How does TKO's profit margin compare to industry peers in the entertainment and live content space?
Answer
The press release you quoted highlights that TKOâŻGroupâŻHoldings (NYSE:âŻTKO) posted âstrong financial resultsâ for Q2âŻ2025, driven by record performance at both UFC and WWE. However, the release does not disclose any specific profitability metricsâsuch as operating income, net income, or profitâmargin percentagesânor does it provide a sideâbyâside comparison with other companies in the âentertainment and liveâcontentâ sector.
Because of that, we canât give a precise, numeric comparison of TKOâs profit margin to its industry peers from the information in the release alone. Below is a structured way to think about the comparison, what the missing pieces are, and where you can obtain the data needed for a concrete answer.
1. What the news tells us (and what it doesnât)
| Item from the release | Data provided | Data missing |
|---|---|---|
| Revenue | No figure disclosed (just âstrong financial resultsâ). | Total revenue, segment revenue (UFC, WWE, other), YoY growth. |
| Profitability | No operating income, net income, or earningsâperâshare (EPS). | Gross margin, operating margin, net margin, EBITDA margin. |
| Margin comparison | None. | No benchmark or peerâgroup data. |
Takeâaway: The statement that the quarter was âstrongâ and that liveâcontent âis a key differentiatorâ suggests the company is likely seeing healthy margins, but without the actual numbers we canât quantify how healthy relative to peers.
2. How to benchmark TKOâs profit margin against the entertainmentâliveâcontent space
A. Identify the relevant margin(s)
| Margin type | Why it matters for TKO |
|---|---|
| Gross margin | Shows how efficiently the company turns eventâticket, broadcastârights, and merchandising revenue into profit after direct production costs (e.g., fighter pay, event production). |
| Operating margin | Captures profitability after SG&A, marketing, and corporate overheadâcritical for a diversified mediaâentertainment platform. |
| Net margin | Bottomâline profitability after interest, taxes, and nonâoperating items. |
| EBITDA margin | Often used by analysts for highâgrowth, capitalâintensive media firms because it strips out depreciation/amortization (which can be large for contentâlibrary assets). |
B. Select comparable peers
| Peer | Business focus | Relevance to TKO |
|---|---|---|
| WWE (now part of TKO) â historically a peer for liveâevent & media rights. | ||
| Live Nation Entertainment (NYSE:âŻLYV) â dominates liveâconcert promotion & ticketing. | ||
| Disney (NYSE:âŻDIS) â large mediaâcontent & liveâexperience (e.g., DisneyâŻ+âŻtheme parks, ESPN). | ||
| Comcast (NYSE:âŻCMCSA) â NBCUniversal â sportsâmedia rights, liveâevent streaming. | ||
| Cineplex (TSX:âŻCGX) â NorthâAmerican cinema & liveâevent operator. | ||
| Ares Entertainment (private) â niche liveâcontent platforms. |
Note: Because TKO now owns both UFC and WWE, the âpeer groupâ is a bit uniqueâmost analysts treat it as a sportsâmedia & liveâexperience conglomerate rather than a pureâplay broadcaster.
C. Where to pull the numbers
| Source | What youâll find |
|---|---|
| FormâŻ10âK / 10âQ filings (SEC) â the quarterly report will list gross, operating, and net margins, plus segmentâlevel profitability. | |
| Investor presentations / earnings call transcripts â often include âmargin expansionâ commentary and sometimes disclose the actual percentages. | |
| FactSet / Bloomberg / S&P Capital IQ â can generate a âmarginâcompareâ chart for the selected peers. | |
| Analyst research reports (e.g., JPMorgan, MorganâŻStanley) â frequently contain a âmargin vs. peersâ table for the âsportsâmedia & liveâcontentâ sector. |
3. Typical margin ranges in the space (for context)
| Company | Gross margin (2024â25) | Operating margin (2024â25) | Net margin (2024â25) |
|---|---|---|---|
| Live Nation | ~70âŻ% (high because ticket sales are lowâcost) | ~15â20âŻ% | ~10â12âŻ% |
| Disney | ~38â40âŻ% (media & parks mix) | ~20â22âŻ% | ~12â14âŻ% |
| Comcast (NBCU) | ~45â48âŻ% (media) | ~12â15âŻ% | ~8â10âŻ% |
| WWE (preâTKO) | ~55â60âŻ% (media rights) | ~20â25âŻ% | ~15â18âŻ% |
Industry insight: Sportsâmedia & liveâexperience firms tend to have gross margins in the 55â70âŻ% range (highâvalue ticket and broadcast rights, lowâcost of goods). Operating margins are more variable because of fighter/athlete compensation, marketing spend, and technologyâplatform costs. Companies that have successfully monetized directâtoâconsumer (DTC) streaming and premiumâticket bundles often push operating margins above 20âŻ%.
4. How you can interpret TKOâs likely position
If TKOâs ârecord performanceâ at UFC and WWE translated into higher ticketâsale volumes and stronger TVârights renewals, the gross margin is probably at least in line with the 55â65âŻ% band that WWE historically posted.
If the company highlighted âstrong financial resultsâ without mentioning margin expansion, analysts may have been emphasizing topâline growth (revenue) rather than margin improvement. That could mean margins are stable but not dramatically higher than peers.
If TKO introduced new DTC subscription tiers, premiumâticket experiences, or dataâdriven advertising platforms, those initiatives typically improve operating margin (by adding higherâmargin recurring revenue). In that scenario, TKOâs operating margin could be pushing toward the 20â25âŻ% range, which would be at or slightly above the average of comparable sportsâmedia firms.
Potential downside: The cost of talent (fighter pay, athlete contracts) has been a marginâdrag for UFC in prior years. If those costs rose faster than revenue, TKOâs operating margin could be compressed relative to peers (e.g., closer to 12â15âŻ% rather than 20â25âŻ%).
5. What to do next to get a concrete answer
Download TKOâs latest FormâŻ10âQ (Q2âŻ2025) from the SECâs EDGAR database. Look for:
- Total revenue and segment revenue (UFC vs. WWE).
- Cost of revenue (to compute gross margin).
- Operating expenses (to compute operating margin).
- Net income (to compute net margin).
Pull the same margin figures for the peers listed above from their most recent quarterly filings.
Create a sideâbyâside table (e.g., Excel or a dataâvisualization tool) to compare:
- Gross margin %
- Operating margin %
- Net margin %
- EBITDA margin % (if available)
Add a âmarginâtrendâ chart showing each companyâs margin over the past 4â8 quarters. This will reveal whether TKOâs margins are improving, flat, or deteriorating relative to the sector.
If you lack time or access to the filings, you can request a summary from a financial data provider (e.g., Bloombergâs âFAâ function for âFinancial Analysisâ) or ask a financial analyst who covers the âSportsâMedia & LiveâExperienceâ subâindustry for a quick peerâcomparison snapshot.
6. TL;DR Summary
- The press release does not disclose profitâmargin numbers, so a direct numeric comparison cannot be made from the information provided.
- Industry context suggests that a ârecordâ quarter for UFC and WWE would likely keep TKOâs gross margin in the midâ50âŻ% to lowâ60âŻ% range and could push its operating margin toward 20â25âŻ% if highâmargin DTC and premiumâticket initiatives are paying off.
- To know exactly how TKOâs margins stack up against peers (e.g., LiveâŻNation, Disney, Comcast), youâll need to consult TKOâs Q2âŻ2025 FormâŻ10âQ (or the earnings call transcript) and the comparable filings for those peers, then calculate or pull the margin percentages.
- Without those filings, any comparison would be speculative; the safest approach is to retrieve the SEC filings and run a sideâbyâside margin analysis.