Mark Shapiro, President and COO of TKO Group Holdings, used a recent appearance at the Goldman Sachs Communacopia and Technology Conference to reassure investors that compensation for WWE superstars and UFC stars is no longer “a variable the company needs to worry about”. Speaking with analyst Stephen Laszczyk, Shapiro said talent pay has already been factored into TKO’s financial outlook.
Asked about talent development and the financial implications of TKO’s largest expense category, Shapiro pointed directly to the company’s new media rights agreements as the moment talent economics were reset.
“Let’s talk about the pay for the superstars and our figh ters first,” Shapiro said. “What I would tell you is off our new deals with ESPN and WWE, and with Paramount Plus, CBS, Peacock, with UFC, and even a little bit post-Raw with Netflix, we did resize our figh†er and superstar pay composition. And that is baked into our numbers. So there will be no further adverse impact with regard to how that plays out or divvies out.”
Shapiro added that TKO’s roster depth gives the company confidence moving forward.
“We’re confident where we sit. We have 600 figh†ers as an example and are stable at the UFC.”
Rather than relying solely on high-priced free-agent signings, Shapiro emphasized that TKO’s internal pipeline, NXT for WWE and international performance centers for UFC, is central to controlling long-term talent costs.
“We do, to your point, really rely on development. Keep in mind that when you look at the WWE, 75% of the superstars come from NXT. So they’re starting in our development league and going all the way up. So pipeline is very important to our strategy.”
On the UFC side, he pointed to facility investments abroad.
“We’ve really capitalized on the investments of our performance centers in Mexico City, in Vegas, and particularly China. We’re really getting real traction. So that’s a big part of our strategy. It will continue to be a big part of our strategy.”
Shapiro noted that MMA stars and WWE superstars still have upside beyond fixed compensation through sponsorships and performance bonuses.
“We will continue to be aggressive in other monetization opportunities for both our superstars and our UFC (guys) with regard to advertiser deals, marketing partnerships, bonuses”
He closed the topic by tying talent strategy to margin expansion, one of the metrics TKO has repeatedly highlighted this year.
“What you see is you see the best of the best signing up and lining up to be a part of the UFC and to be a part of WWE. So that’s something we always watch out for and we want to make sure that we’re really spreading the opportunities, but the strategy’s working. And our margins will continue to expand.”
