Endeavor, led by CEO Ari Emanuel, had a heavily leveraged strategy which led to an IPO plan that was scrapped last September.
Neilson Barnard/Getty ImagesThe expected timetable for Endeavor’s IPO has shifted from this summer to September at the soonest.
Before going public, Endeavor is looking to add a hospitality and live events company, On Location Experiences, to its portfolio, a source confirmed to The Hollywood Reporter. The acquisition should further diversify the company’s holdings, which is crucial amid recent analyst notes urging caution about the IPO.
Pushing back the IPO would also allow Endeavor, which owns talent agency WME as well as such businesses as the Ultimate Fighting Championship and Miss Universe, to include its second-quarter earnings results and other recent highlights, which would help to boost its valuation.
In a July 9 note, Bernstein analyst Todd Juenger called Endeavor’s public offering “not for the faint of heart,” citing its considerable debt, estimated to exceed $3.1 billion net even after it uses the hundreds of millions raised in its IPO to pay part of it down. The company reported $551 million in earnings before interest, taxes, depreciation and amortization last year.
Juenger also was concerned about the volatile natures of both the UFC and talent agency businesses (particularly while WME is locked in battle with the WGA over the future of packaging fees and affiliate production), although of the former he noted that mixed martial arts has an enviable appeal among international and young male demographics.
The Wall Street Journal earlier reported about Endeavor’s updated timeline for an IPO. The WGA released a statement later on Friday after the news broke. “The Endeavor IPO poses an untenable contradiction,” the statement read. “One way the company proposes to maximize shareholder results is through conflicted business practices. This has already led to a rebellion of 1,400 WGA-represented writers who have left the WME talent agency. The IPO is offering investors a business saddled with conflicts of interest and risks, from extreme leverage to an unaccountable governance structure to potential legal liability for antitrust violations and fiduciary breaches.”
Aug. 5, 9:53 p.m. Added statement from WGA.
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