TKO Group Holdings, Inc. TKO

Key data

The business

TKO Group Holdings owns the two biggest names in combat entertainment: UFC, the mixed-martial-arts league, and WWE, scripted professional wrestling. In 2024 it bolted on IMG, On Location and Professional Bull Riders, bought from Endeavor, the agency that controls TKO through a dual-class structure. Money comes three ways: media-rights fees, the largest and most contracted, live events with tickets and hospitality, and sponsorship, licensing and consumer products. What the customer holds is a WrestleMania seat, a UFC pay-per-view, or now a Netflix subscription that carries Raw every Monday night. The moat is ownership of IP with no substitute: there is one UFC, one WrestleMania, and live combat is DVR-proof, the rare content a streamer will overpay to keep viewers from cancelling. That scarcity is why Paramount and Netflix bid the rights up, not down.

The numbers

Revenue is lumpy by design, since events land in different quarters, so read the half-year, not the quarter. The last twelve months brought about $5.3 billion. In the first half of 2026 revenue rose 22% and operating income 27%, lifting operating margin to 24.4% from 23.5%, the fixed cost of staging events spreading over bigger rights checks.

Two things stand out. Q4 2025 printed a small loss, the seasonal trough plus acquisition amortization, which is why the trailing multiple looks distorted. And earnings have landed a touch under expectations in three of the last four quarters, June's $1.34 against a $1.41 estimate included: revenue compounds, but amortization from the Endeavor deal and minority-interest leakage keep per-share results softer than the top line suggests.

The 2023 jump is the WWE merger, and 2021-2022 are UFC alone. Note 2025 revenue slipped 3% against 2024, so growth is not linear, it is rights-renewal-driven and arrives in steps. The whole engine is contracted media money.

Against roughly $1.53 billion of trailing EBITDA, these escalators are the compounding: analysts model per-share earnings near $7 by 2028, more than double today, almost entirely from rights already signed rather than new fans. Here is where the screen lies. On the Class A shares the market sees, the stock looks like 11.5 times cash earnings, near a decade low. But TKO is an Up-C, and only about two-fifths of the economics are public. Count all roughly 195 million units and true enterprise value is near $40 billion, about 26 times trailing EBITDA and low-20s on management's adjusted figure, the upper end of its eleven-year 12-to-30 range, not the bottom. That gap between screen and reality has not closed in the days since it last flashed, and it is structural, not a mispricing waiting to correct. the market argues whether 26 times is too rich for a low-20s grower, but the sharper question is whether the step-up is a one-time reset or a compounding ramp, because 2029 consensus revenue sits below 2028. The 2027 operating-income run-rate, once both deals are fully in the numbers, settles it.

Management

The people who run TKO have been selling. Over the past year insiders sold about $29.5 million across 60 transactions against $5.5 million of buys, and the sellers are the principals: Executive Chairman Ariel Emanuel ($4.8 million), President Mark Shapiro ($3.7 million) and WWE's Nick Khan ($2.3 million), all in July and August 2026. Plan status is not disclosed in the filings I read, so read it as neither confirmed-automatic nor clearly opportunistic. Against that, the company itself is a heavy buyer: $867 million repurchased in 2025 and an $838 million accelerated buyback struck in March 2026, much of it near current prices. Emanuel and Silver Lake control the vote through Endeavor's Class B units, so public holders ride along, they do not steer.

How it fails or surprises you

Boxing and international rights add a leg nobody is paying for (right tail). TKO already houses a Boxing LLC venture and IMG's global events arm, and UFC's international rights renew territory by territory over 2026-2028. If those price like the US Paramount step, a third franchise emerges from assets the market values at zero. Watch 2026-2027 UFC international-rights announcements and any disclosed boxing economics.

The step-up is a reset, not a ramp. Consensus puts 2029 revenue ($6.9B) below 2028 ($7.4B), the tell that rights money may jump once then flatten. If growth normalizes to low single digits after 2028, about 26 times EBITDA derates hard. This is the fact my read explains least well. Watch the 2027 guide and organic event growth outside rights.

Insider selling meets a controlled float. Every top executive sold this summer, and Silver Lake-controlled Endeavor holds the majority through Class B units. A registered secondary or block unwind would pressure the thin Class A float, about $171 million of average daily volume. Watch Form 4 cadence and any shelf or secondary filing over the next few quarters.

Closing thoughts

The contracted rights money is real and mostly locked, and what settles the valuation is whether that revenue compounds past 2028 or flattens. The 2027 operating-income run-rate and the 2028 guide answer that directly. The left tail is a multiple that derates from 26 times toward its mid-teens history if growth stalls after the reset, which on $1.53 billion of EBITDA is a long way down. The right tail is boxing and international rights turning a two-franchise story into three. My read: the downside is a de-rating, not an impairment, because the cash flow is contracted and the assets are irreplaceable, and that asymmetry favors patience over price.

The bet is still that people keep paying to watch UFC fights and WWE wrestling, and the networks keep paying more at each renewal. What breaks it is the multiple, not the business, because if 2027 revenue growth and operating income flatten once Paramount and Netflix are fully in the run-rate, a 26-times price cannot hold. The pair to watch is the 2027 revenue growth rate against the operating margin: if both stall together, the story was a one-time reset wearing a compounder's price.