TKO Group at Goldman Sachs conference: cash flow and growth push By Investing.com

On Tuesday, 08 September 2026, TKO Group Holdings (TKO) used the Goldman Sachs Communacopia + Technology Conference 2026 to present itself as a larger, more profitable sports and entertainment platform after the UFC-WWE merger. President and COO Mark Shapiro said the company is benefiting from stronger margins, lower leverage and rising free cash flow, while also facing the usual pressures of live sports: talent costs, event timing and uneven quarter-to-quarter growth. Shapiro said TKO is now built to expand across media rights, live events, partnerships and premium experiences, with a growing international footprint and a capital return program that includes dividends and aggressive share buybacks. He also said the company sees sports as a durable category in an AI-heavy media market, but acknowledged that some revenue streams remain lumpy and that 2027 will not have the lift from events such as the Olympics and World Cup. Shapiro said TKO's financial profile has improved sharply since the UFC-WWE combination closed three years ago. He described the company as a strong cash generator with room for further margin gains. He added that TKO is aiming for $1.2 billion in global partnerships revenue by 2030 and $380 million to $420 million in financial incentive packages. The company also said it is not pursuing acquisitions at the moment, preferring to focus on execution and shareholder returns. With EBITDA reaching $1.62 billion over the last twelve months and a market cap of $35.4 billion, the company's financial scale supports its aggressive capital return strategy. According to an InvestingPro tip, management has been aggressively buying back shares, reinforcing the commitment Shapiro outlined. TKO said its core businesses are performing ahead of internal expectations, with live events, media rights and premium hospitality all contributing to growth. International expansion also accelerated. TKO said it closed recent media-rights deals in China, Japan, Korea, France and Canada, with average rights fees rising 1.7 times. In France, the UFC event sold out completely, with a first-time UFC fighter headlining the main event. The company's revenue reached $5.3 billion over the last twelve months with a gross profit margin of nearly 59%, providing ample resources to fund international growth initiatives. On the live-events side, the company said premium hospitality remains strong, especially among fans who attend only one to five events a year and want more personalized experiences. PBR is also seeing more sellouts than in the past five years. On Location, TKO's premium experiences business, now represents about 5% of total company revenue. The unit renewed long-term deals with the NFL, Super Bowl, NFL Draft, NCAA and Final Four through 2029. Management said the Los Angeles 2028 Olympics are ahead of plan, helped by the success of the Paris Games and Milano Cortina 2026, while the World Cup has also outperformed early expectations. Management said media rights remain one of the company's strongest growth engines, with each major property gaining visibility and commercial value. Shapiro said ad inventory is beginning to monetize more effectively, with higher CPMs and stronger volume. He said the company is moving from a model where it had to 'call out' to advertisers to one where advertisers are now calling TKO. WWE partnership revenue is expected to rise more than 20% for the full year, even though growth in the first and second quarters was only 2% and 8%. Management said the back half should improve as event timing, domestic cadence and broader package sales kick in. A planned Disney partnership for special WWE events is aimed at family audiences and is expected to begin in 2027. TKO also discussed the talent pipeline that supports both UFC and WWE. Management said the company continues to invest in development centers and recruitment. Shapiro said the company continues to attract top talent even as some marquee names retire or are sidelined by injuries. He said margin expansion can continue even with ongoing investment in talent. TKO gave an update on Zuffa Boxing, its new boxing venture, which management said is off to a strong start. Shapiro said Zuffa could become the 'next WWE' because of boxing's global fan base and the appeal of a more organized league structure. He said undercard fighters will be used to build profiles around the bigger super fights. Looking ahead, TKO said it expects 2027 to be stronger than current market expectations, even without the Olympics and World Cup. Management said growth should come from better products, broader reach and higher engagement. The optimism appears supported by fundamentals: InvestingPro analysis suggests the stock is currently undervalued, with two analysts recently revising their earnings estimates upward for the upcoming period. The company's shares, trading at $188.47, appear on InvestingPro's Most Undervalued list, and investors can access a comprehensive Pro Research Report that breaks down TKO's valuation, growth prospects, and competitive position through intuitive visuals and expert analysis. Shapiro said the company is positioned across more than 200 countries and has nearly 1 billion social media followers. He said live sports offer a kind of 'anti-AI' moat because fans want to watch events in real time and share them with others. He also said the Middle East remains a strong market, with demand for live events 'outstripping supply.' WrestleMania is set to move to Saudi Arabia in 2025, and management said it could announce two or more additional events in the region this year. During the question-and-answer session, Shapiro repeated that the Paramount+ relationship is the company's most important media-rights success. He said UFC helps drive both acquisition and retention on the service. Shapiro also said TKO's structure gives it an advantage because it controls the league, the teams, the participants and the partners. He said that integrated model is different from single-asset ownership and helps the company manage the full commercial cycle. TKO said it enters the next phase of its growth with stronger margins, lower debt and a wider global footprint, while still leaning on live events and media rights for expansion. InvestingPro offers 10 additional exclusive tips on TKO, along with detailed financial health scores and Fair Value analysis for investors seeking deeper insights. Readers can refer to the full transcript below for more detail on the company's remarks and outlook. Moderator: All right, great. Thanks everyone for taking the time to join us today. Welcome everyone to the Communacopia + Technology Conference. My name is Stephen Laszczyk, and I am the lead entertainment analyst here at Goldman Sachs. We are excited to welcome back to the conference Mark Shapiro, the President and COO of TKO Group Holdings. Mark, thanks for being with us today. Mark Shapiro, President and COO, TKO Group Holdings: Thanks for having me, Stephen. The day after Labor Day. Thank you. Moderator: Happy to have you. Mark, it's hard to believe it's already been 3 years since TKO Group has become a company. Over that time, you've executed against a number of opportunities you've identified at the point of the original transaction between UFC and WWE, including media rights renewals, sponsorship integrations, driving efficiencies across the cost structure. As you look ahead, what do you see as the next chapter of growth for TKO Group now that many of those things have been executed on, and what are the top priorities and top focus areas you as a management team are focused on? Mark Shapiro, President and COO, TKO Group Holdings: Look, it's been a whirlwind the 3 years, that's for sure. I think we clearly have benefited/capitalized on some strong secular tailwinds. We sit squarely in the center of a growing ecosystem across sports, entertainment, and really live events. Any which way you slice it, when you look at our company, I think first from a financial profile, and then from a fan composition standpoint, it's a strong profile. It's robust, in many ways bulletproof, given where the market is going and where the environment is going when it comes to content and live events. We're sitting here with strong margins. This year, we'll be up 600 basis points at the midpoint of our guidance to 39.6%, and we will get further expansion in the years to come. We have a very healthy leverage ratio, we'll be below 2x by the end of the year. We're a geyser for cash, and that will just increase in the years to come. Our free cash flow conversion normalized is 60% plus. Real strong operating leverage, best-in-class operating teams, and we're number one in each of our sport properties. In professional wrestling, WWE is number one. In combat sports, UFC is by far number one. PBR, number one, albeit smaller, in bull riding across the globe. Our sports are more and more becoming globalized. We're going into new countries, new territories. We're in over 200 countries with our content, and we have almost a billion social followers. So real strong currency on that front. We're also a year of execution. We've stayed true to our word that we are going to spend this year improving our product, improving our content, improving our reach, improving our engagement, working with our new media partners with some extraordinary deals, and capitalize and execute on that. We put out a guide to 2030 for our global partnerships that we'll do $1.2 billion across our properties. Of course, financial incentive packages are also another strong revenue generator for us, and we've put out a guide that we'll do in the frame of $380 million-$420 million. Remember, what we do on financial incentive packages is we go territory to territory and see where it's best to bring our product, both for our brand and our audience, but also for the deal, and through in-kind and often cash because of the economic impact we bring to those territories, cities line up to have our events there, and we're trying to capitalize on that. I would say, finally, that we're good stewards of capital, and we are uniquely and laser-focused on returning capital to shareholders, albeit through the dividend and the way we've obviously expanded that, and of course, by buying back stock. We are in the market every day right now buying back stock. We believe in the story, and we think among the stories and narratives in sports and entertainment, you'd be hard-pressed to find really, and I say this with all humility, a rocket ship like TKO. Moderator: It's a great setup. I want to dig into each of those parts a little bit more, maybe starting first with the media rights. UFC and WWE now operate with new media rights partners. You have Paramount, you have Netflix, you have ESPN. Can you maybe talk a little bit about how those newer media rights partnerships have evolved over the first year or two of being together? Where are there still opportunities to improve engagement and improve monetization? Mark Shapiro, President and COO, TKO Group Holdings: Yeah, look, we're blessed with the media rights deals we have. Tremendous partners across the board. USA Network's been with us forever. Obviously, they're part of Versa now. Netflix, monster ad. We're top 10 in several countries every week with Raw. Of course, Paramount+ is a massive deal and growing and giving us great exposure globally, and they're more and more launching in different territories internationally. Then, of course, ESPN or WWE and our PLEs are there. What I would say is, look, Paramount, let's start there because that's our bread and butter, if you will. First of all, they're just a terrific partner. They may be a bigger company, which we didn't plan on, with more platforms in the months to come, depending on how that negotiation goes. But you go to their platform, you go to Paramount+, and you see we are front and center. We're not an oh, by the way. We're a focus. We're a focal point for them, lined up right next to Lioness, which is Taylor Sheridan's big hit and doing extremely well this year. So you can't miss UFC, whether it's long-form or live on Paramount+. It's been a big hit. We're driving acquisition, we're driving retention, and we're seeing terrific engagement. 25% of the viewers that watch Paramount+ also watch UFC. But our fans, the viewer for UFC, is 15 years younger than the average viewer consumer that watches Paramount+ on a regular basis. The live event, of course, we had in Washington, D.C., for our country's anniversary birthday celebration, is the biggest live event ever on the platform. So that's been a real winner for us. We'll keep driving that. Of course, Paramount+ is a bigger partner that we have a PBR deal with them, we have Zuffa Boxing with them, so we're all in on them. When you look at ESPN, the PLEs are performing well, but soon to get a lot better because they've recently announced a new carriage deal with YouTube TV, which will be big for our fan base, big for our audience, big for our brand, big for our reach, and will certainly increase engagement. What I would say about both these companies, they're among the best marketers in the world when it comes to content. We love our neighbors on Paramount+ and CBS, Masters and the NFL, and of course, ESPN. Just take a look at this weekend. No better example. ESPN Unlimited was out of this world this past weekend. College football launched, and you go to ESPN+ and you just have a plethora, an abundance of games on top of everything else they have, like the US Open. Of course, the NFL launches this week. We're in a really good position, and we're working with each of those platforms every single day on storylines and building stars. The last thing I would say, Stephen, which I know is important to you, is on the international front. We don't break out international numbers specifically, and frankly, the media revenue we do internationally is tiny compared to our domestic deals. Having said that, this year alone, we've closed China, Japan, Korea, France, and Canada. The average uptake increase on our rights fee from those five deals alone was a 1.7 step-up. Even though that's small, and again, you have to proportionalize that with our domestic deals, what it does is it drives the brand, it drives the audience. It ultimately supports and enhances financial incentive packages we are offered, and global partnerships really drives that. This past weekend, we had a massive event in France. Total sellout. Sold a lot of great local partnerships across France to add to the global deals that we bring in there. I would also tell you, look no further than the outcome, right? We had a card that had a majority of finishes, and the main event was headlined by a first-time fighter. First time in the UFC. Now granted, he was French-born, but we sold out based on a fighter that was fighting for the first time in a main event. That's never happened before. We are strong in kicking, and Dana White and his team are second to none. Moderator: Maybe to touch on sponsorship for a moment. You've outlined ambitions to reach $1.2 billion of sponsorship revenue by 2030. I guess, as you both think back and think ahead, where have you been the most successful on the sponsorship front? As you look ahead, where do you still see the largest long-term opportunity across the portfolio? Is it within a particular vertical, or is it on one side of the house, UFC versus WWE? Mark Shapiro, President and COO, TKO Group Holdings: I think- Moderator: Either than the other. Mark Shapiro, President and COO, TKO Group Holdings: Yeah. I think strategically, we have been very transparent in terms of detailing our journey in the global partnerships front. If you recall, when we cut the new WWE deal with ESPN and the new UFC deal with Paramount+, we negotiated and ultimately received a good amount of ad inventory. For the first time, we're selling media. We're selling 30-second spots. We told the investor community, "Hey, give us some time. We need to build the team. We need to build a programmatic platform. And we also don't want to get out in front of Paramount+." Now we're well into the deal, and we're beginning to see real traction on the ad inventory front, on the CPMs and the volume. The reach has been strong. The engagement's been strong. And frankly, it's becoming more of a call us versus us calling out. We are going to have an Investor Day at the end of Q1, just post-earnings, I would say. At that time, if we continue tracking on this front, on global partnerships and ad inventory the way it's going, we are going to revisit that $1.2 billion by 2030. We're feeling really good about where that's going, and we're working well with our partners, and we're seeing all kinds of different new categories open up to us. I do want to focus on WWE for a second because, to your point, where do we see the real upside? There's been a lot written about WWE and, hey, are they getting the same kind of traction they're getting in the UFC? Is it decelerating, quote unquote? And there's nothing wrong with those questions because we haven't provided that detail. What I would tell you is the reason why you're mostly seeing some skepticism is because our ad dollars, our partnership revenue for Q1 and Q2 were up 2% and 8%, respectively, versus last year. This is after being up almost 92%, going from 2024 to 2025. So folks are saying, "Hey, is it slowing down? Are they not getting the traction? Is it not selling through?" Couldn't be farther from the truth. The fact is we have a lot of international events in the first half of the year, and that slowed us down. I will tell you that for the year, WWE partnership alone will be up in excess of 20% versus last year. What that means is we're going to have a big back end of the year for WWE. By the way, that's with having three fewer events in the third quarter. Moderator: Is there a particular thing that's driving that acceleration in the back half of the year? New sponsorship? Sign-ins that happen midway? Is it the cadence of the slate and the mix shift in the slate? Mark Shapiro, President and COO, TKO Group Holdings: Exactly. It's all of that. It's just timing of when some of these deals actually take up. It's having more domestic events for them to kind of plow into. It's holistic packages that we're selling with ad inventory in them, and frankly, we're scoring on the family-first message. Remember, WWE is a different audience than the UFC, and when it comes to going after families, that's our audience, and I think advertisers are starting to see that. Frankly, I'm excited for 2027 because we're working with The Walt Disney Company on some special events around Disney and WWE and bringing those two audiences together since, of course, what do they have in common? Family. Moderator: One of the other big opportunities you've highlighted is on the live event side, the Premium Live Events, the roughly two dozen or so between the WWE and the UFC. Could you talk a little bit about where we are in terms of the cycle of monetizing those events, both on the FIPs side of the house as well as in premium hospitality, which seems like there's no shortage of opportunity on that front at the moment. Mark Shapiro, President and COO, TKO Group Holdings: Yeah, no. On Location is having a day these days. Look, all I would say on that is you have our guide, and we will certainly get into more detail at Investor Day. Live events are hot. Sports is piping hot, and it is not slowing down anytime soon. Why is that? Sports is real-time. Sports is unpredictable. Sports is physical. You cannot turn away for it. It is appointment viewing. When you put sports on your calendar, your personal calendar, you are putting it in ink. These are big headline events that fans line up for. I would also tell you that live events are the infrastructure for premium in a digitized world. Beyond that, social platforms have really turned live events into broadcast stages for personal identity. Attendance is a social currency, and we are capturing that, and we are seeing that in our business. We are ahead of our internal forecast on live events. We are seeing volume across the board. PBR is having more sellouts than it has had in the last five years alone. We are getting yield. It has really been a good story for us. Obviously, still a lot of wood to chop. Remember, we do not always bring our events to where we are going to get maximum profitability. Do not get me wrong, that might sound like a bad business strategy, but we have to balance the two. We need to go to cities and territories where, yes, they are going to be the most profitable from a global partnerships, from a live event ticket sales perspective, premium hospitality, year points, financial incentive packages. We also need to go to cities that we either have a strong fan base and they need to be able to touch the product, or we are growing the product, the content, the fighters, the superstars in territories where we think there is real upside. France was a real example of that with the UFC this past weekend. Moderator: One of the areas of the world we are particularly getting questions on at the moment is the Middle East, and I think that is both for the volatility Mark Shapiro, President and COO, TKO Group Holdings: Right Moderator: in the region as well as you look out into next year's slate, in particular on the WWE side of the house, with WrestleMania moving over into the region. Could you talk a little bit about the opportunity in the Middle East, maybe how you see the cadence of events evolving over the near to medium term, and then the opportunity as it relates to next year? Mark Shapiro, President and COO, TKO Group Holdings: Yeah. Obviously nothing bigger next year than WrestleMania being in Saudi Arabia, which will be one to remember and one not to miss. Of course, our partners in Saudi bring the UFC and WWE to their region because they're trying to draw attendance from not just around the globe, but certainly in the Middle East. All I would tell you is when it comes to the Middle East, despite what's going on, despite how much longer that may go on, they're open for business. In fact, I would tell you they're more hungry to bring live events, not just sports, but concerts to the Middle East to show the world and tourism and fans that they're open for business and they're not slowing down. We've stayed on track with our events for this year. We still have two more events this year. We may actually announce a couple more this year. That's how much demand we're seeing, and I think that's ultimately the headline among the headlines when it comes to TKO and where we sit in the sports entertainment ecosystem. Demand is outstripping supply. Moderator: One of the other questions we get on the live events business, more on the week-to-week side of the house, is around the performance of gate the past six or so months. Could you maybe just talk a little bit about what you're seeing at the gate side week to week and some of the medium rung events that you host? Maybe think a little bit more broadly or talk to us about how you think a little bit more broadly about balancing things like pricing and volume on that front. Mark Shapiro, President and COO, TKO Group Holdings: Yeah. I think we've covered a good amount of that. At the end of the day, as I said, we're ahead of internal forecasts. We have clear price elasticity. Sell-offs have been strong across all of our properties, including Zuffa Boxing, where we've staged 10 events. We mostly do them, Stephen, at the Apex in Las Vegas. But where we have taken the show on the road 3 times, it's been sell-offs, and that's for a new property, right? Zuffa Boxing is just getting introduced to the average sports consumer around the globe. So we're pleased with where we sit, and more importantly, it's not just that they want to buy tickets and that that business is healthy, it's that the premium hospitality is so strong. Because when we talk about premium hospitality, most investors, and I think the press focus on the 1%, that they just imagine, oh, the 1% wants those special goodies. That's not what's happening. What's happening is the average sports fan who's going to go to 1 to 5 events per year wants to make those experiences count for them and whomever they're bringing, friend or family. They want front-of-the-line access. They want personalization. They want customization. That's why On Location really sits in an enviable position. We're coming off a very strong Milano Cortina 2026, a very strong World Cup. It's been a contributor to the beat and raise that we gave for the full year following Q2 earnings. Now, we would've still done that beat and raise without On Location's performance at World Cup, but certainly that was a contributor. Remember, when we went into the World Cup, all you were reading about was tickets aren't selling, hotels are empty. It's not living up to its promise. I think it more than delivered by the time we got to the end. Now, we benefited from the big players like Argentina getting to the finals, et cetera, and the U.S. doing so well, but that's the business. I think it took the country by storm, and I think the FIFA Women's World Cup will do the same thing next year. Moderator: Yep. Talent's the lifeblood of WWE and UFC. You've recently had some marquee talent retire- on both sides of the house. John Cena on WWE, Conor McGregor, not retired, but working through an injury. Could you talk a little bit about how you're approaching talent development on both sides Mark Shapiro, President and COO, TKO Group Holdings: Yeah Moderator: of the business and maybe even taking a step back, thinking about the financial implications of this as your largest expense, Mark Shapiro, President and COO, TKO Group Holdings: That's right. Moderator: how you're thinking about balancing talent expense and maybe the marketing support that goes behind marketing the talent? Mark Shapiro, President and COO, TKO Group Holdings: Let's talk about the pay for the superstars and our fighters first. What I would tell you is post our new deals with ESPN on WWE and with Paramount+, CBS, Peacock, Sky with UFC, and even a little bit post Raw with Netflix, we did resize our fighter and superstar pay composition. That is baked into our numbers. So there will be no further adverse impact with regard to how that plays out or divvies out. We're confident with where we sit. We have 600 fighters as an example in our stable at the UFC. We do, to your point, really rely on development. Keep in mind that when you look at the WWE, 75% of the superstars come from NXT. So they're starting in our development league and going all the way up. So pipeline is very important to our strategy. On the UFC front, we've really capitalized on the investments of our performance centers in Mexico City and Vegas, and particularly China. We're really getting real traction. So that's a big part of our strategy. It will continue to be a big part of our strategy, and we will continue to be aggressive in other monetization opportunities for both our superstars and our UFC fighters with regard to advertiser deals, marketing partnerships, bonuses through the fight card in terms of finishes and fight of the night. What you see is you see the best of the best signing up and lining up to be a part of the UFC and to be a part of WWE. So that's something we always watch out for and we want to make sure that we're really spreading the opportunities, but the strategy's working. Moderator: Yep. Mark Shapiro, President and COO, TKO Group Holdings: Our margins will continue to expand. Moderator: You touched on it earlier, want to follow up on On Location and the premium experience opportunity ahead of you. On Location had a big year this year with the Olympics and World Cup, as you mentioned. Could you maybe, just for investors, debrief on what you learned from this past year with On Location, how you're taking those learnings into the next couple of years ahead of LA 2028 Moderator: and ultimately how you're feeling stepping into the LA 2028 cycle? Mark Shapiro, President and COO, TKO Group Holdings: Yeah. Look, first I want to remind everyone that On Location is 5% of our business, just to be clear. Because a lot gets written about On Location because of the lumpiness of, oh, you have an Olympics this year and you don't have an Olympics next year. It's 5%. The engines of TKO will always remain UFC and WWE. PBR will be a contributor, On Location will be a contributor, IMG will be increasingly a contributor, certainly to the platform and the strategy. Zuffa Boxing will be strong in the years to come, and we're really excited about the potential there. What I would just say on this is that you look at 2027, and we'll have more details on our 2027 guidance in the first quarter when we do earnings and have our Investor Day. I think 2027 is going to be a lot stronger than what people think. That's because of what I've talked about, this momentum, this traction, live events, sports, where we sit as a leader in the space. One of the reasons why there's some question is, well, next year we won't have the Milano Cortina 2026, like you said. We won't have the World Cup. That's the ins and outs of the business. On Location is the leader in the space. We've recently renewed long-term all of our major property deals from the NFL and the Super Bowl and the NFL Draft to the NCAA and the Final Four through 2029. So we're sitting pretty with a strong portfolio. LA 2028 is off to the races well ahead of plan. I would just say that, look, that's being driven by the success of the Paris Games from an Olympic standpoint and the viewership and engagement that the IOC had. Then, of course, that continued with Milano Cortina 2026 and the U.S.'s performance there, which was a big driver and contributor and of course, the World Cup. These U.S. flag events are our major calendar appointment viewing and appearance events for the sports fan. We're going to continue to benefit from that. Just keep in mind, this is a long-term story. We're a growth story. So while you won't benefit from having Milano Cortina 2026 and World Cup in 2027, and we'll have a pre-spend on our LA28 Games, LA28 will be a monster property for us, and it's a long-term growth story, and all the while, we'll continue returning capital to shareholders. We'll continue really, as I said, as a cash geyser for the investor community and our shareholders. Our margins will continue expanding, and we'll continue to run a lean operation. So it's a multi-year strategy, and that's why we believe now is the right time for an Investor Day because we want to lay out a multi-year look to really get you under the hood. Moderator: Maybe not to get too ahead of the Investor Day and how you think about the long-term growth algo. But as you do look out over the next couple of years, and this is a debate point on the stock, is in terms of what the drivers of growth will be post the meteorite step-ups that we've seen come into effect this year. Any things to call out either on the revenue side or you mentioned margins earlier, the opportunity potentially for some operating leverage coming in 2027 and then maybe that continuing in out years? Mark Shapiro, President and COO, TKO Group Holdings: No, I think overall it's a simplistic story. You've got a guide for global partnerships that I mentioned we'll revisit as long as we keep tracking the way we are. You've got a guide for FIPs. You've got to believe that live events and the ticket sales and premium hospitality that follows that will remain robust for years to come, that we are anti-AI. Sports is one of those areas, genres of content, carriers that ultimately builds a moat in front of AI. You want to see it live. You want to be a part of it. You want to share it with your friends. You want snackable content, and everyone suffers from FOMO, especially the young viewers and audiences that watch and line up to see our product. If you believe that's going to continue to drive, especially as AI democratizes content, and I believe increases the scarcity of what we offer, then you're going to be sitting in a good place. We'll continue to be laser-focused on keeping our leverage nice and tight and low. We'll continue to drive margin expansion. We'll continue to deliver more free cash flow. We'll continue, as I said, to deliver and return capital to shareholders. It's a good story. The fact that we have Zuffa Boxing coming up the ranks, that could potentially be the next WWE for us, given the history of boxing, given the demand for boxing, given how many fans are out there globally that are looking for someone to come in and get their arms around boxing and turn it around and clean it up, it puts us in a good position. Moderator: Yeah. I wanted to touch on the opportunity at Zuffa. It's been about 9 months since the league had its first fight. Could you maybe talk about the key learnings in that period of time? What's worked? Where are you looking to improve? As you look ahead to years 2 and 3, where are you looking to take the league? Mark Shapiro, President and COO, TKO Group Holdings: Look, we've signed up 100 fighters already. We've staged 10 events. We have media deals with PS Sky and with Sky. We've come out of the gate strong. 3 sellouts, as I mentioned, when you come out of the apex. A massive event this weekend, which is Garcia vs. Benavidez Jr., which is taking place in Las Vegas, and it's really a dual strategy. It's our own league with our own fighters competing in various weight classes for belts in a narrative that you can easily get your arms around and understand. Ultimately, we believe going to be better for the health of the sport and fighters overall. At the same time, TKO is working with our partners in Saudi to stage 2 to 3 super fights per year, which is what's happening this weekend. In that relationship, TKO is paid to negotiate media rights to promote the event with Dana White and Nick Khan doing what they do, and of course, sometimes to sell global partnerships as part of the package. TKO is set up to do that because the platform's there. These are levers that we just flip the switch. We'll keep riding the dual strategy, building Zuffa Boxing and building firm value with our partners at Saudi and earning into our equity and one day majority. On the flip side, running these major super fights that allow us to promote the Zuffa brand and often on the undercard, fighters from the Zuffa Boxing Organization. It ultimately enhances their profiles and helps us build some superstars. Moderator: Yep. I want to touch on capital allocation before we finish up here. Two themes, M&A, and then also as you mentioned, capital returns and the balance between the both. On the M&A side, premium sports valuations continue to increase. We've seen no shortage of headlines on the team front the last couple of weeks and months. Would love just to get your latest thoughts on what you're seeing out in the marketplace for sports media assets today. Maybe for you specifically, what's your appetite to engage? Mark Shapiro, President and COO, TKO Group Holdings: Sports unifies us, and sports is a unicorn. Since my days at ESPN, I'm becoming an old man now, that's the most popular question I always get. Have we hit the ceiling on sports media rights? Have we hit the ceiling on sports valuations? The answer continues to be no, as most recently evidenced by the Los Angeles Lakers deal. $12.5 billion a year after $10 billion that Mark Walter paid. It's scarcity. It's demand outstripping supply. It's strong brands. It's historical equity. It's rivalries and players that fans have cheered on or cheered against for decades. What I would tell you is, I believe these deals are continuing to rise and will continue to rise because, further, you can't get your hands on them. For some folks, they're trophy assets. For some folks, they've got money burning a hole in their pocket. What a better way to spend their money to cheer on and build their team, maybe a part of an organization they grew up in, and most likely handed down as a family heirloom. That's not going to change anytime soon. Moderator: As it relates to TKO and maybe your interest or the types of characteristics or the attributes that you look for in a potential target asset to go out and acquire. Mark Shapiro, President and COO, TKO Group Holdings: That's why when you look at these valuations, well, then what's the valuation, obviously we're public, so you can figure that out, for when you have it all? You don't just have the team, you have the league. You control the teams, the league, the participants, the partners. The entire holistic cycle is in your hands. That's what we have. We are the commissioner, the league, the owner all in one, and it allows us to put on the best fights and put on the match-ups you want to see and stage these events in the cities that are most hungry to have them there. Moderator: Any leagues in particular that stand out to you at the moment? Mark Shapiro, President and COO, TKO Group Holdings: I wish. There's nothing at the moment that's out there for sale. By the way, we're true to our word. We take transparency incredibly seriously, and it's a priority at our company. We are focused on a year of execution. We're doing just that. We are not hunting for leagues. We are not hunting for properties. We're big believers in that as a management team, but also our board is very supportive of that direction. Moderator: Just last question on free cash flow leverage and capital returns, balance sheet in a great position. You mentioned the cash conversion earlier. You're in the market buying back stock. How should investors think about that progressing over the coming quarters, coming years? Is there appetite to extend the ASR past the $2 billion that I believe is out there today? Mark Shapiro, President and COO, TKO Group Holdings: No announcements today, but clearly one of the reasons we've been so aggressive in such a short time, and we're well ahead of what we forecasted on capital return and buybacks. We've added and increased because we think there's a dislocation in the stock, and we're happy to buy back stock that we think is cheap. Moderator: Mark, we'll have to leave it there. Thank you very much. Mark Shapiro, President and COO, TKO Group Holdings: Thank you so much, Stephen. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.