order to execute on our strategies and still remain some 4x. And as Ari said and I said, we're committed continuing to deleverage and we will view all this opportunity through capital allocation, and the best use of capital for the company to create the most shareholder value.

The next question comes from the line of Kutgun Maral with RBC Capital.

I want to ask about your views on the Endeavor portfolio and also had a question on Representation. So first, big believers on the Endeavor story, continue to see a significant gap between the stock price and intrinsic value of the company and each of its businesses. Clearly, it's a challenged backdrop because of investor concerns over the macro environment, but how would you characterize your patience level in waiting to have the market better appreciate the story and flywheel? And is there any appetite to perhaps consider separating from the businesses to crystallize value quicker like the UFC? And then I had a follow-up question on Representation?

So, I was on the Board of Live Nation when it was $200, I'm really patient. And we have now just created a fourth segment. We are breaking out in EE&R kind of our 15 big events for the year. I think you guys are just understanding all of our different segments. We are trying to get you more clarity. We are really patient, we're long-term. I believe that you guys are going to realize the value of each of our segments as time goes on. It's only been 1 year.

So, we feel good about our businesses. I don't think you guys realize the value of Endeavor content, and we sold it for $1 billion. I think you guys want to do some more work, and we help you in that way. You'll realize the value of all of our different segments, and we're really patient about it. We're going to continue to pay down debt, we're going to continue to grow those businesses as we have been growing those businesses. And I think we're uniquely positioned on the supply side of the business, for where the business is going, and we're very diversified.

I would just add, as Ari said, really our first full year operating as a public company in the backdrop of a tough macroeconomic environment. We're putting a guide out double-digit revenue growth, double digit EBITDA growth for 2023. And we're really just focused on continuing to operate the business and operating the business and making the right decisions for the business over the long term.

Yes. That's great. And I had another question on the Representation business and was hoping you could help unpack that segment a bit. I assume the core agency business is about maybe 2/3 of the segment followed by market and licensing. Jason, if I heard you correctly earlier, you mentioned that 50% of the agency business revenue comes from non-TV and film. I assume that's perhaps across fashion, sports, comedy and music, but I'm not sure. We on the outside might have a view on the industry content spend environment overall, but maybe we're a little bit less clear on what the growth trajectory of the rest of the 50% of the business looks like. So, any color there would be appreciated?

We're not going to give sub segment information as far as what the breakout of the revenue is, but we have stated before that, it is the biggest, biggest part of the Representation business. And the agency is very diversified. You have TV, film, tour, music, books, theater, lectures, et cetera. So we're getting -- we're seeing growth in all segments of our Representation business. I mean, and quite frankly accelerated growth in some segments outside of TV and film as well. So we feel really good where we sit in the space and the diversification of the platform.

The next question comes on the line of Tom Champion with Piper Sandler.

Appreciate the color on UFC into next year. It sounds like maybe there's a margin headwind, but just curious if there's a way to think about top line growth over the next year or 2, up until the renewal period and the key drivers of that growth, whether that be events, sponsorships, the key drivers there. Maybe a second question, if I can, 2 quarters removed from the close of OpenBet's acquisition. Just curious, any early learnings there or other synergies you're finding in the business?

So, on the UFC, we went from -- I'll just give you some headlines. We went from 8 figures to 9 figures. There's still more on the sponsorship side we can do. International sales, I think, as Jason mentioned in his open remarks, we're up over a 100%. I'm not commenting on the domestic deal. We've had 29 sellouts in a row we're doing great yield management on our ticket sales. We've just added on location.

Our licensing business is going exceedingly well. We've sold Fight Pass and Ultimate Fighter. Also remember we have the commercial pay-per-view rights in the United States, and we have the pay-per-view rights internationally with Fight Pass. So there's a lot of driver there that have continued upside for the business, without even discussing the domestic deal. And what was the second question?

That's helpful. just curious, any questions -- OpenBet's early learnings, just any comments there?

Yes. Look, I mean, new acquisition for us, we closed in Q4, so stole it very early in the integration phase, but very happy with what we've seen so far. We previously gave revenue guidance for '22 of roughly $340 million. We're expecting double digit growth on that, of the combined entity in the new sector going forward. So it's early, but from what we see, we're very happy with what's going on in that entity, and where we were going to go on revenue synergies and margin expansion over time.

The next question comes from the line of Stephen Laszczyk with Goldman Sachs.

Could you just talk a little bit more about some of the recent trends you're seeing on the events side of the business? As we start to think ahead to maybe the middle and back part to the 2023 slate? How have ticket sales has been trending, how has pricing trended for some repeat events that you're comping last year? And have you seen any pockets of moderation from the consumer thus far, that are noticeable?

I'd say, to date, we see limited impact of what we're all seeing -- what we're all reading about inflation, et cetera, and we see solid performance across the board. Whether that be, in my opening remarks, I said 300,000 people attending the Madrid Open, (inaudible) was very well done. The Super Bowl in the LA, Hyde Park Winter Wonderland, did exceedingly well, and we can continue to kind of go over. All those looks very, very good for us.

So going into the beginning of the year, our events, there was no indication that there was any slowdown in the consumer demand for experiences and to be out there. So we feel on the representation side, we've booked over 40,000 music engagements. And as I said in my remarks, there's 29 sellouts from the UFC, [NRL] and some of the high-end experiences with On Location, we are at $50,000. So right now, we're cautiously optimistic. On the consumer side, it's still very positive.

And then maybe just one on regional sports and sports media rights more broadly. I was curious to hear your latest thoughts on some of the RSNs and the extent to which some of the pressures that have been highlighted over the last year have changed your view, if at all, and the value of sports media rights. Largely in -- or the way you approach media rights -- sports media rights deals in your business?

Here's what I would say to you is that, I'm not commenting on the regional aspect of it. There was multiple bidders on Big 10, Big 12. There was multiple bidders on Wimbledon and a lot of our UFC rights internationally. So, you now have a bunch of the SVOD players getting into that space, people doing shoulder programming like Netflix. That's just on the domestic side. Internationally, one of our last deals we did for the UFC in the U.K., there were 6 bidders for our right, selling up over 100% and our IMG Media business is doing very, very well. So, the demand for live sports and those rights broadcast is in high demand.

The next question comes from the line of David Karnovsky with JPMorgan.

Just 2 on UFC. Wanted to see if you could update on Fight Pass in Brazil and the reception to the launch there around UFC 203 in Rio? And then you noted staging more events internationally, but I think it was a negative impact to margins. So I don't know wondering if you see a path to potentially getting paid by local promoters or governments in some of these regions' kind of similar to like F1 model?

Well, whether it be Singapore, Perth, Abu Dhabi, Utah, New Jersey, we are seeing and on our Miss Universe side, we got a lot of site fees also. We have got -- we sold that business. So people are realizing the economic impact for their cities, for their countries, and we are seeing an increased volume in that and in States. So, we feel very good about that. and Brazil, we are 60 days in. Technology is working, starting to do well. We'll give you an update later in the year.

I would just add that. As Ari said, we expect probably 3 to 5 events this year to have site feeds, as you mentioned. And we always anticipated taking these events back on the road. They were in apex during COVID and a little bit post-COVID as we transition, but that is the traditional UFC model to take these events on the roads, both domestically and internationally. And we certainly believe that over time, that will pay-off in other ways through increased consumer products, licensing, media rights values and sponsorship.

The next question comes from the line of Jason Bazinet with Citi.

You guys have done so well with acquisitions over the years. I just have a very simple question. Have you guys ever done a transaction where it didn't work? And then for the transactions that you did and it did work, how would you just roughly allocate the success between, you bought an asset with good secular growth, versus synergies across all your divisions, versus just managerial acumen just running the business, better than the previous owner?

I didn't really understand the second part of the question. But listen, we are working through kind of the new line -- that M&A transaction we did wasn't perfect. And Endeavor Streaming is doing a lot better now. We built the team back up and Endeavor streaming is doing well right now. That wasn't perfect. But we have done well in our M&A. Most of it, as I've said to you is people we have been in business through the representation side or have (inaudible). So, we have a pretty good insight into where and how we think we can increase the business, save costs and close the revenue model. So, from that end, we stay to our knitting there and I think when we do that, we are very successful in that.

The only thing I would add to that, we do -- are able to get revenue and cost synergies, which not everyone can on both sides. So it has really helped us to execute and be successful in our M&A strategy, both on the -- (inaudible) revenue synergies, as well as cost synergies.

There are no further questions registered, so I will pass the conference back to management team.

Great. I want to thank everyone for joining us tonight. If you have any follow up questions, feel free to reach out. Thank you very much.

That concludes today's conference call. Thank you for your participation. You may now disconnect your line.