All right, we'll get started. Happy to have back at the conference from TKO Group, Mark Shapiro, President and COO. Mark, thanks so much for being back here.
Thanks for having me, David.
Okay. Mark, earlier this year, you termed 2026 as a year of execution. In that context, can you speak to where your highest priorities are at the moment?
Yeah, I think just consistent with what we've said on our, on our earnings and our forecast and guidance coming into the year, this is a high-quality execution story. We are singularly focused on operational execution, and we've got a full plate. Not too much, but we have a certainly a full menu of offerings that we are uniquely focused on as we head into the midpoint of our year. First and foremost is, of course, our distribution deals is, I think as most know, we have our second year of our deal with Raw, with Netflix. We have our WWE PLEs now with ESPN, and obviously, we've kicked off a successful partnership, initially successful with UFC and Zuffa Boxing with Paramount+ and the myriad of offerings across the CBS, PSKY platforms.
Distribution, making sure that that's, you know, hitting on all cylinders, production quality, the marketing behind that, the earned media that we gain from the potpourri of platforms that PSKY has, engagement, making sure the cards are up to standard and getting the draws that we would hope they would, the marketing power ESPN brings to the table, making certain we're maximizing that. You go to global partnerships next. I think we've given guidance of to 2030 that we would do $1.2 billion. By the way, a contributor to that is some of the ad inventory we will soon be selling related to the PSKY deal, and other offerings, but specifically, that will be a big bellwether for us.
We're feeling good about that, trying to surround ourselves with the right brands and the right earned media vis-a-vis the marketing power those brands bring to the table. Third would be live events. I'll tell you, David, even at earnings time, a lot of question, rightly so, but a lot of question, given what's going on in the Middle East and just around the world at would we see a fall off? Would we see a tick back, if you will? We're seeing no consumer pullback whatsoever. In fact, just post our earnings, our UFC 328, which was in New Jersey, not only sold out, but this was the third straight year, so it wasn't like it was new to the party. It wasn't a big, new glitzy event.
The third year, we had a UFC numbered event in New Jersey, and we set the record at the gate. That just gives you an idea how strong and robust it has been, and we're thrilled to see that. That dovetails with our FIP strategy, our financial incentive package strategy, which again, on the guidance, we've said we'll do $380 million-$420 million by 2030. This year, we're doing a little over $300 million, but we have three-
Yeah
WWE events are normalized. It would be $240 million. All systems go on that front. We can talk about that strategy certainly later. As you move around the rest of the business at TKO, Zuffa Boxing is a big growth opportunity for us, an organic growth opportunity. We're in line with our plan. We're in line with our forecast. It's already profitable, albeit we don't consolidate, largely because we've done two big media deals, one with Paramount for the boxing, of course, with Sky as well. Boxing is off and running, Dana White is signing a whole bunch of fighters. On the allocation front, you know, the experiential business is still very strong right now. We've got the World Cup just about upon us here.
Yeah.
Despite what's going on overseas and a little bit of anti-American sentiment, we're ahead of plan there. We've already guided to approximately $75 million in EBITDA for that, our World Cup event, and we're on track for that. I would tell you, the L.A. Olympics, I mean, these are, this will be his going- out party, meaning President Trump, but they are, we're really bullish about the opportunity there. I mean, we're over $250 million right now at this point already in hospitality, experiential hospitality sales packages, and we're two years away. Finally, UFC 250, June 14th at the White House, all eyes upon that, and really everybody we have across the board is working on putting that together.
Yeah. Mark, that was a great overview. We're gonna get into a lot of that. Maybe I'll start with this. I asked you a version of this question a year ago. When you look at WWE and UFC at the current moment, how do you gauge the properties on factors like fan engagement, star power, cultural resonance, and how much higher do you see the ceiling for their popularity both in the U.S. and abroad?
Yeah, good question 'cause engagement is very much the name of the game, for certainly for us, but I would argue for any content property out there. Of course, it's a clouded environment, and it's very fragmented. Look, for us, we sit squarely at the center of sports and entertainment and that overall ecosystem. That's where we are. We stand out because we're year-round. We happen to own the league. You're not going through a lot of webs to get decisions made or to innovate. We're scalable, we're global, we're young, we're diverse. We have high engagement, which builds over the course of the night across our cards, and we're always building. We don't rest on our laurels. We don't rely on past champions. We're always building new stars.
In fact, in the WWE, we've actually added some cards for NXT because we think we have a couple of stars that are about to pop, and we wanna give them more stage time, if you will. I would also tell you that at TKO, we institutionalize events built on scarcity and durable repricing power. I would say, finally, when you just overall look at where content is, experiences, events, and folks that are lining up, consumers that are lining up to see them, AI is here and now, right?
Yeah.
As the adoption of AI further increases, what you will see initially is a real boost in digital, I would say solo digital consumption. As that progresses, ultimately, that will strengthen the need and strengthen the demand for physical aggregation, which is consumers, families, fans that want to get out. They're inside the room all day. They're on a screen. They're working. They're also more efficient, and when they have that opportunity to now get out into what is an extended weekend, they're going to jump on it. That's why you see today, even in this economy with the affordability crunch and what's going on from a geopolitical perspective, retail sales are strong, and not just with us. You saw with Live Nation and The Walt Disney Company, no consumer pullback.
Just staying on the, on that macro backdrop, interesting moment, right? On the one hand, you have the conflict in the Middle East that's lifting energy prices. It's complicating events in the region. Other hand, right, all the beneficial kind of long-term trends you talked about driving the demand for experiences. How do you kind of account for those crosscurrents in your outlook?
Yeah, look, we have six events in the second half of the year across Zuffa Boxing and UFC and WWE that are in that Middle East region.
Yeah
that you're talking about. I would just tell you we're all systems go. In fact, we announced a UFC Fight Night just this morning that we're adding to Abu Dhabi. What's happening is we have, as we have our virtual meetings with our partners in Saudi and our partners in Abu Dhabi specifically, they want more events. This whole fiasco isn't over yet, nobody can really prognosticate when it's going to be over, if it's going to be over. I mean, look how long the Ukraine-Russia saga has dragged on, much longer than anybody thinks. That region in particular is very focused on showing the world they're still open for business, right? They might not be able to get a vessel out of the strait, they are open for business, they want more events. They want music.
They want comedy, and of course, headlined by they want more sports. They're bullish to put 'em on. Our Royal Rumble in January, albeit that was before the whole saga and the Iran conflict, big sellout show. We already have meaningful fan bases there, David.
Right.
They're passionate fan bases, and they've signaled to their governments that they want more, and, you know, we're first in line for many of these countries.
Great. Let's get into UFC. With Paramount's guidance, you made a big change to your domestic distribution, removing the transactional paywall for your biggest events. For certain fights, you've also extended distribution into broadcast with CBS. Mark, what's the impact of this wider reach to date, both with fans and then your various stakeholders?
We're checking all the boxes as it relates to Paramount. They have been a really superb partner, which says even more when you realize that ESPN was the greatest of great partners. Paramount has picked up on that, and they have built off of that. You saw the, obviously the Paramount earnings call and David Ellison talk about the success they're having with the UFC, not just in terms of subscriber sign-ups, acquisition, also on the retention side, and I would say most meaningfully in the ancillary program, where millions of minutes are being watched vis-à-vis the UFC, and it's our storytelling, right? It's a lot of our long-form programming, not just the fights themselves. That's a harbinger of what's to come. We're much younger than anything they put on there.
We're certainly much younger than CBS. We've benefited from the fact that they're using all of their platforms not just to market us, but if you look at CBS and the way we've popped when we've had a few of our prelims or undercard fights on the CBS platform as a simulcast. That's been a good story as well, and I will tell you, I'm really excited. I should say we're really excited by what is ahead, and that is when they close, when and if they close their Warner Bros. deal.
Sure
At this point, everything looks thumbs up, and I think it should happen, by the way. We're gonna benefit from that. We have an opportunity to have UFC and Zuffa Boxing not just on the Paramount Networks as you know them now, but TNT, which is known as a sports network, CBS, which is known as a sports network, HBO, which has historically been a big boxing network, and then you throw Bleacher Report in there.
Right.
Not to mention, if you really pay attention to what they're doing from a marketing standpoint and the way they're distributing content, they have all kinds of partnerships with YouTube. We will benefit from that as well.
Maybe following up on the numbered fights, has there been any concern from you or Dana that, you know, removing what was previously an $80 pay-per-view fee, essentially making the price of those fights equal to the price of a Fight Night? Does that remove any signal to the fan about the uniqueness of those cards?
Absolutely not.
Okay.
Like, keep in mind, when we have our, what is normally a monthly numbered event, and we have 13 a year of them, I say roughly, every month, these cards have championship fights on the card. The Fight Nights don't have championship cards. That alone signals it's something different. Also, when you look at the marketing spend and the power, the number of GRPs that they put behind marketing those numbered events, you can tell this is something different.
Right.
This is a must-see event. Not concerned about that at all, and I would just tell you that getting out of the pay-per-view business. There's a time and place for it, and it's how the UFC was built, and it made a lot of sense, and it was a big winner for many, many years. We're past that, and we want our content to be accessible to the broadest audience possible. Not having that big pay-per-view price allows us the opportunity to do just that. They see the promotion. They feel the weight of the marketing. They see the match-ups. Hopefully, they have a rooting interest, or they're just a casual fan that wants to sample. They know where to go, and they can get at a very affordable price, even in this economy.
Maybe just staying on distribution. In any given year, you have a number of your UFC international media rights coming due. Can you speak broadly to the market opportunity there and kinda how you approach selling the Fight Nights and the numbered events abroad?
Yes. International also is strong. I would tell you that, we signed China earlier this year with Migu. We actually, in the fourth quarter, we resigned Australia and New Zealand, and we're getting healthy increases, albeit much smaller dollars, David, than what we get on our domestic deals. Right now we're just about finalizing Spain, Belgium, Netherlands, and Scandinavia, with Canada on the horizon. We're seeing 40%-50% increases in the AAV on these deals. Again, smaller dollars, much smaller dollars , but nonetheless, it's a good trend.
Are you finding any particular distribution in those markets, or it's all market by market basis?
It is market by market.
Yeah.
By the way, it's not only some markets are linear still, and some are linear and digital simulcast, and some are just digital only. Streaming is what I mean to say there. At the same time, on some of these markets, we're just selling the numbered events, and in some of these markets we're just selling the Fight Nights and the library. It could be a mishmash combination. Different strokes for different folks, different checkbooks out there, different appetites. Again, you know, we're a young sport. You know, we haven't been around 100 years like Major League Baseball. We are still very much in the fan base building mode.
Got it. You touched upon this earlier, when TKO reached agreements with UFC on Paramount, and I think this applies to WWE on ESPN, a highlighted key negotiated benefit was advertising inventory for the company on live streams. Maybe can you just speak to how you're executing against that today?
We're in the process. We're actually in the latter stages of hiring, adding on, bolting onto our team experts that sell media. It's a different sell than selling sponsorship, global partnerships, even really than selling digital. We've built up our team, frankly, a lot of names from my past at ESPN, and I think some of the best in class that are out there today from a streaming perspective. We will begin to start offering packages of inventory that have, of course, signage and have, of course, integration, have broadcast integration, very different, in arena, outside the arena, retail marks, et cetera, but also include actual media. We don't wanna get in the way of Paramount, right?
Right.
They paid a lot of money, made a big investment in the UFC, and they're out there selling those packages. We're not going to compete with them, but we're working, I would say, in tandem on various categories of where we're going to sell or where they're going to sell or where we can play kind of the B train to their A locomotive.
Got it. Maybe just staying on partnerships and marketing. TKO, as you noted, has provided a goal of $1.2 billion in revenue by 2030. You ended 2025 at $475 million around there. Maybe just help bridge those two figures, how you think about the biggest opportunities, including items like new inventory, new sponsors, new categories.
Yeah, it's a mix, it will always be that. We have categories that peel off year- by- year that we renew at big increases given where we are versus where we were. Keep in mind, just on the UFC alone, we're in 170 countries, there's global opportunities as well. We also have new categories that we're finding all the time and kinda beating our chest about our creativity in finding those categories. We're also, as I mentioned with the media, we have more inventory. We have a really diverse portfolio of inventory to sell. You have some advertisers coming to the table that are just looking for digital media buys. You have some that are still looking for linear broadcast.
You have some that really want that experiential activation, and some are all of the above. I think we're benefiting, you know, on all fronts. Obviously, this is an ambitious guide to get to the $1.2 billion in 2030, we feel great about it. To your point, you know, we did approximately $475 million last year just on the UFC and WWE. Remember, the $1.2 billion is for all the TKO. $475 million just on UFC and WWE, that was ahead of our $450 million plan.
Right
that we had stated publicly.
You highlighted earlier UFC Freedom 250. That event less than four weeks away now. I guess besides the incredible image of an octagon placed on the White House lawn, what should we all be looking forward to from the weekend?
I will tell you, as I mentioned on the earnings call, we will be meaningfully higher on the spend for Q2, which is where, of course, the June 14th event takes place, and that's really due to the fact that it's just blown up. It's the festival that's going to be happening adjacent on the Ellipse has gotten bigger. Zac Brown is playing there. The whole festivalization of the event. We've added a fight to put seven on the card up from six. We'll still have what we guided to, which was a $30 million loss, which is just a one-time, but the expenses will be up meaningfully. It's going to be a show. It's Flag Day. It's the President's birthday.
He's one of the biggest not just, by the way, UFC fans. He's a major WWE fan. He's in the Hall of Fame, actually, at the WWE. You know, he's very much behind this. We're working hand in glove with the administration. We're two weeks away from being basically on site to get the build up in time for the June 14th event, we're having all kinds of client events and dinners and activations. As you can imagine, all of our global partners want to come to the event, we aim to please.
Got it.
This is a international event. I mean, this is the true event where we're going to be having news outlets cover the event, not just the sports media. It's, it should be very exciting. About 4,000 people will be there. 1,100 will be military guests, friends and family. Between us and the White House, which mainly means the White House, there will be another 2,900 guests.
For WWE and UFC, you noted earlier financial incentive payments as a growing revenue line, target of around $400 million by 2030. Maybe just expand on how you plan to develop the model and then how you weigh the offsets to the FIPs, like sometimes doing events in smaller regions.
Yeah, look, frankly, there's not a lot of science to the weight part of the question, so keep this in mind. I mean, look, you're always balancing in this business even what cities we choose to go to, even if there wasn't financial incentive packages. You're always balancing what's best for the brand, what's best to serve our current audience, what's best to grow our future audience and expand our audience, and then, of course, who's at the table with what kind of financial incentive package. I think as part of this, it's important to understand the thesis behind our financial incentive package strategy, which is pretty clear-cut.
We have premium content that is in demand. As such, there needs to be government and private financial incentives that reflect the economic and cultural impact we bring to these cities and regions, and that's where the rubber meets the road. That's where the conversations take place. I would tell you that it's very robust right now, the marketplace. You know, every time we do a big deal, we announce it. You saw we announced a big deal in Arizona, where we'll be bringing seven events over the course, multi-year, multi events. We also have Philadelphia, which we just announced with Governor Josh Shapiro. We haven't been to Philadelphia in a while, and that's a good deal for us. Of course, you know, we just announced our Baku, Azerbaijan.
You see the stretch from Philly to Baku.
Yeah.
The line is long. Even our current partners, as evidenced by our announcement this morning. I mean, Abu Dhabi already has a lot of UFC, but here they are looking for more. Saudi already has a lot of WWE, and here they are looking for more. It's a robust marketplace. Our premium content is in demand. We have a number of different geographies that wanna play. We are not out there maximizing the market in terms of dollars. That will never be the case. We will do always what's best for the product, what's best for the brand, and at the same time try to balance the economic impact we'd like to have on our balance sheet.
With WWE, I think Backlash was your seventh PLE on ESPN Unlimited. Can you just speak to the evolution of the product, since you launched with Wrestlepalooza and what it's meant to have WWE integrated with that ESPN brand that I know you know very well?
Yeah. I think the marketing that ESPN has put behind the WWE is beyond anyone's imagination, and that's certainly where we stand. I mean, to sit there on a Friday, even a Thursday, and see all the promotion, all the content, all the interviews across First Take, which is the show with, hosted by Stephen A. Smith, highly rated. Get Up, which is hosted by Mike Greenberg, highly rated. The Pat McAfee Show, he's goes on for two hours. Obviously, he's a commentator on WWE events, so it makes a lot of sense. It's very authentic. It's very seamless. Then he goes and does another hour on YouTube. It's just incredible the amount of weight they're putting behind this, and obviously we are a major tenant and anchor of their ESPN Unlimited strategy.
They have now closed many of their deals with their platform providers. I think we're waiting on YouTube TV, which is an important one because a lot of Gen Z is watching through YouTube TV. I know certainly my sons are. I'd like to see that deal get done, and I think they're going to get it done fairly soon and make a big announcement out of it, and that will just play to our favor. They'll have all their deals done, then it just becomes a education process on how easy it is to sign up for ESPN Unlimited, especially if you already have a deal with a satellite provider or a cable provider where you can just authenticate and not have to pay any more money incremental.
That's going to be a great story for us, and ESPN's going to get take-up because their roster, meaning their portfolio of content, is so extraordinary, and now they have MLB.TV on there as well. If you want all your regional games from an MLB perspective, you get it all at ESPN. I mean, it's really a great value play. It's just going to take some time to get the kinda take-up that they would expect and we would expect.
Before we pivot, I wanna ask about the domestic media rights market. Lotta eyes on the NFL, whether they enter the market early. There's a significant implication for properties coming after.
Right
NHL. You go further down the line, NXT, SmackDown. This is my really early question about how you're thinking about the rights landscape.
Well, look, we've got, you know, $15 billion of deals that are contracted for the next five to seven years. Recurring high-margin revenue that is locked in place. We're sitting in a good place. There's all kinds of opportunities, ancillary programming, or maybe you're adding fights or different events to any of those sides, not to mention some of the other TKO stuff like Zuffa Boxing or like PBR, which is a winner for us as well. You're always looking to be creative on that front, but we're locked and loaded. Nonetheless, we pay attention to it, especially as budgets get constrained or get expanded in the case of Netflix ever since they got out of the WBD pursuit. You know, we look to take advantage of that marketplace.
If the NFL, which is the best sports and entertainment property in the entire world, goes out there and ends up renewing their deals across the board, surely that's going to take some money out of the system. I believe that would probably affect other Tier B or Tier C properties. The premium inventory, the premium content that draws the big eyeballs, that gets the major engagement, if you keep investing in that and those kind of properties, I mean, from an investor standpoint and as a content creator, us, meaning TKO, investing in those properties, not taking it for granted that we already have deals locked up, then you're going to be in good shape.
Okay. Maybe just one last one on UFC/WWE before we pivot. This last weekend we saw on Netflix they staged a fight between Ronda Rousey, Gina Carano. I think it was reported that that was pitched to UFC. Just maybe kind of help us understand why ultimately that wasn't the right fit for you.
Yes, that's a good question and obviously a timely question. It was pitched to us beforehand, and we did turn it down. That's to take nothing away from Netflix. They're a great partner, and clearly they know what they're doing across the board in every genre right now. You don't get to 300 million or 350 million subs for nothing. Their content offering is unique and distinct and kinda has something for everyone. They're in the big event business. They've been very clear about that.
Yeah.
They're not looking necessarily to buy out leagues. That's why they did the Major League Baseball opener. That's why they do the Home Run Derby. That's why they just did a five-game package with the NFL. They want big spectacle events, and they saw this as a big spectacle event. We're in the true MMA business on a meaningful, consistent basis. When we looked at this potential matchup, keep in mind that there's a real art and skill to matchmaking, right? When you ask Hunter Campbell and Dana White what they think about that matchup prior to the fight happening, the answers we got back, and I mean Ari Emanuel and myself, was, "That fight'll be over in 20 seconds." They were off by a few seconds.
Yeah, three seconds.
I don't believe that a fight like that, just the way it played out, is really good for MMA because, especially because it's Netflix, and they have such an incredible global audience, and it's a massive audience. It's a highly engaged audience that is going to sample, depending on what comes up on the front page with Netflix. For them to then go to that fight and then think that's what MMA is, I don't believe is good for the sport long term. We saw it that way and decided to pass on it, taking nothing away from the legend, obviously, that Ronda Rousey is and the win that she got, and I guarantee incredible viewership numbers that Netflix will soon report. For us, it was more of a stunt than a meaningful MMA event.
Got it. Maybe pivoting. Zuffa Boxing launched earlier this year. It has distribution on Paramount+. Starting a league is never easy. We saw that recently with LIV Golf. Mark, you've seen a number of startup leagues come and go over the years, right? What kinda gives you confidence in Zuffa?
As I mentioned earlier, we're ahead of our internal forecast. It's already profitable. We have tremendous partners in Saudi that are very aggressive. I mean, they would like to see us You know, we reported we'll do 16 or 17 events. They would like to see us ramp that up, and of course, you've seen how active they've been in the super fight space, which is like Canelo-Crawford, which we put on. You know, we did the media deal, and we worked on sponsorship with them, and we also produced the event, and we also promoted the event. They like to see more of those match-ups, and they wanna use those match-ups to drive Zuffa Boxing. We're just in a good place. We've already signed over 100 fighters.
As I mentioned, we have our deal with PSKY, which is multi-year. We have our deal with Sky, and of course, U.K. is a huge market for boxing. We're in the space of building firm value, and as we hit certain milestones, we earn into more equity, and we're just about to earn into our second tranche of equity. Boxing is ripe for this. I mean, it just, it's really ripe for this opportunity. It's been just too scattered, too messed up, too much corruption, too many promoters, too many sanctioning bodies.
Just hard as a fan, and I begrudge no one their livelihood, but too hard for the fan to be able to follow and make sense of it, not to mention to actually create superstars and household names like, dating myself growing up, with Sugar Ray Leonard. We need more of that.
Yeah.
That's what Dana White and Nick Khan are setting out to do with Zuffa Boxing, and we have a ready, willing, and aim partner to stay behind them. Really optimistic about this opportunity, especially because we're in a place, even though we remind them, the street, that this is a year of execution, we're in a place where we're constantly being asked, What's next? What are you gonna buy? What are you going to acquire? What else is out there? We're not hunting for anything. Instead, we have it right here, homegrown in boxing, Zuffa Boxing.
Got it. You talked earlier about the World Cup and On Location. Maybe just, you know, with that event a month away, speak to how demand's shaping up and the learnings you've gotten from that and Milan as you eye L.A. in 2028.
Yeah, Milan was a terrific event. Look, I wish that they had all their facilities
Yeah
built a little earlier 'cause I think they could have done even better on ticket sales and experiential hospitality. Nonetheless, it was an extraordinary Olympics. Extraordinary performance from the United States as well, and that always helps because Americans travel to Olympic Games consistently. When they're there, they spend in a big way. Milan was a tremendous event. Milan itself was incredible. Cortina and the village and what they offered there was a sight to see, and that bodes well for what's to come in L.A. Always good to get it back on U.S. soil, and that will be a real win for us. The World Cup itself, I mean, you can't get better. Mexico, North America, crazy volume of actual soccer or football fans, and we will take full advantage of it.
All the trends are there. David, if you can have these kinds of trends with the geopolitical issues we're seeing from a macro perspective, that just gives you great enthusiasm and confidence for what's to come with L.A., and we're out of the gate strong and much more to come because, as you know, L.A. 2028, they've just been teasing some ticket sales is what I'd call it, right. They haven't put big allotments out there yet. The big stuff is still way in front of us.
Got it. All right, we have about a minute, but your guidance for the year includes 600 basis points of margin expansion. Mark, you get this one often, but as you execute across these growth initiatives, how do you think about managing that expense base long term?
Yeah, look, we are, you know, highly focused from the start to finish, from the top of the house to the bottom of the house, on margin accretion. To your point, at the midpoint of our guidance has us up 600 basis points to a 40% margin, at the same time we're, you know, we're very focused on those FIPs. Build value, make the product better, more great storylines, good rivalries, good stars, you're gonna be able to sell those FIPs. Keep in mind, the TAM is 500 events a year. It's not just the numbered events at UFC or the PLEs at WWE. It's the Fight Nights or it's the PBR. It's Zuffa Boxing. It's Raw. It's SmackDown. It's NXT.
There's a lot to sell, so we think there's ample opportunity for more margin accretion specifically in the next two to three years. At the same time, we're very lean on the cost structure. You have to balance being lean with investing in your product. We will always invest in our product. We are doing just that. As it relates to fighter pay or relates to superstar pay, we are uniquely, I would say, uniquely focused on it and looking at every opportunity to provide more capital for those investments. Also from an ancillary perspective, seeing that our partners, global partners, and some of our geographic partners are focused on our fighter pay and our superstars as well.
That's a good note to end on. Thanks, Mark.
Thank you, David.
Great.