Ari Emanuel - Chief Executive Officer Mark Shapiro - President Jason Lublin - Chief Financial Officer Samanta Stewart - Senior Vice President & Head-Investor Relations

Good afternoon, and welcome to Endeavor's first quarter 2021 earnings call. A short while ago we issued a press release, which you can view on our investor relations site, [email protected].

A recording of this call will also be available via this site. Today you will hear from Endeavor’s CEO, Ari Emanuel; our President, Mark Shapiro; and our CFO, Jason Lublin before we open up for questions.

The purpose of the call is to provide you with information regarding our first quarter 2021 performance in addition to our financial outlook for the balance of the year. 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 described in the risk factors section of our filings with the Securities and Exchange Commission, including our IPO perspective as updated by our first quarter 10-Q.

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 are 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. This measure 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 our IR site. With that, I'll hand it over to Ari.

Thanks Sam. The past year has been by far one of the most challenging, but also one of the most rewarding for our company.

We were tested at every possible way and our teams rose to meet every challenge, demonstrating resilience and ingenuity at every turn. Despite the setback COVID-19 provided, we weathered the storm and laid a strong foundation for the remainder of 2021 and beyond.

Shortly, Mark Shapiro will walk you through some more specific examples of this, and Jason will share more details around our financial results and guidance for the year. First, I want to spend a few minutes on the encouraging recovery signs emerging across our portfolio and how the convergence of technology, sports, entertainment, media and gaming played to our strength, as an integrated company that both owns and represents IP and content.

As more states and countries loosen travel and gathering restrictions, and vaccination rates increase, we are beginning to experience accelerated demand across our 800-plus global events portfolio. As you might recall, the UFC and PBR were two of the first sports organization to resume live events last year, and two of the first to bring full crowds back.

This provides a blueprint for other events across our portfolio, from Frieze Art Fair to Euroleague Basketball. Every on sale brings new perspectives and insight into the pent-up demand globally from consumers.

Much of the demand is coming via our event and experience business, which includes On Location, acquired in January of 2020 just before the pandemic took hold. We are thrilled to be able to share on this call that the International Olympic Committee, IOC today named On Location the Official Global Hospitality Provider for the Olympic and Paralympic Games covering three Olympics beginning with Paris 2024.

A significant relationship marks the first time the IOC has appointed a company as a Global Hospitality Provider for multiple editions of the game. Other distinguished partners to On Location include NFL, NCAA and the PGA Championship, as well as more than 500 music tours and festivals like Coachella.

Just as we we’re seeing the demand for live events and experiences of all kinds, we are witnessing strong demand for all forms of premium content across all distribution platforms. The ever consolidating media landscape around us is a testament to the enduring value of Premium IP and the desire for streaming leaders to gain scale through investments in differentiated content.

We view the combination of WarnerMedia and Discovery, along with Amazon's acquisition of MGM as proof points that content is in high demand and short supply, and that our positioning in this ecosystem favors long term growth as investment contains. Technology leaders and incumbent media companies have to power their S-1 and [inaudible] services while still programming their linear channel.

And as demand increases, there is a finite number of IP creators to meet that demand, thereby increasing the value of talent we represent and the content we own or represent. One thing I'll continue to underscore in these earnings calls is that we are agnostic to all forms of distribution and creators for all distribution platforms.

To give you a snapshot, just within television, we paired talent from writers to actors to show writers with IP. We then sell these series more than 350 in 2020 to broadcasters, cable, channels, streamers, social and gaming platform.

Within streaming alone we remain one of the largest suppliers of content to the biggest platforms like Netflix and Amazon and increasingly to the newer platforms like HBO Max and ESPN Plus. As a look to sports right, the same concept around supply and demand supplies.

There is a scarcity in life and more competition than ever across both traditional network and SBox [ph] to secure those rights. As a result record deals are being negotiated.

Beyond our seven year domestic deal for the UFC with ESPN and ESPN Plus, we also are seeing increased demand for rights internationally as evidenced by our recent UFC rights deal in China. And as a reminder, we're selling media rights globally on behalf of more than 150 clients such as the NFL and NHL in addition to our own property in over 160 territories.

We are also often packaging these right with original programming, and Endeavor Streaming Platform provides streaming services for organizations like the NFL, NBA and UFC. Sports betting is another growing industry, particularly in the United States.

Through IMG Arena we work with more than 470 leading sports book brands worldwide, to deliver live-stream video and data feed for more than 45,000 sports events annually. The point I'm making is that we benefit from all trends in media content, sports, events and gaming, and remain well positioned to continue capitalizing on and growing alongside the high growth industries in which we operate.

With that, I'll turn it over to Mark Shapiro to walk you through our business in greater detail.

Thanks Ari. Across our own sports portfolio, we are indeed benefiting from some of the tailwinds that Ari mentioned.

Those wins existed before the pandemic, but at the same time the pent up demand of the experienced economy is really lighting a fuse across the entire range of our businesses. As you noted, UFC and PBR were two of the first sports organizations to resume live events in the spring of 2020.

For PBR since coming back online and as attendance continues to increase we are actually seeing a double digit uptick in spending from advertisers, who are eager to reach live audiences and ratings on CBS are up 29% this quarter compared to Q1, 2020. Euroleague meanwhile resumed live events in the fall of 2020 and held their final four event in Germany just last week, which we streamed across Facebook, Twitch and TikTok for the first time.

Even though we didn't have crowds in Cologne due to pandemic related restrictions, we anticipate being back to full capacity when the next season commences in the fall of 2021. Similar to the pacing we are seeing at PBR and UFC which we’ll discuss in a moment, I'm happy to say we're seeing strong demand on the advertising and sponsorship side of the business in Europe.

Now turning to the UFC. In spite of the pandemic, UFC had a phenomenal 2020 and that momentum continued into the first quarter of this year.

We believe that the pandemic actually helped accelerate UFCs move into the mainstream. On the event side in 2020, we delivered 41 of 42 planned events and in the first quarter of 2021 we held 11 events, including a few Pay-Per-View events with ticket advance and attendance.

Now on the media side of the business, while many sports, I’m sure you’ve all seen are still struggling to return to 2019 ratings and viewership levels, the UFC on ESPN this year is up 7% among average total viewers versus 2019. On the streaming site, the same success.

We continue to be the anchor tenant of the entire ESPN Plus platform, the original guidance provided by Disney in April 2019 was for ESPN Plus to have 8 million to 12 million subs by 2024. Disney is now saying they will be at 20 million to 30 million subs by 2024 and they are already at 14 million subs according to the most recent earnings report.

There's no question UFC is the biggest driver of the ESPN Plus platform. Disney and ESPN continue to be exceptional partners, leveraging vast components of the massive global platform to drive UFC awareness.

In fact, in January of this year we held our first UFC event on ABC, parking back to the glory days of Muhammad Ali in boxing on ABC sports. This was the first ever live MMA event on the network.

The event became the second most viewed UFC fight night since February 2019. Beyond media and beyond screening, the UFC is hitting on all growth levers at the moment.

One of the key differentiators for the UFC versus other major sports organizations is that we control it top to bottom. Along with Dana White, we are at the single decision maker.

We control all aspects, allowing us to efficiently unlock extraordinary value for UFC across the entire Endeavor platform. On the partnership's front in January, we closed a multi-year licensing partnership with Zappos, in which the company will manufacture and distribute officially licensed UFC merchandise.

We also closed a multi-year deal with Panini America, making them UFC's official and exclusive collectible trading card partner. In that same vein, we now have a partnership with Dapper Labs, a company we were an early investor in that will usher in UFC as the second sports organization to launch an NFC platform akin to NBA Topshot later this year.

The speed and action of UFC lends itself well to creating the digital moments, which will feature current, as well as historical highlights. In February we closed a first in its kind content deal for a sports organization with TikTok.

This multi-year relationship provides for TikTok dedicated resources at UFC headquarters and seeks to bring fans up close and personal to their favorite fighters with exclusive behind the scenes content. Also in February, we secured a multi-year content deal with China's Migu as UFC's exclusive distributor in China for all live events.

Migu will also distribute into Asia in addition of Dana White's Contender Series and partner with our UFC Performance Institute in Shanghai. And in March, we announced the significant multi-year deal with DraftKings making them UFCs first official sports book and daily fantasy partner in the U.S.

and Canada. DraftKings also hired our creative and experiential marketing agency, 160over90, to handle all their partnership and sponsorship management, their experiential and their social media.

Now hiring 160over90 is just one example of Endeavor leveraging one asset of the platform to drive another. At Endeavor we call this architecture, and you will hear Ari and I speak about our architecture process and success stories frequently on these calls.

Our architecture strategy and structure was actually developed and initiated with the help of Harvard Business School professors back in 2019. It's now become the backbone of the way we operate internally.

And finally on the gaming front, our IMG Arena business continues the power UFC's first official product in this space, provided the data and video streams that allow for live betting opportunities for every UFC event. The pandemic created a surge in at-home betting during the shutdown and given that UFC was the only game in town for quite some time.

The state-at-home environment helped attract more fans to the UFC, particularly among the 18 to 34 demographic. Pivoting to our IMG Arena business more broadly, which sits within our events, experiences and rights segment, we are ramping up our data and video stream effort in the U.S., where sports betting is now legal in more than two dozen states.

We also continue to bring new sports, including more niche properties like volleyball on to our platform. At the same time, given our extraordinary partnerships with the PGA tour, the PGA of America which has the PGA Championship and the Ryder Cup and the ATP, we are further investing in sports like golf and tennis, two of the more popular betting sports from a global perspective.

At the end of the quarter we finalized the deal to acquire FlightScope, a European based leading data collection, AV production and tracking technology specialist who's best-in-class technology in tennis and golf will look to now pivot into major U.S. sports like football and basketball.

This will be a big boon to our IMG Arena platform. Moving on to our Events and Experiences businesses, social distancing mandates and government restrictions on travel and mass gatherings continue to of course limit most of our activity in the first quarter.

Reopening rates and mass gatherings are increasing at various and varying paces around the world. We're fortunate that our global footprint enables us to nimbly respond to those changing circumstances.

I’ll give you some examples. In May we resumed our Great Ocean Road Running Festival in Australia, where 9,000 runners participated, making it the larger showing in the event's history.

Also last month we host Frieze New York, the first major art fair to return in the U.S. since the onset of the pandemic.

The event featured more than 60 physical galleries and posted strong ticket sales for its five day run at The Shed in New York City. Additionally I should mention, this summer we’ll be launching our own NFC proprietary platform in partnership with OTOY to feature Digital Works of Art under the Frieze umbrella.

On Monday we launched our Australian fashion week in Sydney. We have a new title sponsor, we have a full slate of consumer shows, we have the biggest slate of designers participating since 2015 and the events largest media valuation ever before the shows have even been staged and for those events in the near term, those coming up, the outlook is truly no different.

Increased demand for our Taste of London event in July, quickly led to the addition of a second weekend for the first time in event history. Weekend and camping passes to August, The Big Feastival also in the U.K.

It's one of our most popular culinary events in the U.K. sold out within hours of going on sale.

Similarly, we are seeing brisk ticket sales for upcoming concerts. The pre-sale for the first event of On Locations Mexico based Beach Concert Series featuring WME client betting company sold out both its January 2022 weekend dates, and the next event featuring WME client Luke Bryan had its fastest sellout in its seven year history.

Following this year's Superbowl, On Location offered a pre-sale for experiences to next year's events, and the most exclusive packages sold out immediately, another area we are seeing brisk sales. In fact, even before we began our general online sales this spring, sales were up significantly over our previously bestselling Superbowl in Miami.

I mentioned earlier the strong response from advertisers we're seeing across our own sports properties. We're actually seeing this elevated level of sponsor interest across the entire event portfolio from Blue Chip events like the Rugby World Cup 2023, where MasterCard's has just signed on; the niche events like the Melbourne Marathon with Nike on at their fall return.

When you look at our events portfolio in its entirety, the pandemic was a catalyst for new digital products and solutions that have become what we believe will be enduring topline revenue generating enhancements going forward. For instance, we created virtual art fairs to complement the iconic onsite experience Frieze is known for in cities like London, New York and Los Angeles and soon to be Seoul, South Korea debuting in September 22.

Expansions like this will live on and serve to diversify our product offerings and connect our brands in more customized and on-demand ways. We believe this will drive memberships, subscription offerings, loyalty programs and enhance the CRM capabilities.

In short, these extensions can convert quickly to new revenue drivers for our events and help capture digital ad dollars. Finally, within our events experiences rights segment, I wanted to touch on IMG Academy, our leading sports training institution which we continue to invest in from both a physical campus standpoint and via digital products.

While social distancing mandates and global travel restrictions have limited our camp [ph] and event business last year severely and even into this last quarter, boarding school enrollment this year has now exceeded 2018, 2019 enrollment, a pre-pandemic year and our camp sales, especially for July are pacing strong. When you layer on college recruiting leader NCSA, Next College Student Athlete which we just acquired, we’re bullish on the opportunity to add new recruiting in college prep digital products to the academy slate of offerings.

Not to mention leveraging the NCSA database of clients to drive further camp sales year round at the academy. And now, I want to transition to our Representation segment.

Similar to our events based businesses, fewer television and film productions and live concerts continue to impact the first quarter. But what I can’t underscore enough and as we look to the remainder of the year and beyond is what Ari mentioned near the top of the call, and that’s the correlation between the seemingly infinite demand for content and a finite number of IP creators, which directly benefits our industry leading talent agency WME.

We are fortunate to have a significant base of multi-hyphenate clients at WME who moved effortlessly across lanes, from linear television, streaming in films, to music, audio and social media. We have countless film and television clients who are booked solid for the next year plus.

Musical agents are landing multi-year television streaming deals. We're seeing an uptick in signing of digitally native talent and gamers, and we have more and more clients tapping into Endeavors tenant ventures arm to form brand partnerships that go beyond traditional endorsement deals, giving WME talent equity in the brand and therefore of vested interest in its promotion.

Turning to Endeavor Content, last week we began production on Roar for Apple. It’s an eight episode anthology series that explores issues women face through unexpected and heightened lenses.

We are producing Roar in partnership with Made Up Stories and we have a half dozen other series in various stages of production for Apple, Hulu, Netflix, Peacock and Amazon Prime. Our partnership with Made Up Stories and the slate we have across the sea of streaming platforms is a perfect illustration of the insatiable demand for content and the pricing power we are able to leverage in a crowded buyers’ marketplace.

Additionally, we are not only servicing U.S. growth here, but I should point out, it's a prime example of capitalizing on local language content demand as two of these series are Australian Network Orders.

As it relates to the music side of the representation business, we typically book at WME more than 30,000 concert dates annually. Well, we are heavily back at work with tours, festivals, residencies.

As much as this corner of the representation business was the bullseye for the pandemic, completely shutting down our music and concert business, it's not done an exactly 180, we have high demand, coupled with favorable pricing and yield, and artists of all kinds are desperate to get back out and tour, to see, to greet their fans. We are locking down major arena tours for 2022 and to make up for a year away from performing live, many of these tours are multi-year, spanning broad territories across North and South America, Europe and Asia.

Now, transitioning to the brand client side of our business. Although the first quarter bears the lingering effects of 2020, we're seeing brands begin to ramp spending back up, after a year of pressing pause on many fronts.

The pandemic brought out both, a comfort and nostalgic side of consumers, as we were all forced to stay at home. As such, brand licensing is increasingly becoming a core part of company's marketing playbooks and we saw that.

As a result, in the first quarter IMG licensing saw an increase in games and collectibles, home and comfort products and health and wellness offerings. From a new deal between Hasrow [ph] and Fortnite to create collectibles, to client Cosmopolitan expanding its CosmoLiving home collection to include new bedding products, and just last week Walmart announced it will carry a new Gap Home Line in a deal brokered by IMG and a terrific story picked up by the Wall Street journal.

Turning to the marketing side of our business, our leading experiential marketing agency, 160over90, has been focused on developing and executing its strategies to meet the needs of brands as they shift more ad dollars towards digital and live events and experiences. We are capitalizing on that spending shift with clients like Marriott, AB InBev, Visa, Invesco and Audi, who are aggressively turning up their efforts to activate across the resurgence of expanding in-person audiences.

On the health and wellness front, we are working with companies like Greenleaf Foods and their life-like plant based food brand. What started as a one campaign project for 160over90, has evolved into another architecture success story for us.

We were named their agency of record last quarter, partnering them with more than a half dozen WME clients for campaigns and event activation, and then Endeavor content’s now scripted team got the assignment to work with them on the production side to bring their campaigns to life. Today we also announce that 160over90 formed a partnership with Obsidianworks, the marketing agency founded by longtime WME client Michael B.

Jordan and his business partner Chad Easterling. This alignment is designed to help brands more authentically reach millennial Gen Z and underrepresented communities; huge open road here for us to make an impact as a multicultural agency.

Well, that covers what we're seeing across our businesses, a lot of bright lights. And with that I'll hand it over to Jason to walk you through our first quarter results in greater detail.

Jason.

Thank you, Mark, and good afternoon everyone. As already Mark discussed, we are encouraged by the early recovery times and trends we are seeing emerge across our businesses, and believe we are very well positioned to drive continued long term growth.

Let me start by walking you through our first quarter results and then I'll briefly discuss guidance for the year. For the quarter we generated approximately $1.1 billion in revenue, a 10% decline from the same period last year as COVID-19 continues to have a negative impact across our business and geographies.

However, the cash and EBIDA for the quarter was up 13% over the same period last year increasing to $199.5 million, which I will discuss in more detail shortly. As a reminder, we operate our business in three segments: Owned Sports Properties, Events, Experiences & Rights and Representation.

With that in mind, I’ll walk you through our performance by segment. Our Owned Sports Property segment is comprised of a unique portfolio of Sports Properties; UFC, PBR and Euroleague.

This segment performed very well in the quarter with revenues up $283.5 million, up 22.1% or $51.3 million despite the impact of COVID-19 on live events. The quarter benefited from the increase of an output, contractual increases in media rights agreements and higher sponsorship fees, as well as outperformance in other variable revenue streams like international, commercial, Pay-Per-View.

Adjusted EBITDA for the quarter increased $43.3 million or 42.3% to $145.5 million compared to the same period of 2020. This growth was driven primarily from the higher revenues I just described, slightly offset by an increase of operating expenses, which is mostly attributable to travel related to UFC’s, third fight island series in Abu Dhabi in January.

Our second segment is Events, Experiences & Rights or EE&R. This segment includes our Events and Experience business, media rights and distribution, ING Arena and ING Academy.

Given the effect that COVID-19 has had on live events, this segment has been highly impacted. As a result, segment revenue for the first quarter decreased $129.2 million or 19.3% to $539.6 million compared to the same period in 2020.

Event cancellations and attendance restrictions around events like Superbowl led to events based revenue declines. However, this was partially offset by media rights fees associated with events that were postpone in 2020 and moved to 2021, mainly from the 2020 European soccer season moving a number of matches to the first quarter of 2021.

Meanwhile, adjusted EBITDA for the quarter decreased $30.1 million or 43.5% to $39.1 million compared to the same period in 2020. This decrease was primarily driven by the revenue decline I just discussed, partially offset by a decline in operating expenses.

The impact that COVID-19 has had across this segment is clear, but as Ari and Mark mentioned, we are optimistic about the recovery of the reopening rates we are seeing globally. Moving onto our Representation segment, which includes all of our client representation business such as WME, our experiential marketing agency 160over90, ING licensing and Endeavour content.

Revenue declined by $43.8 million or 15% in the quarter. This was driven primarily by the impact of COVID-19 on advertiser spending, negatively impacting our marketing and experiential activation businesses, and Endeavor content’s ability to deliver projects in the quarter due to COVID-19 related delays.

Adjusted EBITDA for the quarter decreased $7.1 million or 10.4% to $61.5 million, driven by the revenue declines I just mentioned, partially offset by reduced operating expenses. Similar on our look for events, we remain encouraged by signs of production and concerts ramping up, along with increased marketing experiential spending.

Finally, corporate adjusted EBITDA for the quarter improved $7.9 million or 14.5%. The decrease in expenses was due primarily to reduced cost of personnel, travel and professional fees.With Q1 as a backdrop, I want to take a few minutes now to address our guidance for the full year 2021, predicated on the momentous you heard from both Ari and Mark.

As we’ve discussed, the ongoing pandemic has had a significant impact on our business. Even though activity has resumed across a number of our businesses and some restrictions have eased or been lifted, there still remains restrictions impacting some of our businesses in certain geographies.

There are also a lag from when restrictions are lifted to when we're able to generate revenue and resume our normalized business cadence. That said, while we were always expecting a recovery, we are witnessing that recovery happening slightly faster than we had anticipated.

With that, I do want to remind you that our financial results will vary from quarter-to-quarter depending on the timing of events across our portfolio, timing of business transaction on behalf of our clients and timing of content delivery. As a result, we evaluate our financial performance on an annual basis and therefore we’ll be giving you annual guidance today.

For 2021 we expect to generate revenue between $4.76 billion and $4.83 billion, and adjusted EBITDA in the range of $735 million to $745 million, and we intend to repay $600 million of our outstanding debt in Q3 2021. With that, I turn it back over to Ari.

Thanks Jason. Before we open up for questions, I want to briefly frame how we're thinking about our future.

When it comes down to it, there isn't a trend positively impacting the sports and entertainment landscapes that we are currently benefiting from. To that end, we'll continue leveraging the entire endeavor portfolio to capitalize on each of the trend and extract maximum value out of every deal for our clients, partners and owned properties.

We also remain committed to strengthening our balance sheet and deleveraging and will continue to look across our changing global landscape to unlock opportunities, etc., drive long term growth and value for our shareholders. With that, I'll hand it over to the operator.

Hi! Good afternoon.

Two questions; I’m wondering if you could talk a little bit about the growth drivers that you see and are most excited about at the UFC specifically? Everyone is very focused on that business.

Obviously the ESPN deal is up several years out, but between now and then what do you think are the areas we should be focused on that can drive that business from the top line point of view. And then I just had a clarification question probably for Jason on the guidance.

You know we’re seeing reopening happening as you said quicker, but it certainly varies geographically and by events. Anything you can tell us in terms of what the assumptions are around returning to live events and their full form that's baked in the guidance, so we have a sense for sort of what the underlying assumption is there.

Thanks everybody.

Thanks Ben. So in the next 24 months – I’ll get to all the point that you’re asking.

So first one is internationally. For the next 24 months we have several international deals coming up.

About 20% to 30% of our deals come up every year on the international side. I can go into more detail of this, but Brazil, Australia, Canada, UK, Philippines, South Korea, Germany and Russia.

China as you just heard from Mark, we made last year, but I'll come back to China. Also new territories that just got sanctioned are France and where there's possibilities in Africa.

Sponsorship is another big area. And remember, in our sponsorship number, we've added more products to put sponsorship on.

Pay-Per-View, Fight Night, Contendor Series, Ultimate Fighter which we just sold to ESPN, Fight Path, and also in China there's a local contender series also, I’ll come back to China. I just also want to remind you, our fan base is 90% international and 10% domestic.

International Pay-Per-Views are outside our ESPN deal. They go to the USD Endeavor directly.

We've extended EA deal which was again in the middle of the year. We have a better split.

Also micro transactions – also the China portion of that deal, whether it be on PC or mobile is outside that deal. Again, I’ll come back to China as a whole entity.

Gambling, IND Hearing is handling a big aspect of our growth. NSG, Mark talked about our Gap and the last deal.

We will be the second sport up and if our deal was in our playing cards, our Panini deal, we've outperformed that situation in a significant way, which is a good indicator that our NFT business will be significant. Mark talked about a little bit On Location and our Pay-Per-View event.

That will be a very big driver and has been a big driver. In China I just want to say the following: We have our performance institute in China, we have 50 new fighters.

Our major deal is a very big deal – a big increase from where we were and now as I said to you, we have our mobile – our mobile business is available while we go to marketplace with that sponsorship and the contenders here which maybe wants us to do. So China as we look at it is going to be one of our significant drivers inside of this.

Those are the key drivers. We can go into more detail on anything.

I'll turn it over to Mark to maybe fill in some more stuff if you want and then we’ll turn it over to Jason to clarify the opening.

Yeah, so Ben just the – and for everybody else on the call, at the risk of being repetitive, I do want to underscore some of those buckets that Ari talked about, obviously because OSP is such an important, not only growth driver, but just overall segment to the business. I think first it's important to just take a step back if you will and look at what we've done with the UFC since we purchased it in 2016.

To your point, we did the seven year deal with ESPN. We've grown Fight Pass, which is our over-the-top platform subscription.

Obviously a lot of live events that extend beyond the UFC MMA and that’s a big growth driver going forward as Ari mentioned. We've grown sponsorship significantly, and this has been a panner year for us shockingly with COVID.

Our monster deal got renewed as we talk about Draftkings, which we mentioned Modello [ph], but we also did a multiyear deal with Bet365 and we did a terrific deal with guaranteed rate mortgage and we're actually in negotiations on a renewal for that. We’ve been introduced in new markets as Ari mentioned and we're just chomping into bits to get introduced in France, which is soon.

We've increased our international rights, really leveraging the endeavor platform. All of the IMG media work that Adam Kelly and Sam Zussman, their teams do, gives us huge leverage and it’s allowed us to get some good offices Ari mentioned on the international rights to decide.

We’ve begun to introduce site fee [ph] and it's something we’ve been asked about a lot given the competitors or other leagues like F1 gets site fee. This is really great into our model going forward.

We don't see it as significant or material, but frankly we saw some site fees in Abu Dhabi during COVID and we expect to see more in bunches as time goes on. We’ve gotten big time into licensing products.

Ari mentioned betting, that’s the way of the world. I mean half the states right now in the U.S.

are licensed and that’s only going to grow. And on the ancillary side, we opened a performance institute in China.

That's important, because we're going to be getting by and as Ari mentioned, China is a huge priority. We need more Chinese fighters coming out of that.

We closed our first kit deal. We did a sizeable EA deal that Ari mentioned, a renewal there, and NFP is something that you know we’re going to follow the NBA top shot.

Although we did our deal before the NBA with Dapper Labs, we’re going to follow their lead and really score in that area. And then all of this gets replicated, China, China, China, and that's kind of where we're going.

But if you look at it at the end and we’re not going to talk about specific numbers, we’ve doubled the EBITDA since we took over the UFC. And when you put all this into context, all this in perspective, we are simply in the early stages.

We have a young demo, we have a strong female fan base, we are global. Our location is going to be a big driver here.

In fact, we’re 75% sold out for experiences for the Glendale Arizona matchup that’s coming up this month and then the Conor McGregor huge fight, which is going to be July 10 back in Vegas to a sold out show at T-mobile. WME is driving all kinds of content opportunities, digital opportunities, influencer opportunities, podcast opportunities, all the same equation of making more stars out of our great fighters once they win in the octagon, because you do have to win in the octagon first.

And then you’ve got the Walt Disney company behind all of this. I mean we are the big driver on ESPN Plus.

They recognize that and they are turning on all of their assets to get behind the UFC and the partnership you know couldn't be better. And I would just say in closing on the UFC, a lot of this is done notwithstanding COVID, which by the way we're still in the middle of.

So that just shows you that Dana White and that truck, that locomotive, it just keeps powering through and it's really been accelerated. Its accelerated to sport into the mainstream.

My son is 20 years old. He comes home from college.

All he did during COVID on Saturday nights was line up with seven friends outside watching the fights, fight-after-fight, card-after-card and I would add betting small, small amounts of course, because you’re not allowed to big amount bets, but betting nonetheless on fight after fight, which of course goes to ING arena. So you know that’s a lot on the USD fight side, but we’re – I think you can tell we're pretty bullish.

On your second question, and Jason you could do the financial. You know we would just remind you that we're still in a COVID state of mind here, right.

I mean we are a global company, and the U.S., although we're seeing a lot of doors opening and we're seeing a lot of bright lights as I mentioned, you know it's not indicative of the rest of the planet, and music is probably the best example, right. We're going to get a few things in the third quarter; festivals, things popping off some bookings and fourth quarter that will heat up a lot more in the U.S.

But you're not talking till 2022 so it normalizes for Europe, for Pac Rim, for South America. I mean way behind here and of course the variant is now trixing through the U.K.

right now, the Indian variant, that also is going to you know slow itself. So I would just say our guidance today is based on the visibility of the business and it contemplates a fourth quarter where we assume a high degree of delivery, both in Endeavor Content and some of those projects could get close to Q1 and international events.

Jason?

Yeah, the only thing I would add to what Mark said is from a guidance perspective for the UFC. We have a – we have forecasted for the Pay-Per-View events having live audiences throughout Q3 into Q4, not for the fight night events, and on the client side you know having music really into Q3 going into Q4.

Thanks everybody.

Thank you.

Hi guys, thanks for taking the question. I think this is for Ari, but maybe Mark has comments too.

You touched on it in your prepared remarks, but I wanted to see if you could give us a little more detail on the media consolidation that's happening and how it might impact Endeavor. Maybe some examples on how past deals like Disney buying Fox impacted the business and the ways in which Warner and Discovery might be different from that or similar.

And how aggressive do you expect Amazon to become with MGM in the portfolio? And then a follow up, [inaudible] seems so dramatically in the past year.

Can you talk about the protections you're getting in place for your clients if the studio changes distribution strategies on their films you know last minute in some cases.

Well, I think – this is Ari, thanks for the question. I think the Warner, Discovery and the Amazon, MGM is just further proof point that content is high demand in short supply, both on the scripted, non-scripted side, movie side and also on the sports side, because I think Warner’s Discovery is also going to be in the sports side as [Inaudible] Plus has been on a bunch of sports rights too.

And opposition in the ecosystem saves long term growth and investments will continue. The tech leaders and the incumbent in my opinion, with powered X-BOD and A-BOD services still on the – will also have to protector their linear channels.

So demand is increasing. It's one of the early premises that we started the company out with.

There's a finite number of creators and intellectual properties and IP to meet that demand, therefore increasing the value of talent we represent and the content we own. So all-in-all prices are going up in every situation and that's the way I think – as it relates to the release schedule, and the windowing and the issues surrounding there, I think that was your second question if I'm correct.

Listen, we saw this happen with Warner Brothers; we've seen that happen with Disney. We are going to find the floor as they figure out and if we just look at this past weekend, Disney had a duel window, All Time Disney Plus and theatrically Paramount had just a theatrical release.

They are going to have some let go on the Paramount side just directly to streaming. We have navigated that whole situation.

There's no clear answer right now with how this is going to happen, but we are the big, one of the big players in that ecosystem, and we are negotiating on behalf of our clients and our own properties to make sure that we get the proper economic as we go forward, and that’s the way we are going to operator until we find the proper flow, which is going to take a little bit of time as COVID kind of moves on.

You know Meghan, just working backwards from there, I mean I think your second question, you know to Ari’s point, we're more flexible at the studios, right. I mean we're having these conversations up front and they are paying for that flexibility.

So that moves right to the benefit of all of our clients, that's all I’ll say on the second question. On the first question I would just add, I mean Ari talked about just further proof points that believe it or not content is in short supply if you think about it; it’s just growing.

But that content has a different definition these days. It’s all forms, it's audio, its betting, its video gaming, right, its live sports, its TV, its films, its book to films, its audio, not just podcast.

So this isn’t just about representation, and you can bet that Amazon didn't buy MGM just to leverage the library. There's going to be a lot of buying, there’s going to be a lot of original programming and there's going to be a lot of spending.

And I think what underscores the entire comp consolidation question and equation it that truthfully, it powers all our secular tailwinds, if you think about it. Reopening, content, OSP segment, Owned Sport Properties, I mean that also as we said and everybody knows that Eurosport is a major fan of sports and he’s going to be a big there.

The reliance on influence these days to move product, to sell tickets, to sell movie tickets, to sell books, sports rights overall and betting. So all the wins, all the trends that power the Endeavor Enterprise if you will, are really going to be fueled by this consolidation.

Okay, thanks guys.

Great, great, thanks for taking my question. I have two.

The first question is on live events. I know it's been over a year since the acquisitions, but it be great to hear how you thought about integrating On Location and how that could potentially kick start the live events business when the economy is fully reopen.

And also relatedly, like how should we be thinking about the contribution of the Olympics longer term? The second question is on capital allocation and M&A, and I’ve [inaudible] if the pandemic has potentially locked any new M&A opportunities or previously thought of not available, and looking ahead towards the next 12 to 18 months, how will you weigh paying down debt versus potential acquisition?

Thank you.

Alright Ben, I love four questions in one. Ben, by my count here we got On Location integration, we've got Olympics and kind of financial impact, and we will have some expenses we are going to incur in the first few years, so Jason will get into that.

M&A which Ari will cover and debt which obviously Jason and Ari can both cover, because you know Ari’s commitment to that debt reduction. First of all on On Location, look, I would just say, its already fully integrated.

We’ve got a tremendous leadership team and Paul Caine and John will be there and the Olympics deal right out of the gate winning these first three Olympics, huge ones too. I mean you can’t get a better line-up Paris, Milan, Los Angeles, very, very excited about it, but it's not just the Olympics and that opportunity.

I mean we're a provider for a lot of major sports owned events. The ones we own line UFC, like The New York Fashion Week, like the Sydney Fashion Week which is plain today sold out in Sydney, Australia despite some shutdowns by the way, Miami Open, Professional Bull Riding.

But beyond that we do work with Masters, we do work for the PGA Championship which was huge for us two weeks ago with Phil Mickelson and that offset win and then of course concerts, and as they come back fourth quarter, first quarter, you know it's going to play right into the fastball of On Locations. So it's full year integrated, a lot more opportunity to take our events and blow it out to build more experiences around the event with our clients and partners.

That's the differentiator for Endeavor and that architecture is working. Super Bowl advance sales, you heard in my comments at the top, really tremendous.

The fact that we were beating Miami, which is you know the best place to have a Super Bowl is a home run, and you know we feel good. I'll let Jason kind of talk about the financial where it is, its revenue recognition will be later.

What you should know in the first couple years here, we'll be ramping up, adding on, we’re integrated, but we now need more firepower to do the Olympics and will increase some of those expenses the next couple of years. Jason.

Yeah, as Mark said, you know we are really excited about the revenue potential over the likes of the deal, which in Paris ‘24, Milan ‘26 and LA 2028. You know Mark mentioned you know from a revenue perspective we’ll be starting to recognize our revenue, and the majority of it in 2024.

Then we will certainly have some operating expenses leading up to the 2024 games and that is inclusive of the guidance that we put out today.

And Ben, as it relates to M&A, listen we continue to look for strategic M&A and organic growth. There’s been a lot of organic growth, let it be, Sport24 in the company, Gaming with IMG Arena and Endeavor Content and we are opportunistic.

M&A, it has two buckers for us. One is that its built on to our existing portfolio, which kind of increases our note around our businesses.

It was called reigning champ, it's really called NCSA which is for IMG who are carrying business like the LinkedIn of that business which fits perfectly into our IMG Academy business. And then Mark mentioned also in his comments, Flight Scope which is a data capturing technology that fits into our IMG Arena business.

In addition to that, we are constantly looking for our next acquisition that is not a bolt on to our existing portfolio, that we think we can utilize the platform to take out costs, drive international, use the whole platform to increase the value. We think there's a lot of opportunity out there, but we're also very diligent and have to go through a rigorous process as we look at them.

So that's how we look at. We are partially inclined.

As you know we built a company on a lot of M&A and we look at the market place and we're feeling very good about it.

But in terms of de-leveraging, we’re committed to deleveraging you know, that should come in the form of cash flow play down, using cash flow to pay down debt as well as we’ll leverage M&A. Now we are public, we are a public company also with a public currency to you know execute on M&A.

But in my remarks we also highlighted that you know we expect a $600 million reduction of our outstanding debt in Q3. So we are very committed to our deleveraging profile as well and we are balancing that with M&A.

Thank you. My question really is on the content side and the comment you made earlier about the robust demand for content which we read about obviously all the time.

I’m curious if you can give us some color about how much is sort of catch up given COVID, and how much is just really the sustainable growth and demand given the proliferation of the streaming outlets and distribution outlets in general. And I guess second, just sort of staying on that topic.

If you can elaborate how you think your share is trending versus others or your peers, or is that irrelevant right now, because there is just so much growth and demand for content right now for everybody.

So I’m assuming you’re really mainly talking about, even though Mark mentioned there's a lot of different content, when you think about it there's podcast, there is audio, there's gaming, there's a lot of different forms of content. There's gamers that are going into the surface, but I think you are thinking about mainly movie, television on this.

Yeah, yeah, exactly on the entertainment fund, yes.

When we started this process, you know last time everybody said it's got to stop at one point in time; its only increased. You now have seven big players that have committed financially, it’s a huge economics.

We now have Netflix. I think it was in their last earnings call $17 billion.

They are going to do 16 movies, because a lot of their libraries are going to the other services and they got to build that library. Disney is committed.

You now have Paramount Plus coming into the market place committed too for their services. As you just saw a little bit of a consolidation on Amazon Prime.

This is not, and the linear players that also had excellent services have got to actually still service their linier channel, they have huge investment there. I would tell you, there is players that you don't even know.

All these companies are making large overall deals for writer, director, actors throughout the system and this is not slowing down. I said it before, I do not believe this is slowing down for five years, because they've all committed strategically to this, plus they have the – the linear players have to defend their service also in this mix.

So I don't believe it's slowing down in any capacity.

Thank you.

Thank you very much. Could you help us think about the cadence of margins?

I know that you gave us some guidance for the year, but based on the expenses being a little later than we thought in the first quarter, what are the normalized margins for these businesses, and again how we think that'll play out throughout the course of the year? And then secondly, kind of related to the margins, what are the normalized business activities versus meeting, how should we think about the organic versus inorganic contributions here, and how will Endeavor Content be changing once the WGA settlement is factored in?

Thanks.

Yeah, so I’ll take that first question of the margin profile. So look I think if you look at the mid-point of our range, we are you know projecting I think about roughly 15.4% margin for the year.

Obviously Q1 was higher than that, and obviously this is COVID impacted your, so this is transitioned here. That is not indicative of the margin we see for this business long term.

So that's just what we are projecting for the business to be this year.

And then David, just as it relates to Endeavor Content, which is in full swing right now, as I mentioned that big deliverables in the fourth quarter. Our 2021 guidance assumes Endeavor Content is status quo, for the balance of the year, that's our plan.

We will have this in its entirety, in its current form through the end of the year.

And then just anything on the inorganic contributions in the quarter or for the year?

I don't know. Specifically David, I’m sorry.

Just what your acquisition activity is doing, contributing into the revenue and EBITDA for the year. If we could get a sense of what that strategy is doing for your growth.

Yeah, all I would say is that we – we closed down a couple of transactions, which you know which had slight scope and FCA, but we are not going to break out the split between organic and inorganic growth.

Same goes for Endeavor Content.

Alright, thank you very much.

On an ending note, here's what I would say to you. As Mark said, in his statement and as I’ve stated.

When you think about content, when you think about gaming, when you think about sports, we're in every sector - music, whether it be WME or On Location, we are in every growth sector. When you look at Ticketmaster, we're a huge supply of them.

We are also On Location. Gaming we’re one of the big players.

Sports ownership, sports representation, we're in that space. You have to come through our doors and it relates to how you want to do content throughout the ecosystem.

Whether that be podcast or whether that be movies and television, we are in every growth sector in the media space. So when you think about your media analysis, you have to factor us in.

Thanks everybody.

Thanks for joining us.