10-K: TKO Group Holdings Reports Strong 2025 Earnings Amid Strategic Expansion

TKO Group Holdings announced significant increases in operating income and Adjusted EBITDA for 2025, driven by key acquisitions and new media rights deals, despite a slight overall revenue decrease.

Summary

• TKO Group Holdings, Inc. (TKO) was formed in September 2023 through the combination of UFC and WWE.
• On February 28, 2025, TKO completed the Endeavor Asset Acquisition, acquiring IMG, On Location, and Professional Bull Riders (PBR) for approximately $3.25 billion plus a $50 million purchase price adjustment, satisfied by issuing 26.54 million TKO OpCo common units and equivalent Class B common stock.
• For the fiscal year ended December 31, 2025, total revenue decreased by 3% to $4,735.2 million compared to $4,884.2 million in 2024.
• Operating income significantly increased to $835.0 million in 2025 from $30.9 million in 2024.
• Net income attributable to TKO Group Holdings, Inc. rose to $195.4 million in 2025 from $9.3 million in 2024.
• Adjusted EBITDA increased by 46.5% to $1,585.3 million in 2025 from $1,081.9 million in 2024.
• UFC segment revenue increased by 7% to $1,502.2 million, primarily due to $62.9 million higher partnerships revenue and $28.3 million increased media rights fees.
• WWE segment revenue increased by 22% to $1,709.4 million, driven by new global content distribution agreements with Netflix and ESPN, and $74.3 million increased live event revenue.
• IMG segment revenue decreased by 31% to $1,367.3 million, mainly due to a $555.1 million decline in On Location revenue (prior year included 2024 Paris Olympics) and $47.8 million lower media rights from the FA Cup.
• Corporate and Other revenue increased by 17% to $199.1 million, primarily from $29.0 million higher management and promotional fees related to boxing.
• The company repurchased 4.6 million shares of Class A common stock for $866.8 million under a $2.0 billion share repurchase program.
• Quarterly cash dividends increased from $0.38 per share to $0.76 per share in September 2025, with total dividends paid to Class A common stockholders in 2025 amounting to $185.2 million.
• Outstanding indebtedness under credit facilities increased to $3.7 billion as of December 31, 2025, from $2.8 billion in 2024, following a $1.0 billion incremental term loan in September 2025.
• The company settled the UFC antitrust lawsuit for $375.0 million in 2024, with the final payment made in June 2025.
• Vincent K. McMahon resigned from his Executive Chair and Board member positions in January 2024, following an investigation into alleged misconduct.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this filing positively due to significant improvements in operating income and net income, strong Adjusted EBITDA growth, and successful integration of strategic acquisitions, despite a slight overall revenue dip. The new media rights deals and capital return programs are strong indicators of future value.

Positives

• Operating income surged to $835.0 million in 2025 from $30.9 million in 2024, indicating strong operational efficiency and profitability improvements.
• Net income attributable to TKO Group Holdings, Inc. significantly increased to $195.4 million in 2025 from $9.3 million in 2024.
• Adjusted EBITDA grew by 46.5% to $1,585.3 million in 2025, demonstrating robust underlying business performance.
• UFC segment revenue increased by 7% to $1,502.2 million, driven by new sponsors and increased media rights fees.
• WWE segment revenue increased by 22% to $1,709.4 million, benefiting from new global content distribution agreements with Netflix and ESPN, and successful live events.
• The Endeavor Asset Acquisition expanded TKO's portfolio with IMG, On Location, and PBR, enhancing capabilities in media rights distribution and experiential hospitality.
• UFC set eight new all-time highest-grossing event records in 2025, and WWE's WrestleMania 41 and Royal Rumble achieved record attendance and grossing figures.
• The company initiated and subsequently increased its quarterly cash dividend program, signaling confidence in future cash flows and commitment to shareholder returns.
• An active share repurchase program of up to $2.0 billion is underway, with $866.8 million already executed in 2025.

Negatives

• Total revenue decreased by 3% to $4,735.2 million in 2025 compared to $4,884.2 million in 2024, primarily due to the IMG segment.
• IMG segment revenue declined by 31% ($602.9 million), largely due to the absence of 2024 Paris Olympics revenue and the loss of FA Cup media rights.
• The UFC segment held one fewer numbered event in 2025 compared to 2024, which partially offset revenue growth in that segment.
• The company has a substantial amount of indebtedness, totaling $3.7 billion as of December 31, 2025, which could adversely affect its business.
• A foreign exchange rate net loss of $13.7 million was incurred for the year ended December 31, 2025.
• A net loss of $9.6 million resulted from the sale of certain equity method investments in 2025.

Risks

• Ability to generate revenue from discretionary and corporate spending on events is subject to macroeconomic conditions beyond control.
• Dependence on key relationships with television and cable networks, satellite providers, digital streaming partners, and other distribution partners; failure to maintain, renew, or replace key agreements could adversely affect operating results.
• Inability to adapt to or manage new content distribution platforms or changes in consumer behavior resulting from new technologies, including artificial intelligence.
• Potential for unsuccessful strategic acquisitions, investments, and commercial agreements, or pursuing them despite the risk of lack of profitability.
• Adverse publicity concerning the company or its key personnel could harm its professional reputation and business.
• Operating in highly competitive, rapidly changing, and increasingly fragmented markets, both domestically and internationally.
• Failure to protect IT Systems and Confidential Information against breakdowns, security breaches, and other cybersecurity risks could result in financial penalties, legal liability, and/or reputational harm.
• Subject to extensive U.S. and foreign governmental regulations; failure to comply could adversely affect the business.
• Dependence on the continued services of executive management and other key employees; loss or diminished performance could adversely affect the business.
• Changes in public and consumer tastes and preferences and industry trends could reduce demand for content offerings.
• Owning and managing events for which media and sponsorship rights, ticketing, and hospitality are sold exposes the company to greater financial risk, and non-compliance with regulations could prohibit live events.
• Business and operating results may be affected by the outcome of pending and future litigation, investigations, claims, and other disputes.
• Substantial amount of indebtedness could adversely affect the business, and additional financing may not be available on reasonable terms.
• As a holding company, dependence on distributions from TKO OpCo to pay taxes and other expenses.
• Controlled by Silver Lake through Endeavor, whose interests may differ from other stockholders of TKO Group Holdings.
• Risk that Endeavor or its subsidiaries sell a controlling interest to a third party in a private transaction, leading to control by an unknown third party.
• Failure to realize the anticipated benefits of the Endeavor Asset Acquisition.
• The market price of Class A common stock may be volatile.
• No guarantee of specified amounts or particular frequency for share repurchases or dividend payments.
• Tax matters may cause significant variability in financial results.
• TKO OpCo may be required to pay additional taxes as a result of the partnership audit rules.
• Potential internal conflicts of interest due to the breadth and scale of the platform.
• Risks associated with expanding into other new and complementary businesses and/or making certain investments or acquisitions.
• Sharing control in joint venture projects, other investments, and strategic alliances limits the ability to manage third-party risks.
• Increasing scrutiny of, and evolving expectations for, sustainability and environmental, social, and governance initiatives could increase costs or harm reputation.
• Catastrophic events, severe weather conditions, and natural disasters could adversely affect operations, sales, or financial results.

Future Outlook

TKO anticipates continued growth in media rights content agreements upon contract renewals, reflecting the increased value of its premium content to linear and streaming channels. The company expects to generate more content in various formats to acquire and engage new and existing fans, drive license fees from distribution partners, and increase adoption of its direct-to-consumer offerings. Growth in live events and hospitality revenues is expected through increased ticket sales, maximized site fees, and expanded premium VIP hospitality offerings. International expansion and diversification of partnerships are also key growth vectors. The company believes its structural advantages, such as unilateral decision-making and year-round events, position it well for future growth.

Management Comments

• Ariel Emanuel (CEO and Executive Chair) and Mark Shapiro (President and COO) leverage their decades of experience in founding, acquiring, and scaling sports and entertainment businesses, viewing their leadership as a key competitive advantage within the dynamic sports and entertainment landscape.
• Management believes TKO's businesses are well-positioned among sports, media, and entertainment peers given its comprehensive portfolio of premium intellectual property, global media distribution capabilities, and experiential offerings.
• Management believes the allocation methodologies used for the historical combined periods are reasonable, but acknowledges that the amounts may not reflect the actual costs that would have been incurred had the Acquired Businesses operated as standalone companies.

Industry Context

StockSavvy.ai notes that TKO's strategic acquisitions and new media rights deals capitalize on the increasing value of live sports and entertainment content, a trend driven by both traditional linear platforms and the expanding digital streaming market. The company's diversified portfolio, which combines owned intellectual property (UFC, WWE, PBR) with extensive marketing and hospitality services (IMG, On Location), positions it to maximize value across the entire sports ecosystem. The shift of major content to streaming platforms like Netflix and Paramount+ reflects a broader industry trend of 'cord-cutting' and the intensifying competition for premium digital rights, where TKO is securing long-term, high-value contracts.

Comparison to Industry Standards

• UFC and WWE fan demographics, with median ages of 37 and 35 respectively, skew younger and more diverse than those of traditional U.S. sports leagues, which typically range from 38 to 47 years old, indicating a strong appeal to a coveted demographic.
• WWE's YouTube channel, boasting over 110 million subscribers, ranks among the most viewed globally, highlighting its exceptional digital engagement compared to other entertainment properties.
• The company's ability to secure substantial site fees from local governments for marquee events like WrestleMania and UFC 311/312 demonstrates strong market demand and significant economic impact, comparable to major global sporting events.
• The acquisition of IMG, a global leader in sports marketing, and On Location, a premium experiential hospitality provider for events such as the Olympics, FIFA World Cup, and Super Bowl, positions TKO to compete directly with other major global sports marketing agencies and hospitality providers, leveraging a comprehensive service offering.

Management Changes

Corporate Governance

Legal Proceedings

• **UFC Antitrust Lawsuits**: The Le et al. v. Zuffa, LLC class-action lawsuit was settled for $375.0 million, with final approval on February 6, 2025, and the final payment made in June 2025. Other similar lawsuits, Johnson et al. v. Zuffa, LLC et al., Cirkunovs v. Zuffa, LLC et al., and Davis v. Zuffa, LLC et al., are ongoing, alleging anti-competitive practices and seeking injunctive relief and/or treble damages.
• **WWE Misconduct Allegations**: The SEC settled charges against Vincent K. McMahon on January 10, 2025, for failing to disclose certain settlement agreements, circumventing internal accounting controls, and causing material misstatements in WWE's 2018 and 2021 financial statements. No charges were brought against the company. A lawsuit filed on January 25, 2024, by a former WWE employee against WWE, Mr. McMahon, and John Laurinaitis alleges sexual assault and claims under the Trafficking Victims Protection Act; WWE has moved to compel arbitration. Another lawsuit filed on October 23, 2024, against Mr. McMahon, Linda McMahon, WWE, and TKO alleging sexual abuse had motions to dismiss denied for most claims on December 10, 2025. Consolidated class action lawsuits (Laborers, Palkon, Pontiac Actions) alleging breach of fiduciary duty against former WWE directors are ongoing, with fact discovery closed and trial scheduled for June 2026.
• **IMG Competition Lawsuits**: The Italian Competition Authority (ICA) investigation concluded in May 2019 with a fine of approximately EUR 0.3 million for IMG. Multiple claims filed in the Court of Milan, Italy, starting July 2019, by football clubs and the Serie A league against IMG and other parties, allege anti-competitive practices and seek damages totaling over EUR 2.5 billion. IMG intends to defend against these claims.

Related Party Transactions

• **Endeavor Group Holdings (EGH) and its subsidiaries**: EGH and its subsidiaries, which collectively own approximately 63.0% of TKO's voting interest, provide various services to the company. In 2025, TKO earned $7.2 million in event and other licensing revenues from the Group, incurred $26.0 million in direct operating costs, and $44.5 million in selling, general and administrative expenses with the Group, resulting in a net expense of $(59.9) million. TKO reimbursed the Group $0.1 million under the prior Services Agreement and $54.3 million under the Transition Services Agreement in 2025, and received $8.0 million in cash payments from the Group for transition services. Corporate allocations from EGH to the Acquired Businesses (prior to February 28, 2025) amounted to $21.7 million in SG&A.
• **Vincent K. McMahon**: Mr. McMahon, a former principal holder of TKO Class A common stock and former Executive Chair, reimbursed the company $6.4 million in 2024 and $5.8 million in 2023 for costs related to the Special Committee investigation. He also made personal payments of $1.5 million in 2024 and $5.5 million in 2023 for certain liabilities and $3.5 million in 2023 related to WWE's global headquarters lease.
• **Dwayne Johnson**: Appointed as a WWE director designee on the TKO Board in January 2024. He received an RSU award for $30.0 million for promotional services, resulting in equity-based compensation expenses of $4.0 million in 2025 and $17.7 million in 2024. He also received $0.9 million in annual royalties in both 2025 and 2024, and reimbursements for travel expenses totaling $0.6 million in 2025 and $2.6 million in 2024.
• **Euroleague Ventures S.A. (Euroleague)**: TKO divested its equity-method investment in Euroleague during the third quarter of 2025. Prior to divestiture, TKO recognized $16.2 million in revenue and incurred $0.2 million in direct operating costs in 2025 for management and technical services provided to Euroleague.

Stakeholder Impact

• **Shareholders**: Class A common stockholders benefit from increased net income and Adjusted EBITDA, as well as capital return programs including share repurchases and an increased quarterly dividend. Class B common stockholders hold voting rights but no economic rights.
• **Employees/Talent**: Impacted by ongoing cost reduction programs and workforce reductions, but also benefit from equity incentive plans and talent development initiatives. Potential for legal claims from contingent workers remains a concern.
• **Customers/Fans**: Benefit from expanded content distribution through new partnerships with Paramount, Netflix, and ESPN, offering broader access to UFC, WWE, and PBR content. Enhanced live event experiences are provided through On Location.
• **Partners/Advertisers**: Benefit from TKO's attractive and diverse fan demographics, as well as a unified global partnership team offering scaled promotional opportunities and targeted audience access.
• **Creditors**: The company's substantial indebtedness and associated restrictive covenants in credit agreements impact creditors, although the company remains in compliance with financial covenants.
• **Regulatory Authorities**: The company continues to face scrutiny and potential liabilities from ongoing legal proceedings and compliance with extensive U.S. and foreign governmental regulations.

Next Steps

• Complete the $2.0 billion share repurchase program, expected within the next two years.
• Continue to make quarterly cash dividend payments to Class A common stockholders.
• Integrate the Acquired Businesses and evaluate/change certain controls as a result of these integration activities.
• Continue to execute organic and inorganic growth opportunities across its portfolio.
• Monitor developments related to the G7 Statement and Pillar 2 rules for potential tax impacts.
• Continue to defend against ongoing legal proceedings, including antitrust lawsuits and misconduct allegations.

Key Dates

Recommendation

The company demonstrated strong financial performance in 2025 with significant increases in operating income, net income, and Adjusted EBITDA, despite a slight overall revenue decline attributed to a specific segment. Strategic acquisitions like IMG, On Location, and PBR are expanding its market reach and diversifying revenue streams. New, long-term media rights deals with major distributors like Paramount, Netflix, and ESPN provide revenue visibility and validate the value of its content. The initiation and increase of a quarterly dividend, coupled with an active share repurchase program, signal a strong commitment to shareholder returns. While legal proceedings and substantial debt are notable, the overall trajectory of growth in core segments and strategic expansion suggests a positive outlook for long-term investors.

Keywords

Sports entertainment, MMA, UFC, WWE, PBR, IMG, On Location, Media rights, Live events, Hospitality, Partnerships, Licensing, SEC filing, 10-K, Financial results, Adjusted EBITDA, Share repurchase, Dividends, Debt, Acquisitions, Corporate governance, Risk management, Cybersecurity, Litigation, Talent