Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-40373 ENDEAVOR GROUP HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware 83-3340169 (State or ...

Financial Data and Key Metrics Changes - For Q4 2021, the company generated $1.5 billion in consolidated revenue, up $545 million or 57% year-over-year [20] - Adjusted EBITDA for Q4 was $229.5 million, an increase of $57 million or 33% [20] - For the full year 2021, revenue reached $5.1 billion, up $1.6 billion or 46%, while adjusted EBITDA was $880.3 million, up $308 million or 54% [20] Business Segment Data and Key Metrics Changes - Owned Sports Properties segment revenue was $277.3 million in Q4, up $8.3 million or 3%, with adjusted EBITDA of $125.1 million, up $2 million or 2% [21] - Events, Experiences & Rights segment reported revenue of $516.7 million in Q4, up $96 million or 23%, and adjusted EBITDA of $54.7 million, up 29% [25] - Representation segment revenue was $717.9 million in Q4, an increase of $443.2 million or 161%, with adjusted EBITDA of $118.4 million, up 141% [27] Market Data and Key Metrics Changes - UFC had its best financial year in its 28-year history, with revenue up 30% year-over-year and all Pay-Per-View events sold out [22][23] - The PBR World Finals saw revenue increases of over 160% compared to the prior year [24] - The IMG Arena sports betting business renewed over 200 content deals with sportsbooks during the year [26] Company Strategy and Development Direction - The company aims to capitalize on secular trends in premium content, media rights, sports betting, and live events [8][12] - The acquisition of OpenBet is expected to enhance the sports betting offering and create new revenue synergies [10][35] - The company is focused on being distribution-agnostic and leveraging its diverse portfolio to meet the growing demand for sports and entertainment content [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the diversified business and the durability of the long-term strategy [17] - The company anticipates continued growth driven by contractual growth in media rights, sponsorship, and a return to live events [33] - Management highlighted the positive trends in consumer demand for events, indicating high attendance and sales [74] Other Important Information - The company ended the year with $5.7 billion in debt and approximately $1.6 billion in cash, resulting in $4.1 billion in net debt [29] - The guidance for 2022 includes expected revenue between $5.2 billion and $5.45 billion, with adjusted EBITDA expected to be between $1.07 billion and $1.12 billion [31] Q&A Session Summary Question: UFC domestic rights negotiations - Management feels positive about the UFC's position and relationship with Disney/ESPN, with no immediate need to negotiate [39] Question: On Location demand trends - Management reported that On Location had a hugely successful Super Bowl, indicating strong demand for hospitality services [41] Question: International media rights renewals for UFC - Management noted strong growth in international rights, with a 94% increase in AAV over the last 14 deals since Q2 2021 [43] Question: Impact of Russia/Ukraine exposure - Management expects less than a 2% impact on adjusted EBITDA from the situation, which has been incorporated into guidance [45] Question: Agency business growth and revenue visibility - Management indicated that the agency business is expected to grow, with no pull forward in revenue and strong demand for content [47][48] Question: Financial impacts of the Olympics deal - Management expects ramp-up costs in 2022 and 2023, with revenue recognition starting in 2024 [54] Question: M&A appetite and deal pipeline - Management remains focused on M&A opportunities across various verticals, including sports properties and betting [55] Question: Emerging media forms and their impact - Management highlighted significant growth in podcasting and NFTs, viewing them as integral to the future content landscape [57] Question: Sports betting opportunities - Management sees a global opportunity in sports betting, especially with the integration of OpenBet and IMG Arena [59]

Part I [Business Overview](index=7&type=section&id=Item%201.%20Business) Endeavor Group Holdings, Inc. is a global sports and entertainment company operating across three segments: Owned Sports Properties, Events, Experiences & Rights, and Representation - The company operates through **three primary business segments**: Owned Sports Properties, Events, Experiences & Rights, and Representation[16](index=16&type=chunk) - The Owned Sports Properties segment includes premier assets like the **Ultimate Fighting Championship (UFC)**, Professional Bull Riders (PBR), a strategic partnership with Euroleague, and several Professional Development League (PDL) baseball clubs[18](index=18&type=chunk)[123](index=123&type=chunk) - The Events, Experiences & Rights segment owns, operates, or represents over **800 events annually**, manages the IMG Academy, and is a major global distributor of sports media rights, also including IMG ARENA sports betting and Endeavor Streaming businesses[19](index=19&type=chunk)[124](index=124&type=chunk) - The Representation segment includes the WME talent agency, **160over90 marketing services**, and IMG Licensing, which was ranked **No. 1 by License Global magazine in 2021** based on nearly **$15 billion in total retail sales**[19](index=19&type=chunk)[125](index=125&type=chunk) - Growth strategies include leveraging its integrated platform for global expansion, expanding experiential offerings, investing in high-growth adjacent industries, and pursuing strategic mergers and acquisitions[26](index=26&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) - As of December 31, 2021, Endeavor had approximately **7,700 employees** across **29 countries**[34](index=34&type=chunk) [Risk Factors](index=13&type=section&id=Item%201A.%20Risk%20Factors) The company faces substantial risks from changing consumer preferences, reliance on discretionary spending, significant indebtedness, and concentrated voting control - The business is highly sensitive to changes in consumer tastes, discretionary spending, and the ongoing impact of the COVID-19 pandemic, which could reduce demand for its services and content[45](index=45&type=chunk)[46](index=46&type=chunk)[48](index=48&type=chunk) - Success depends on relationships of agents and key personnel with clients, and the ability to identify, sign, and retain talent, with loss of key personnel or clients adversely affecting the business[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) - Potential conflicts of interest arise from the breadth of its platform, such as representing talent while owning sports properties, exemplified by a dispute with the MLB Players' Association regarding PDL Clubs[53](index=53&type=chunk) - As of December 31, 2021, the company had **$5.6 billion in outstanding indebtedness** under its Senior Credit Facilities, potentially limiting financial flexibility and requiring substantial cash flow for debt service[80](index=80&type=chunk)[81](index=81&type=chunk) - The company is controlled by Messrs. Emanuel and Whitesell, Executive Holdcos, and the Silver Lake Equityholders, who collectively control approximately **89.1% of the combined voting power** as of December 31, 2021, potentially leading to actions differing from public stockholders' interests[79](index=79&type=chunk) - The company is required to pay certain pre-IPO investors **85% of cash tax savings** from favorable tax attributes acquired in connection with the IPO, with these payments under tax receivable agreements potentially being significant[85](index=85&type=chunk)[87](index=87&type=chunk) - UFC is named in **five related class-action lawsuits** alleging monopolization of the market for elite professional MMA fighters' services, which could result in material liability[76](index=76&type=chunk) [Unresolved Staff Comments](index=35&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[111](index=111&type=chunk) [Properties](index=35&type=section&id=Item%202.%20Properties) The company's significant properties include leased corporate offices in major cities and owned facilities like a multi-sport academy and studios Significant Corporate and Other Facilities (as of Dec 31, 2021) | Location | General Character | Segments Utilizing Facility | | :--- | :--- | :--- | | Beverly Hills, CA | Corporate offices | Representation; Corporate | | New York, NY | Corporate offices | Events, Experiences & Rights; Representation; Owned Sports Properties; Corporate | | Las Vegas, NV | Corporate offices and studios (Owned) | Owned Sports Properties | | London, England | Corporate offices and studios | Events, Experiences & Rights; Representation; Owned Sports Properties; Corporate | | Bradenton, FL | Multi-sports academy (Owned) | Events, Experiences & Rights | [Legal Proceedings](index=36&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various claims and legal proceedings in the ordinary course of business, with details provided in Note 22 of its financial statements - The company directs readers to Note 22, "Commitments and Contingencies," in the financial statements for a description of its legal proceedings[114](index=114&type=chunk) [Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[114](index=114&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=36&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's Class A common stock trades on the NYSE under "EDR", with no anticipated cash dividends as earnings are retained for growth - The company's Class A common stock is listed on the NYSE under the symbol "**EDR**"[114](index=114&type=chunk) - The company does not anticipate declaring or paying cash dividends in the foreseeable future, intending to retain earnings to finance business growth[115](index=115&type=chunk) - Endeavor Operating Company is expected to make tax distributions to its members to cover their allocable share of taxable income[115](index=115&type=chunk) - The company did not repurchase any shares of its Class A common stock during the three months ended December 31, 2021[117](index=117&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2021, Endeavor's revenue increased by **46.0% to $5.1 billion**, driven by a strong rebound and strategic acquisitions, despite reporting a net loss of **$467.5 million** Consolidated Results of Operations (in thousands) | Metric | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | **Revenue** | **$5,077,713** | **$3,478,743** | **$4,570,970** | | Operating (loss) income | ($22,240) | ($153,218) | $210,536 | | **Net loss** | **($467,479)** | **($625,318)** | **($530,661)** | | Net loss attributable to EGH | ($296,625) | N/A | N/A | Revenue by Segment (in thousands) | Segment | 2021 Revenue | 2020 Revenue | % Change | | :--- | :--- | :--- | :--- | | Owned Sports Properties | $1,108,207 | $952,624 | 16.3% | | Events, Experiences & Rights | $2,031,283 | $1,593,509 | 27.5% | | Representation | $1,959,757 | $943,873 | 107.6% | | **Total Revenue** | **$5,077,713** | **$3,478,743** | **46.0%** | Adjusted EBITDA by Segment (in thousands) | Segment | 2021 Adj. EBITDA | 2020 Adj. EBITDA | % Change | | :--- | :--- | :--- | :--- | | Owned Sports Properties | $537,627 | $457,589 | 17.5% | | Events, Experiences & Rights | $215,578 | $59,224 | 264.0% | | Representation | $383,388 | $211,977 | 80.9% | | **Total Adjusted EBITDA** | **$880,316** | **$572,547** | **53.7%** | - In 2021, the company completed the full buyout of UFC Parent, making it a wholly-owned entity and eliminating non-controlling interest related to UFC from its financial statements[129](index=129&type=chunk) - As of December 31, 2021, the company had **$5.6 billion in outstanding debt** under its Senior Credit Facilities and approximately **$381 million in available borrowing capacity**[157](index=157&type=chunk) - The company has signed agreements to acquire the OpenBet business for **$1.2 billion** ($1.0B cash, $200M stock) and the Mutua Madrid Open tennis tournament for approximately **€360 million**, both expected to close in 2022[124](index=124&type=chunk)[125](index=125&type=chunk)[166](index=166&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=59&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate risk on its **$5.6 billion** variable-rate debt and foreign currency risk from international operations, mitigated by derivatives - The company is exposed to interest rate risk on its floating-rate debt; a **1% increase in effective interest rates** would increase annual interest expense by **$41 million**, holding debt levels constant from December 31, 2021[180](index=180&type=chunk) - Significant international operations, primarily in British Pound and Euro, expose the company to foreign currency risk; a hypothetical **10% appreciation of the U.S. dollar in 2021** would have decreased revenues by approximately **$121.2 million**[180](index=180&type=chunk) - The company uses derivative financial instruments, including interest rate swaps and foreign currency forward contracts, to hedge against potential adverse fluctuations in interest rates and foreign exchange rates[180](index=180&type=chunk) [Financial Statements and Supplementary Data](index=59&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section incorporates by reference the company's audited consolidated financial statements and supplementary data, beginning on page F-1 - The required financial statements for this item are located starting on page **F-1** of the report[181](index=181&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=59&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[182](index=182&type=chunk) [Controls and Procedures](index=60&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of December 31, 2021, with no material changes to internal controls reported for Q4 2021 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of December 31, 2021[183](index=183&type=chunk) - The report does not include a management assessment or auditor attestation on internal control over financial reporting, as permitted for newly public companies under an SEC transition period[183](index=183&type=chunk) - There were no material changes in internal control over financial reporting during the fourth quarter of 2021[184](index=184&type=chunk) [Other Information](index=60&type=section&id=Item%209B.%20Other%20Information) Director Elon Musk notified the company of his resignation from the board, effective June 30, 2022, not due to any disagreement - Elon Musk resigned from the board of directors, effective **June 30, 2022**, with his resignation not due to any disagreement with the company's operations, policies, or practices[185](index=185&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=60&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) This section provides biographical information for executive officers and directors, including CEO Ariel Emanuel and Executive Chairman Patrick Whitesell, and details the audit committee composition Key Executive Officers and Directors (as of March 16, 2022) | Name | Age | Position | | :--- | :--- | :--- | | Ariel Emanuel | 60 | Chief Executive Officer and Director | | Patrick Whitesell | 57 | Executive Chairman and Director | | Jason Lublin | 50 | Chief Financial Officer | | Mark Shapiro | 52 | President | | Egon Durban | 48 | Chairman of the Board of Directors | | Elon Musk | 50 | Director (Resigning June 30, 2022) | - The audit committee consists of Ursula Burns, Fawn Weaver, and Jacqueline Reses, with Jacqueline Reses serving as the chair, and Ms. Reses and Ms. Burns qualifying as "**audit committee financial experts**"[193](index=193&type=chunk) - The company has a Code of Conduct available on its investor relations website[194](index=194&type=chunk) [Executive Compensation](index=64&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation for 2021 was significantly impacted by the IPO, with a substantial portion of CEO and Executive Chairman pay tied to long-term stock price performance - A substantial portion of compensation for the CEO and Executive Chairman is at-risk and tied to long-term stock price performance through special performance stock unit (PSU) awards granted at the IPO[197](index=197&type=chunk)[219](index=219&type=chunk) - CEO Ariel Emanuel's PSU award grants shares valued at **$26.5 million** for each **$4.50 increase** in the stock price over the **$24 IPO price**, with the first milestone at **$28.50** achieved in 2021[197](index=197&type=chunk)[221](index=221&type=chunk) - Executive Chairman Patrick Whitesell's PSU award grants shares valued at **$100 million** for each **$25.00 increase** in the stock price over the **$24 IPO price**, with the first milestone at **$49.00**[197](index=197&type=chunk)[222](index=222&type=chunk) 2021 Summary Compensation Table (Select NEOs) | Name | Position | Salary ($) | Bonus ($) | Equity Awards ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | :--- | | Ariel Emanuel | Chief Executive Officer | 4,000,000 | 10,000,000 | 293,746,113 | 308,177,233 | | Patrick Whitesell | Executive Chairman | 4,000,000 | 5,000,000 | 113,958,091 | 123,101,284 | | Jason Lublin | Chief Financial Officer | 2,000,000 | 3,500,000 | 12,520,433 | 18,036,201 | | Mark Shapiro | President | 3,000,000 | 7,768,797 | 31,166,143 | 41,995,100 | - Employment agreements for all named executive officers provide for severance payments and benefits upon certain qualifying terminations of employment[225](index=225&type=chunk)[248](index=248&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=89&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) A small group of insiders, including Silver Lake affiliates and key executives, collectively control **89.3% of the combined voting power**, making Endeavor a "controlled company" Beneficial Ownership and Voting Power (as of March 4, 2022) | Beneficial Owner | Class A Common Stock Owned (fully exchanged basis) (%) | Combined Voting Power (%) | | :--- | :--- | :--- | | Silver Lake Equityholders | 38.5% | 68.6% | | Ariel Emanuel | 9.8% | 17.1% | | Patrick Whitesell | 9.1% | 16.6% | | **All directors and executive officers as a group** | **50.3%** | **89.3%** | - The ownership structure includes multiple classes of stock, with Class Y common stock carrying **20 votes per share** and Class A and Class X common stock each carrying **one vote per share**, concentrating control among Class Y holders[268](index=268&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=92&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) The company has a formal policy for reviewing related party transactions and is a "controlled company" due to concentrated voting power, exempting it from certain independence requirements - The company has a written policy for the review and approval of related person transactions by the Audit Committee[271](index=271&type=chunk) - A Stockholders Agreement with Messrs. Emanuel, Whitesell, and Silver Lake Equityholders governs board nominations and voting agreements, solidifying their control[277](index=277&type=chunk) - The company entered into Tax Receivable Agreements (TRAs) requiring it to pay **85% of realized cash tax savings** from certain tax attributes to pre-IPO investors[280](index=280&type=chunk) - The UFC Buyout involved acquiring the remaining interests in UFC Parent from other holders, including affiliates of Silver Lake and company executives, in exchange for cash, stock, and rights under the TRAs[282](index=282&type=chunk)[284](index=284&type=chunk) - The company is a "**controlled company**" under NYSE rules, exempting it from requirements to have a majority-independent board and fully independent compensation and nominating committees[293](index=293&type=chunk) - The board has determined that directors Ursula Burns, Elon Musk, Jacqueline Reses, and Fawn Weaver are independent[293](index=293&type=chunk) [Principal Accounting Fees and Services](index=101&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Deloitte & Touche LLP served as the independent auditor, with total fees of **$15.7 million in 2021**, primarily driven by **$7.3 million in audit-related fees** for the IPO Fees Paid to Independent Registered Public Accounting Firm (in thousands) | Fee Category | 2021 | 2020 | | :--- | :--- | :--- | | Audit Fees | $8,230,959 | $8,006,777 | | Audit-Related Fees | $7,293,279 | $1,736,890 | | Tax Fees | $197,736 | $304,562 | | All Other Fees | - | - | | **Total Fees** | **$15,721,974** | **$10,048,229** | - Audit-Related Fees in 2021 were primarily for professional services related to the company's IPO, including work on its S-1 registration statements and due diligence[295](index=295&type=chunk) - The audit committee has a policy to pre-approve all audit and permissible non-audit services provided by the independent auditor[296](index=296&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=101&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed as part of the Form 10-K, including corporate documents and material contracts - This section contains a comprehensive list of all exhibits filed with the 10-K report, including foundational corporate documents, debt agreements, and material contracts[298](index=298&type=chunk)[300](index=300&type=chunk) [Form 10-K Summary](index=110&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has not provided a summary for this item - None[309](index=309&type=chunk)

Start Time: 16:30 January 1, 0000 5:08 PM ET Endeavor Group Holdings, Inc. (NYSE:EDR) Q3 2021 Earnings Conference Call November 15, 2021, 16:30 PM ET Company Participants Ari Emanuel - CEO Jason Lublin - CFO James Marsh - SVP of IR Conference Call Participants Ben Swinburne - Morgan Stanley Alexia Quadrani - JPMorgan Stephen Laszczyk - Goldman Sachs David Joyce - Barclays Jason Bazinet - Citi Meghan Durkin - Credit Suisse Rich Greenfield - LightShed Partners Connor Murphy - Deutsche Bank Operator Good after ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-40373 ENDEAVOR GROUP HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware 83-3340169 (Stat ...

Endeavor Group Holdings, Inc. (NYSE:EDR) Q2 2021 Earnings Conference Call August 16, 2021 4:30 PM ET Corporate Participants Samanta Stewart - Senior Vice President & Head-Investor Relations Ari Emanuel - Chief Executive Officer Jason Lublin - Chief Financial Officer Mark Shapiro - President ConferenceCall Participants John Hodulik - UBS Kutgun Maral - RBC Capital Markets Ben Swinburne - Morgan Stanley Meghan Durkin - Credit Suisse Jason Bazinet - Citi David Joyce - Barclays Operator Hi. Welcome to Endeavor’ ...

Table of Contents Title of each classTrading Symbol(s)Name of each exchange on which registered Class A Common Stock, par value $0.00001 per share EDR The New York Stock Exchange Emerging growth company ☐ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1 ...

Financial Data and Key Metrics Changes - The company generated approximately $1.1 billion in revenue for Q1 2021, representing a 10% decline from the same period last year due to COVID-19 impacts [60] - Cash and adjusted EBITDA for the quarter increased by 13% to $199.5 million [60] - Adjusted EBITDA for the Owned Sports Properties segment increased by 42.3% to $145.5 million [63] - Adjusted EBITDA for the Events, Experiences & Rights segment decreased by 43.5% to $39.1 million [66] - Adjusted EBITDA for the Representation segment decreased by 10.4% to $61.5 million [68] Business Line Data and Key Metrics Changes - Owned Sports Properties segment revenues increased by 22.1% to $283.5 million, driven by media rights agreements and higher sponsorship fees [62] - Events, Experiences & Rights segment revenue decreased by 19.3% to $539.6 million due to event cancellations and attendance restrictions [64] - Representation segment revenue declined by 15% to $243.2 million, primarily due to reduced advertiser spending [67] Market Data and Key Metrics Changes - The company is witnessing strong demand for live events and experiences as restrictions ease globally, with significant attendance at events like the Great Ocean Road Running Festival [36][37] - The UFC's media viewership is up 7% compared to 2019, indicating a recovery in audience engagement [24] - The company has secured significant partnerships, including being named the Official Global Hospitality Provider for the Olympic and Paralympic Games [12] Company Strategy and Development Direction - The company aims to leverage its integrated portfolio across technology, sports, entertainment, media, and gaming to capitalize on emerging trends [10] - There is a focus on expanding international deals and enhancing sponsorship opportunities, particularly in markets like China [77][78] - The company is committed to strengthening its balance sheet and deleveraging while exploring growth opportunities [73] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery trajectory, noting that the reopening rates are happening faster than anticipated [70] - The ongoing pandemic continues to impact operations, but there are signs of recovery in various segments, particularly in live events and media [70][96] - Management highlighted the finite number of IP creators and the increasing demand for content as a long-term growth driver [101] Other Important Information - The company expects to generate revenue between $4.76 billion and $4.83 billion for the full year 2021, with adjusted EBITDA in the range of $735 million to $745 million [72] - The company plans to repay $600 million of its outstanding debt in Q3 2021 [72] Q&A Session Summary Question: Growth drivers for UFC - Management highlighted international deals, increased sponsorship opportunities, and the expansion of Pay-Per-View and digital content as key growth drivers for UFC [75][78] Question: Guidance assumptions regarding live events - Management clarified that guidance assumes a gradual return to live events, with expectations for Pay-Per-View events to have live audiences in Q3 and Q4 [96][97] Question: Media consolidation impact - Management noted that media consolidation is indicative of high demand for content, which benefits the company as a major player in the ecosystem [100][106] Question: Integration of On Location and Olympics impact - Management confirmed that On Location is fully integrated and is expected to significantly enhance the live events business, particularly with upcoming Olympic events [112]

[Forward-Looking Statements](index=4&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section outlines the forward-looking statements in the Quarterly Report, emphasizing they are predictions subject to known and unknown risks, uncertainties, and assumptions - All statements other than present and historical facts are forward-looking, intended to be covered by safe harbor provisions[12](index=12&type=chunk) - Key risks mentioned include the impact of the COVID-19 pandemic, changes in public and consumer tastes, adverse economic conditions, ability to adapt to new content distribution platforms, reliance on professional reputation, dependence on key personnel relationships, ability to identify, sign, and retain clients, potential conflicts of interest, loss of executive management, dependence on distribution partners, ability to manage acquired businesses, immigration restrictions, technology failures or security breaches, substantial indebtedness, intellectual property protection, compliance with governmental regulations, union and guild requirements, control by key shareholders, and tax matters[13](index=13&type=chunk)[14](index=14&type=chunk) [Risk Factor Summary](index=6&type=section&id=RISK%20FACTOR%20SUMMARY) This section provides a concise summary of the principal risks and uncertainties affecting the company's business, advising investors to carefully consider them - The COVID-19 global pandemic could continue to **materially and adversely affect** the company's business, financial condition, and results of operations[19](index=19&type=chunk) - Changes in public and consumer tastes and preferences, inability to adapt to new content distribution platforms, and dependence on discretionary and corporate spending are **significant risks**[19](index=19&type=chunk) - Success depends on maintaining a professional reputation, relationships of agents/managers, and the ability to recruit and retain qualified personnel and clients; potential internal conflicts of interest also pose a risk[19](index=19&type=chunk) - The company faces risks from **substantial indebtedness**, inability to protect intellectual property rights, extensive U.S. and foreign governmental regulations, and compliance with union and guild requirements[19](index=19&type=chunk) - The company is controlled by Messrs. Emanuel and Whitesell, Executive Holdcos, and the Silver Lake Equityholders, whose interests may differ from other shareholders[20](index=20&type=chunk) [Definitions](index=8&type=section&id=DEFINITIONS) This section provides definitions for key terms used throughout the Quarterly Report, clarifying references to the company, specific financial entities, and equity units - References such as 'we,' 'us,' 'our,' 'Endeavor,' and 'the Company' refer to Endeavor Group Holdings and its consolidated subsidiaries after the reorganization transactions, and to Endeavor Operating Company and its consolidated subsidiaries prior to the reorganization[22](index=22&type=chunk) - Key entities defined include Endeavor Group Holdings (EGH), Endeavor Manager, Endeavor Operating Company (EOC), and Executive Holdcos[22](index=22&type=chunk) - Various equity interests are defined, including Endeavor Catch-Up Profits Units, Endeavor Full Catch-Up Profits Units, Endeavor Partial Catch-Up Profits Units, Endeavor Manager Units, Endeavor Operating Company Units, and Endeavor Profits Units, detailing their economic characteristics and conversion terms[22](index=22&type=chunk) - The 'reorganization transactions' refer to the internal reorganization completed in connection with the May 2021 initial public offering, after which Endeavor Group Holdings manages and operates the business and controls the strategic decisions and day-to-day operations of Endeavor Operating Company through Endeavor Manager, including EOC's operations in its consolidated financial statements[22](index=22&type=chunk) [Part I – Financial Information](index=9&type=section&id=Part%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This part presents the unaudited financial statements, management's discussion and analysis, market risk disclosures, and information on controls and procedures [Item 1. Financial Statements (Unaudited)](index=9&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section provides the unaudited financial statements for Endeavor Group Holdings, Inc and Endeavor Operating Company, LLC, along with detailed explanatory notes [Endeavor Group Holdings, Inc. Balance Sheets](index=9&type=section&id=Endeavor%20Group%20Holdings%2C%20Inc.%20Balance%20Sheets) Endeavor Group Holdings, Inc. Balance Sheet Summary | Metric | March 31, 2021 (in thousands) | December 31, 2020 (in thousands) | | :----- | :---------------------------- | :------------------------------- | | Total Assets | $25,095 | $25,095 | | Total Liabilities | $20,745 | $20,745 | | Total Shareholder's Equity | $4,350 | $4,350 | [Endeavor Group Holdings, Inc. Notes to Financial Statements](index=10&type=section&id=Endeavor%20Group%20Holdings%2C%20Inc.%20Notes%20to%20Financial%20Statements) - Endeavor Group Holdings, Inc (EGH) was incorporated in January 2019 to complete reorganization transactions and an initial public offering (IPO) to carry on the business of Endeavor Operating Company, LLC (EOC)[28](index=28&type=chunk) - The company closed an IPO of **24,495,000 shares** of Class A common stock at **$24.00 per share** on May 3, 2021, including shares from the underwriters' option[31](index=31&type=chunk) - Prior to the IPO, a series of reorganization transactions were completed, including amending EGH's certificate of incorporation to provide for Class A, B, C, X, and Y common stock, Endeavor Manager becoming the sole managing member of EOC, and EGH becoming the sole managing member of Endeavor Manager[31](index=31&type=chunk) - Subsequent to the IPO, a private placement of 75,584,747 shares of Class A common stock at $24.00 per share generated approximately **$1,901.5 million in net proceeds** for EGH (after underwriting discounts/commissions but before offering expenses)[33](index=33&type=chunk) - EOC acquired 100% of Zuffa (Ultimate Fighting Championship) through the UFC Buyout, using **$835.7 million** of net proceeds from the offering and private placements[33](index=33&type=chunk) - The 2021 Incentive Award Plan became effective upon IPO, reserving **21,700,000 shares** of Class A common stock, with significant equity-based compensation grants made to directors, employees, and service providers, expected to result in material charges in Q2 2021[33](index=33&type=chunk) [Endeavor Operating Company, LLC Consolidated Balance Sheets](index=12&type=section&id=Endeavor%20Operating%20Company%2C%20LLC%20Consolidated%20Balance%20Sheets) Endeavor Operating Company, LLC Consolidated Balance Sheet Summary | Metric | March 31, 2021 (in thousands) | December 31, 2020 (in thousands) | | :----- | :---------------------------- | :------------------------------- | | Total Assets | $9,607,735 | $9,633,634 | | Total Liabilities | $8,433,450 | $8,478,885 | | Total Members' Equity | $982,993 | $963,976 | - Total current assets decreased from **$2,065,208 thousand** at December 31, 2020, to **$1,951,723 thousand** at March 31, 2021[36](index=36&type=chunk) - Total current liabilities decreased from **$1,997,078 thousand** at December 31, 2020, to **$1,917,494 thousand** at March 31, 2021[36](index=36&type=chunk) [Endeavor Operating Company, LLC Consolidated Statements of Operations](index=13&type=section&id=Endeavor%20Operating%20Company%2C%20LLC%20Consolidated%20Statements%20of%20Operations) Consolidated Statements of Operations Summary | Metric | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | Change (YoY) | | :----- | :----------------------------------------------- | :----------------------------------------------- | :----------- | | Revenue | $1,069,582 | $1,190,397 | -$120,815 (-10.1%) | | Operating Income | $94,498 | $53,764 | +$40,734 (+75.8%) | | Net Income (Loss) | $2,376 | $(51,261) | +$53,637 | - Direct operating costs decreased by **$134,892 thousand (19.8%)** year-over-year, from $681,284 thousand in Q1 2020 to $546,392 thousand in Q1 2021[38](index=38&type=chunk) - Provision for income taxes significantly decreased from **$48,604 thousand** in Q1 2020 to **$5,085 thousand** in Q1 2021[38](index=38&type=chunk) [Endeavor Operating Company, LLC Consolidated Statements of Comprehensive Income (Loss)](index=14&type=section&id=Endeavor%20Operating%20Company%2C%20LLC%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Consolidated Statements of Comprehensive Income (Loss) Summary | Metric | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | | :----- | :----------------------------------------------- | :----------------------------------------------- | | Net income (loss) | $2,376 | $(51,261) | | Total comprehensive income (loss), net of tax | $18,928 | $(143,194) | - Unrealized gains (losses) on interest rate swaps swung from a loss of **$(79,999) thousand** in Q1 2020 to a gain of **$15,076 thousand** in Q1 2021[40](index=40&type=chunk) [Endeavor Operating Company, LLC Consolidated Statements of Redeemable Interests and Members' Equity](index=15&type=section&id=Endeavor%20Operating%20Company%2C%20LLC%20Consolidated%20Statements%20of%20Redeemable%20Interests%20and%20Members'%20Equity) Consolidated Statements of Redeemable Interests and Members' Equity Summary | Metric | Balance at January 1, 2021 (in thousands) | Balance at March 31, 2021 (in thousands) | | :----- | :---------------------------------------- | :--------------------------------------- | | Total Members' Equity | $963,976 | $982,993 | - Comprehensive (loss) income improved significantly from **$(146,889) thousand** in Q1 2020 to **$(8,318) thousand** in Q1 2021[42](index=42&type=chunk) [Endeavor Operating Company, LLC Consolidated Statements of Cash Flows](index=16&type=section&id=Endeavor%20Operating%20Company%2C%20LLC%20Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows Summary | Metric | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | | :----- | :----------------------------------------------- | :----------------------------------------------- | | Net cash (used in) provided by operating activities | $(70,830) | $92,522 | | Net cash provided by (used in) investing activities | $7,610 | $(351,779) | | Net cash (used in) provided by financing activities | $(77,843) | $313,884 | | Cash, cash equivalents and restricted cash at end of period | $1,048,099 | $934,678 | [Endeavor Operating Company, LLC Notes to Consolidated Financial Statements](index=17&type=section&id=Endeavor%20Operating%20Company%2C%20LLC%20Notes%20to%20Consolidated%20Financial%20Statements) - Endeavor Operating Company, LLC (EOC) is a global entertainment, sports, and content company[49](index=49&type=chunk) - The COVID-19 pandemic had a **significant adverse impact** on EOC's business, operations, and cash flows starting March 2020, leading to event cancellations/postponements and the implementation of cost-saving initiatives; recovery is expected to be gradual[55](index=55&type=chunk)[56](index=56&type=chunk) - As of March 31, 2021, cash and cash equivalents totaled **$880.9 million**; the company believes existing cash, cash generated from operations, and available credit facilities will satisfy working capital and debt service requirements for at least the succeeding year[56](index=56&type=chunk) - In 2020, EOC acquired On Location Events, LLC (OLE) for **$441.1 million** and the remaining 50% of PIMGSA LLP for **$37.0 million**[57](index=57&type=chunk)[60](index=60&type=chunk) Content Costs (in thousands) | Metric | March 31, 2021 | December 31, 2020 | | :----- | :------------- | :---------------- | | Total content costs | $552,477 | $376,205 | Goodwill and Intangible Assets (in thousands) | Metric | March 31, 2021 | December 31, 2020 | | :----- | :------------- | :---------------- | | Goodwill | $4,181,616 | $4,181,179 | | Total intangible assets | $1,550,160 | $1,595,468 | Total Debt Principal (in thousands) | Metric | March 31, 2021 | December 31, 2020 | | :----- | :------------- | :---------------- | | Total principal | $5,962,966 | $6,023,870 | - In January 2021, the Zuffa First Lien Term Loan was refinanced into a New First Lien Term Loan, reducing the annual interest rate margin by **25 basis points** to 3.00% for LIBOR loans and the LIBOR floor by **25 basis points** to 0.75%[89](index=89&type=chunk) Revenue by Segment (in thousands) | Segment | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | Change (YoY) | | :------------------------- | :-------------------------------- | :-------------------------------- | :----------- | | Owned Sports Properties | $283,481 | $232,167 | +$51,314 (+22.1%) | | Events, Experiences & Rights | $539,610 | $668,776 | -$129,166 (-19.3%) | | Representation | $248,909 | $292,734 | -$43,825 (-15.0%) | | Total Consolidated Revenue | $1,069,582 | $1,190,397 | -$120,815 (-10.1%) | - Subsequent to March 31, 2021, the company acquired the path-to-college business of Reigning Champs, LLC for **$200 million** in cash and increased its purchase/guarantee agreements by **$1.3 billion**, due between 2021 and 2028[117](index=117&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a comprehensive discussion and analysis of Endeavor's financial condition and results of operations for the three months ended March 31, 2021 and 2020 [Business Overview](index=35&type=section&id=BUSINESS%20OVERVIEW) - Endeavor is a premium intellectual property, content, events, and experiences company, operating in three segments: **Owned Sports Properties**, **Events, Experiences & Rights**, and **Representation**[121](index=121&type=chunk)[122](index=122&type=chunk) - The Owned Sports Properties segment includes UFC (MMA organization), PBR (bull riding circuit), and a partnership with Euroleague (managing commercial business)[123](index=123&type=chunk)[124](index=124&type=chunk) - The Events, Experiences & Rights segment owns and operates over **800 live events annually**, distributes sports video programming and data, and operates IMG Academy[125](index=125&type=chunk)[126](index=126&type=chunk)[128](index=128&type=chunk) - The Representation segment provides services to over **7,000 talent and corporate clients** through WME, IMG Models, 160over90 (brand strategy/marketing), IMG Licensing, and Endeavor Content (content development/production)[129](index=129&type=chunk)[130](index=130&type=chunk) [Components of Our Operating Results](index=36&type=section&id=Components%20of%20Our%20Operating%20Results) - Revenue is primarily generated from media rights fees, pay-per-view, sponsorships, ticket sales, subscriptions, and license fees in Owned Sports Properties; media rights sales, production service fees, sponsorships, ticket/premium experience sales, subscriptions, streaming fees, tuition, profit sharing, and commissions in Events, Experiences & Rights; and commissions, packaging fees, marketing/consulting fees, production fees, and content licensing fees in Representation[131](index=131&type=chunk) - Direct operating costs include third-party expenses for event and experience production, content production costs, operation of training and education facilities, and fees for media rights[132](index=132&type=chunk) - Selling, general and administrative expenses primarily consist of personnel costs, rent, professional service costs, and other overhead[133](index=133&type=chunk) - Endeavor Operating Company is treated as a partnership for U.S. federal income tax purposes, while its U.S. and foreign corporate subsidiaries are subject to entity-level taxes[134](index=134&type=chunk) [Impact of the COVID-19 Pandemic](index=36&type=section&id=Impact%20of%20the%20COVID-19%20Pandemic) - The COVID-19 pandemic **significantly impacted** the company's business and operations starting March 2020, leading to a lack of ticketed events, postponements/cancellations of live events, stoppages in entertainment productions, and reduced corporate spending across all segments[135](index=135&type=chunk)[136](index=136&type=chunk) - The company recognized goodwill and intangible asset impairment charges, primarily in the Events, Experiences & Rights segment, and equity earnings were adversely impacted by weaker performance at Learfield IMG College due to COVID-19[140](index=140&type=chunk) - In response, the company implemented cost-saving initiatives including salary reductions, hiring freezes, furloughs, workforce reductions, reduced marketing spend, and cuts in travel, entertainment, capital expenditures, and acquisition activity[141](index=141&type=chunk) - Recovery is expected to be gradual, with continued uncertainty regarding the full impact on financial condition, liquidity, and future results; existing cash, cash from operations, and credit facilities are believed to be sufficient for the next year[142](index=142&type=chunk) [Results of Operations (Consolidated)](index=37&type=section&id=RESULTS%20OF%20OPERATIONS) Consolidated Results of Operations Summary | Metric | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | Change (YoY) | | :----- | :----------------------------------------------- | :----------------------------------------------- | :----------- | | Revenue | $1,069,582 | $1,190,397 | -$120,815 (-10.1%) | | Operating Income | $94,498 | $53,764 | +$40,734 (+75.8%) | | Net Income (Loss) | $2,376 | $(51,261) | +$53,637 | - Direct operating costs decreased by **$134.9 million (19.8%)** to $546.4 million, primarily due to reduced event costs from COVID-19 cancellations/postponements, partially offset by increased media rights costs[146](index=146&type=chunk) - Selling, general and administrative expenses decreased by **$7.9 million (2.0%)** to $381.1 million, driven by lower personnel costs, reduced travel, and other operating expenses due to COVID-19 related cost savings initiatives[147](index=147&type=chunk) - The provision for income taxes decreased by **$43.5 million** to $5.1 million, mainly due to a $32.3 million tax expense in Q1 2020 related to acquisitions and subsequent tax restructuring[153](index=153&type=chunk) - Net income attributable to non-controlling interests increased by **$23.6 million** to $27.2 million, primarily driven by the increase in net income attributable to UFC[155](index=155&type=chunk) [Segment Results of Operations](index=39&type=section&id=SEGMENT%20RESULTS%20OF%20OPERATIONS) Adjusted EBITDA by Segment (in thousands) | Segment | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | Change (YoY) | | :------------------------- | :-------------------------------- | :-------------------------------- | :----------- | | Owned Sports Properties | $145,549 | $102,294 | +$43,255 (+42.3%) | | Events, Experiences & Rights | $39,050 | $69,123 | -$30,073 (-43.5%) | | Representation | $61,483 | $68,613 | -$7,130 (-10.4%) | | Corporate | $(46,616) | $(54,492) | +$7,876 (+14.5%) | | Total Adjusted EBITDA | $199,466 | $185,538 | +$13,928 (+7.5%) | - Owned Sports Properties revenue increased by **$51.3 million (22.1%)** to $283.5 million, primarily due to increased media rights fees and event-related revenue at UFC[159](index=159&type=chunk) - Events, Experiences & Rights revenue decreased by **$129.2 million (19.3%)** to $539.6 million, mainly due to event cancellations and capacity restrictions, partially offset by increased media rights fees from the delayed 2020 soccer season[163](index=163&type=chunk) - Representation revenue decreased by **$43.8 million (15.0%)** to $248.9 million, attributed to the impact of COVID-19 on corporate spending and fewer content deliveries[167](index=167&type=chunk) [Non-GAAP Financial Measures](index=41&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES) - Adjusted EBITDA is defined as net income (loss) excluding income taxes, net interest expense, depreciation and amortization, equity-based compensation, merger, acquisition and earn-out costs, certain legal costs, restructuring, severance and impairment charges, certain non-cash fair value adjustments, certain equity earnings, COVID-19 related expenses, and certain other items[169](index=169&type=chunk) - Adjusted Net Income is defined as net income (loss) attributable to Endeavor Operating Company adjusted to exclude the company's share of the adjustments used to calculate Adjusted EBITDA (other than income taxes, net interest expense, and depreciation), on an after-tax basis, the release of tax valuation allowances, and other tax items[171](index=171&type=chunk) Adjusted EBITDA Reconciliation (in thousands) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :----- | :-------------------------------- | :-------------------------------- | | Net income (loss) | $2,376 | $(51,261) | | Provision for income taxes | 5,085 | 48,604 | | Interest expense, net | 68,351 | 69,984 | | Depreciation and amortization | 67,236 | 80,447 | | Equity-based compensation expense | 16,491 | 7,771 | | Merger, acquisition and earn-out costs | 10,985 | 10,162 | | Certain legal costs | 3,952 | 2,802 | | Restructuring, severance and impairment | 407 | 16,942 | | Fair value adjustment - equity investments | (7,799) | 2,809 | | Equity method losses - Learfield IMG College | 18,805 | 11,756 | | COVID-19 related costs | — | 210 | | Other | 13,577 | (23,985) | | **Adjusted EBITDA** | **$199,466** | **$176,241** | | Net income (loss) margin | 0.2% | (4.3)% | | Adjusted EBITDA margin | 18.6% | 14.8% | [Liquidity and Capital Resources](index=44&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) - The company's historical liquidity sources include cash flows from operations, equity contributions from pre-IPO institutional investors, and the issuance of long-term debt[177](index=177&type=chunk) - As of March 31, 2021, the company had **$5.6 billion** in outstanding indebtedness under its Senior Credit Facilities (Credit Facilities and UFC Credit Facilities), with approximately **$311 million** in available borrowing capacity[178](index=178&type=chunk) Cash Flows Overview (in thousands) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :----- | :-------------------------------- | :-------------------------------- | | Net cash (used in) provided by operating activities | $(70,830) | $92,522 | | Net cash provided by (used in) investing activities | $7,610 | $(351,779) | | Net cash (used in) provided by financing activities | $(77,843) | $313,884 | - Primary liquidity needs include funding organic growth, acquisitions, operating expenses, capital expenditures, debt service, payments under the tax receivable agreement, income taxes, employee equity repurchases, distributions, the UFC Buyout, and an expected **$600 million debt reduction** in Q3 2021[187](index=187&type=chunk) - The Tax Receivable Agreement requires payments to Post-IPO TRA Holders equal to **85% of realized tax savings** from favorable tax attributes, with future payments potentially substantial and subject to acceleration under certain conditions[190](index=190&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section discusses the company's exposure to market risks, primarily interest rate risk and foreign currency risk, and the strategies used to manage them - The company's exposure to changes in interest rates primarily relates to the floating interest component on its long-term debt; a **1% increase** in effective interest rates would have increased interest expense by **$41 million** for the three months ended March 31, 2021, holding debt levels constant[196](index=196&type=chunk) - The elimination of certain LIBOR tenors by the end of 2021 and June 2023 will impact loans benchmarked off these rates, with the new standard benchmark rate being SOFR, though the full impact is currently unquantifiable[197](index=197&type=chunk) - Foreign currency risk arises from operations in several countries, principally in British Pound and Euro; a **10% appreciation** of the U.S. dollar against these foreign currencies would have decreased revenues by approximately **$38.2 million** and improved operating income by approximately **$3.1 million** for the three months ended March 31, 2021[198](index=198&type=chunk)[199](index=199&type=chunk) - The company uses foreign currency forward exchange contracts and interest rate swaps to hedge against potential adverse fluctuations in foreign currency exchange rates and interest rates, not for speculative purposes[200](index=200&type=chunk) [Item 4. Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management evaluated disclosure controls and procedures as of March 31, 2021, concluding they were effective, with no material changes in internal control over financial reporting - The company's management, with the participation of the chief executive officer and chief financial officer, concluded that disclosure controls and procedures were **effective at the reasonable assurance level** as of March 31, 2021[202](index=202&type=chunk) - There were **no changes** in internal control over financial reporting during the three months ended March 31, 2021, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[203](index=203&type=chunk) - Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving desired control objectives, and judgment is applied in evaluating benefits relative to costs[201](index=201&type=chunk) [Part II – Other Information](index=50&type=section&id=Part%20II%20%E2%80%93%20OTHER%20INFORMATION) This part provides additional information including legal proceedings, risk factors, unregistered sales of equity securities, use of proceeds, and a list of exhibits [Item 1. Legal Proceedings](index=50&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, claims, and governmental investigations in the normal course of business, and intends to vigorously defend against them - An employee is named in a complaint by India's Director of Enforcement for alleged violations of the Foreign Exchange Management Act (FEMA) related to client transactions in 2009[113](index=113&type=chunk) - The Italian Competition Authority (ICA) investigated alleged breaches of competition law in Italy concerning media rights for Serie A and Serie B football leagues, resulting in a **EUR 0.3 million fine** in May 2019; subsequently, football clubs and the Serie A league filed claims against IMG and others, seeking aggregate damages totaling over **EUR 2.4 billion**[114](index=114&type=chunk) - Zuffa (UFC) is facing five related class-action lawsuits alleging monopolization of the market for elite professional MMA bouts and fighter services, seeking treble damages and injunctive relief; the District Court indicated an intention to certify the 'Bout Class'[114](index=114&type=chunk) - In February 2021, the company signed new franchise agreements with the Writer's Guild of America (WGA), prohibiting packaging deals after June 30, 2022, and limiting non-controlling ownership in Restricted Production Entities to **20%**[114](index=114&type=chunk) [Item 1A. Risk Factors](index=50&type=section&id=Item%201A.%20Risk%20Factors) This section details substantial risks associated with investing in the company's Class A common stock, categorized into business, organizational, stock, and tax-related risks [Risks Related to Our Business](index=50&type=section&id=Risks%20Related%20to%20Our%20Business) - The COVID-19 global pandemic continues to **materially and adversely affect** the company's business, financial condition, and results of operations due to ongoing restrictions, event cancellations, and changes in consumer behavior[207](index=207&type=chunk)[208](index=208&type=chunk)[210](index=210&type=chunk) - The company's revenue is highly sensitive to rapidly changing consumer preferences and industry trends, requiring successful adaptation to new content distribution platforms and technologies[214](index=214&type=chunk)[217](index=217&type=chunk) - Success depends substantially on maintaining a professional reputation and the relationships of agents, managers, and other key personnel with clients; adverse publicity or loss of key talent could significantly harm the business[218](index=218&type=chunk)[220](index=220&type=chunk)[221](index=221&type=chunk) - The company's business involves potential internal conflicts of interest due to its broad platform, which, if not adequately managed, could adversely affect its reputation and client relationships[224](index=224&type=chunk) - Rapid growth through acquisitions presents integration challenges, and failure to realize anticipated benefits or effectively manage future growth could adversely affect the business[232](index=232&type=chunk)[233](index=233&type=chunk) - The company is subject to extensive U.S. and foreign governmental regulations (e.g., labor, tax, anti-corruption, data privacy, licensing), and non-compliance could result in fines, legal proceedings, and reputational harm[235](index=235&type=chunk)[236](index=236&type=chunk)[253](index=253&type=chunk)[254](index=254&type=chunk) - Being a signatory to certain franchise agreements of unions and guilds, and collective bargaining agreements, exposes the company to risks of work stoppages, increased costs, or loss of client representation if agreements expire or disputes arise (e.g., with the WGA)[257](index=257&type=chunk)[259](index=259&type=chunk) [Risks Related to Our Organization and Structure](index=63&type=section&id=Risks%20Related%20to%20Our%20Organization%20and%20Structure) - As a holding company, Endeavor Group Holdings is dependent upon distributions from Endeavor Operating Company to pay taxes and other expenses, which may be restricted by applicable laws, regulations, or covenants in debt facilities[263](index=263&type=chunk)[264](index=264&type=chunk) - Messrs. Emanuel and Whitesell, Executive Holdcos, and the Silver Lake Equityholders collectively control approximately **89.5% of the combined voting power**, allowing them to control major corporate actions, potentially with interests that differ from minority stockholders[266](index=266&type=chunk)[268](index=268&type=chunk) - The company has a substantial amount of indebtedness (**$5.6 billion** as of March 31, 2021), which requires significant cash flow for service and refinancing, increasing vulnerability to adverse economic conditions and potentially limiting future financing[271](index=271&type=chunk)[272](index=272&type=chunk) - Restrictive covenants in the Senior Credit Facilities limit the company's ability to pursue certain business strategies, including asset dispositions, mergers, dividends, and other payments, and non-compliance could lead to accelerated debt repayment[273](index=273&type=chunk)[275](index=275&type=chunk) - The Tax Receivable Agreement requires the company to pay certain pre-IPO investors **85% of realized tax savings** from favorable tax attributes, with future payments potentially substantial and subject to acceleration upon certain events, which could negatively impact liquidity[279](index=279&type=chunk)[281](index=281&type=chunk) - The company is exempt from certain corporate governance requirements as a **'controlled company'** due to concentrated control, which reduces protections afforded to stockholders of fully compliant companies[277](index=277&type=chunk) [Risks Related to Our Class A Common Stock](index=70&type=section&id=Risks%20Related%20to%20Our%20Class%20A%20Common%20Stock) - Future sales of a substantial number of Class A common stock, including shares issuable upon redemption rights and equity awards, or the perception of such sales, could **depress the stock price** and impair the company's ability to raise capital[282](index=282&type=chunk)[287](index=287&type=chunk) - The market price for Class A common stock may be **volatile** due to various factors, including consumer trends, economic conditions, operating performance, public announcements, analyst ratings, and broader market movements, potentially leading to significant price fluctuations[289](index=289&type=chunk) - The company **does not expect to pay any cash dividends** for the foreseeable future, intending to retain all future earnings for business operations and expansion[291](index=291&type=chunk) - Provisions in the company's organizational documents, such as the multiple share class capital structure, classified board, and advance notice requirements, may **delay or prevent a third-party acquisition** without board approval[293](index=293&type=chunk)[294](index=294&type=chunk) - If Class C common stock is issued in the future, holders of Class A common stock will not be entitled to receive excess economic consideration over Class C holders in a merger, consolidation, or tender/exchange offer, potentially resulting in a lesser payment[295](index=295&type=chunk) [Risks Related to Tax Matters](index=75&type=section&id=Risks%20Related%20to%20Tax%20Matters) - Tax matters may cause **significant variability** in financial results due to changing tax rates, projected taxable income levels, valuation allowances, tax audits, and changes in tax laws and their interpretations[299](index=299&type=chunk) - New partnership audit rules may require Endeavor Operating Company to pay additional taxes, interest, and penalties at the entity level, with the economic burden potentially borne by current holders[300](index=300&type=chunk)[301](index=301&type=chunk) - The tax classification of Endeavor Operating Company as a partnership could be challenged, leading to materially different tax consequences[302](index=302&type=chunk) - The company may be required to fund withholding tax upon certain exchanges of Endeavor Operating Company Units by non-U.S. holders, potentially necessitating additional indebtedness or stock sales[303](index=303&type=chunk) - As the successor to merged entities, Endeavor Group Holdings may incur certain tax liabilities attributable to its pre-IPO investors and Other UFC Holders, which could adversely affect liquidity and financial condition[304](index=304&type=chunk) [General Risk Factors](index=76&type=section&id=General%20Risk%20Factors) - The company may face labor shortages, making it difficult and expensive to attract, train, and retain qualified employees, contingent workers, and volunteers, which could adversely impact events and productions[306](index=306&type=chunk)[307](index=307&type=chunk) - Exchange rate fluctuations, particularly between the U.S. Dollar and foreign currencies like the British Pound and Euro, may cause currency translation losses or gains, affecting operating results[308](index=308&type=chunk) - Costs associated with obtaining and maintaining insurance, along with the adequacy of coverage limits for property, casualty, liability, and business interruption losses, could adversely affect profitability, especially given heightened concerns from events like the COVID-19 pandemic[309](index=309&type=chunk) - The trading market for Class A common stock depends on research and reports from securities or industry analysts; a lack of coverage or unfavorable research could depress the stock price and trading volume[310](index=310&type=chunk) - Future changes to U.S. and foreign tax laws, including those related to multinational corporations, could adversely affect worldwide tax liabilities, business, financial condition, and results of operations[311](index=311&type=chunk)[312](index=312&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=78&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the use of proceeds from the company's IPO and concurrent private placements, and describes recent unregistered sales of equity securities - The company received estimated net proceeds of **$1,887.1 million** from its IPO (including the over-allotment option) and concurrent private placements, after deducting underwriting discounts, commissions, and other expenses[313](index=313&type=chunk) - Of the net proceeds, **$835.7 million** was used to purchase Endeavor Operating Company Units (or UFC Parent interests) from certain Other UFC Holders[313](index=313&type=chunk) - **$1,053.1 million** of the proceeds was contributed to Endeavor Manager (and subsequently to Endeavor Operating Company) for working capital, general corporate purposes, an expected **$600 million debt reduction** in Q3 2021, and potential future joint ventures, investments, or acquisitions[187](index=187&type=chunk)[313](index=313&type=chunk) - A private placement of **75,584,747 shares** of Class A common stock at $24.00 per share occurred simultaneously with the IPO, generating aggregate proceeds of **$1,814.0 million** ($1,377.0 million to the company and $437.0 million to affiliates of KKR)[314](index=314&type=chunk) [Item 6. Exhibits](index=79&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report, including various agreements, employment contracts, equity award plans, and required certifications - Key agreements filed include the Transaction Agreement, Stockholders Agreement, Registration Rights Agreement, Tax Receivable Agreement, and Amended and Restated Limited Liability Company Agreements for Endeavor Operating Company, LLC and Endeavor Manager, LLC[316](index=316&type=chunk)[320](index=320&type=chunk) - The exhibits also list term employment agreements for several executives and various equity award agreements under the Endeavor Group Holdings, Inc. 2021 Incentive Award Plan[322](index=322&type=chunk)[323](index=323&type=chunk)[324](index=324&type=chunk)[325](index=325&type=chunk) - Certifications from the Principal Executive Officer and Principal Financial Officer, as required by the Sarbanes-Oxley Act, are included, along with XBRL Instance, Schema, Calculation, Definition, Label, and Presentation Linkbase Documents[327](index=327&type=chunk)[328](index=328&type=chunk) [Signatures](index=83&type=section&id=SIGNATURES) This section contains the official signatures of the registrant, Endeavor Group Holdings, Inc, certifying the report as of June 2, 2021 - The report is signed by Ariel Emanuel, Chief Executive Officer (Principal Executive Officer), and Jason Lublin, Chief Financial Officer (Principal Financial Officer)[332](index=332&type=chunk) - The report was signed on June 2, 2021[333](index=333&type=chunk)