Mark Shapiro, President of TKO, Backs Paramount and Netflix in the WBD Merger Discussion
TKO Group Reports Strong Earnings Amid Industry Rumblings
During TKO Group’s quarterly earnings call on Wednesday, President and COO Mark Shapiro addressed a question regarding the ongoing competition between Paramount and Netflix for Warner Bros. Discovery.
“I’m not going to get pulled into that trap,” Shapiro stated. “We’re just an observer just like everybody else.” His attempt to sidestep political implications quickly shifted, however, as he highlighted TKO’s productive relationships with both companies, specifically mentioning key collaborations with David Ellison and Ted Sarandos. “We obviously have no input or control over what happens. That is ultimately for the Warner Bros shareholders to decide. We’re just watching as it runs its course. I will say, we see pros for TKO with either side winning,” he added.
Prior to the call, TKO Group announced a 12% rise in revenue, surpassing $1 billion, and reported a return to net profit during a mixed quarter. CEO Ari Emanuel noted “meaningful momentum across both UFC and WWE” during this period.
In the UFC segment, sales surged 17% to $401 million, with profits climbing 20% to $213 million. UFC CEO Dana White revealed plans for an unconventional fight at the White House, having met with President Trump to discuss logistics. However, executives estimated potential losses from the event could reach $30 million, with Shapiro confirming, “we will not be making money on the country’s 250th birthday.”
The WWE segment also saw impressive results, with profits increasing 44% to $165 million on revenues up 21% to $360 million, attributed to escalating contractual rights from distribution deals with Netflix and ESPN. Conversely, the IMG segment reported a decline in sales to $248 million last quarter. TKO is managing hospitality and logistics for the FIFA World Cup 2026 through On Location and IMG.
Free cash flow grew to $1.16 billion, an increase of $691 million, although expenses also rose.
Ari Emanuel expressed optimism about the company’s positioning two years post-launch, citing robust long-term media rights agreements and operational strength. He announced plans to initiate the next phase of a capital return program, emphasizing a commitment to delivering long-term value for shareholders.
In his analysis, Shapiro described TKO as “a high-quality execution story with multiple avenues for outperformance,” underscoring record-setting live events and global partnerships, including the launch of Zuffa Boxing last month on Paramount+, which Ellison praised during Paramount’s earnings call held the same afternoon.
Last August, shortly after closing a deal with Skydance, Paramount secured a seven-year media rights agreement worth an average of $1.1 billion annually, making it the exclusive home of all UFC events in the U.S. starting in 2026. Additionally, WWE formed a landmark rights agreement with Netflix in 2024 for Monday Night Raw.
Looking ahead, TKO Group forecasts a strong year, projecting revenues between $5.675 billion and $5.775 billion, as well as adjusted EBITDA of $2.24 billion to $2.29 billion—both figures exceeding earlier estimates.
