Endeavor, formerly WME-IMG, 'is planning IPO by end of year'
Endeavor, formerly WME-IMG, the combined Hollywood talent agency and sports and entertainment company, is making plans to take the company public by the end of this year, the Wall Street Journal has reported.
Endeavor has already filed, or is about to file, the paperwork for an initial public offering, the newspaper said, with the company valued at $6.3 billion, including debt, in August 2017, according to Bloomberg.
Endeavor declined to comment.
If Endeavor goes public, it will become the first of the ‘big four’ Hollywood talent agencies to do so, with Creative Artists Agency (CAA), United Talent Agency (UTA) and International Creative Management (ICM Partners) all trading as private businesses.
Canada Pension Plan Investment Board invested $400 million in the company in 2017, while Silver Lake, the private equity company, SoftBank Group Corp. and Singapore’s sovereign wealth fund are also investors.
However, the company recently returned a $400-million investment from Saudi Arabia in protest at the alleged state-sponsored murder six months before of dissident journalist Jamal Khashoggi in the Saudi consulate in Istanbul.
The return of the money, at the behest of Endeavor chief executive Ari Emanuel, effectively put an end to the agency’s involvement in Saudi Arabia.
Many observers had expected Endeavor to go public at some point, having acquired IMG for $2.3 billion in 2013, and completed the $4-billion acquisition of mixed martial arts promoter UFC in 2016.
The sale of UFC was the subject of a warning from US Federal Reserve Bank supervisors, with Bloomberg reporting that the sale, which was handled by Goldman Sachs, the investment bank, included $1.8 billion to cover accumulated debt.
Bloomberg said that the warning was issued because regulators are trying to rein in risky lending practices by Wall Street’s biggest banks that “push a company’s debt load to more than six times its earnings.”
The acquisition of Forstmann Little, IMG’s former owner, by WME in 2013 brought IMG full circle back to its roots as a (sports) talent representation agency formed by founder Mark McCormack when he agreed a pioneering deal in 1960 to represent US golfer Arnold Palmer, thus arguably kick-starting the recognition of sport as an industry in its own right.
Forstmann Little acquired IMG for $750 million in 2004 after the unexpected death of McCormack. Ted Forstmann, the founder of Forstmann Little, himself died in 2011.
As early as 2014, it was reported that the acquisition could prompt the merged group to launch an IPO to service the debt it had taken on to complete the acquisition.
In 2017, WME-IMG created Endeavor as a new holding company, recalling the name of the Endeavor Talent Agency, which took over the much larger William Morris Agency in 2009 to form WME, before merging with IMG in 2013.
At the time, Endeavor said that its family includes: “WME, a leading global entertainment agency representing a powerful client roster across motion picture, television, sports, music, books, digital and theater; IMG, a global leader in sports, events, media and fashion; UFC, the world’s premier professional mixed martial arts (MMA) organization; Droga5, Cannes Lions Independent Agency of the Year; Professional Bull Riders; The Miss Universe Organization; and Frieze, a leading arts and media company.