TKO Group Holdings Inc. (NYSE:TKO) is absorbing a $30 million loss to host an ultra-exclusive UFC match on the White House South Lawn curated by President Donald Trump, but Wall Street experts tell Benzinga the political spectacle is a calculated gamble that will pay off for the company’s bottom line.
Ultimate Status Symbol For Washington?
A hand-curated ticket from Trump to the custom-built UFC octagon on the White House South Lawn is currently the ultimate status symbol in Washington. But for TKO Group, the parent company of the UFC and WWE, the spectacle comes with a hefty price tag: an expected $30 million net loss for the upcoming second-quarter UFC Freedom 250 event.
While retail investors might balk at the eight-figure expense, Wall Street analysts are looking past the political flash to the underlying fundamentals.
‘Discretionary, Unique’ Global Stage
For Ian Moore, VP and Research Analyst for U.S. Entertainment at Bernstein, the high-stakes gamble is exactly what TKO needs to execute its long-term strategy. Moore maintains an “Outperform” rating on the stock with a $240 price target, noting that the underlying monetization engine is working so well that TKO can afford to take a hit for the sake of mainstream visibility.
“I think the Freedom 250 event is well understood by the street at this point – $60M loss with $30M recouped primarily via sponsorship,” Moore exclusively told Benzinga.
“Engagement metrics I follow, including US ratings for fights YTD, appear to be soaring already, so my view is that this is more of a discretionary, unique & very high-profile opportunity to promote the UFC on a global stage.”
Moore emphasized that the bulk of TKO’s earnings before interest, taxes, depreciation, and amortization (EBITDA) is locked …
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