(Bloomberg) -- Endeavor Group Holdings Inc., led by talent agent turned media mogul Ari Emanuel, filed for an initial public offering, the first major Hollywood agency to announce plans to go public.
Endeavor in its filing Thursday for an IPO listed the amount to be raised as $100 million, typically a placeholder that will change when the company discloses its share price target range.
Emanuel started Endeavor in 1995 with three colleagues from International Creative Management, one of Hollywood’s largest talent shops. Up until a few years ago, his biggest deal was swallowing William Morris Agency, a larger and much older talent agency.
Over the past few years, Emanuel and Patrick Whitesell have transformed Endeavor from a boutique talent agency into a multi-pronged media giant that runs sports leagues, hosts fashion events and represents leading athletes as well as entertainers. Endeavor’s clients include Dwayne Johnson, tennis star Maria Sharapova and celebrity chef Bobby Flay. Talent representation now accounts for less than half of its revenue.
In 2016, it acquired Ultimate Fighting Championship, the world’s biggest mixed martial arts match promoter, for $4 billion.
“Content is no longer defined solely by the traditional categories on which our businesses were founded,” Emanuel wrote in a letter to potential investors that was included in the IPO filing Thursday. “Television, movies and live events have been joined by others including podcasts, experiences, social media multiplayer videos games and esports.”
Debt, Profit
Endeavor has raised billions of dollars from private equity firms to fund its expansion, and now has more than $4.6 billion in long-term debt as of March 31, according to its filing. The company gave back $400 million from Saudi Arabia’s investment fund after the government was linked with the killing of journalist Jamal Khashoggi.
The Beverly Hills, California-based company had revenue of $3.61 billion in 2018, up from $3 billion the previous year, the filing shows. Based on income attributed to its operating company, Endeavor said it had a profit of $317 million last year, compared with a net loss of $61 million in 2017.
Most of its revenue -- $2.27 billion last year --- came from entertainment and sports content and events, according to its filing. Talent representation accounted for $1.31 billion, with the rest of its revenue coming from its Endeavor X unit that includes streaming services and other digital businesses.
Endeavor is a holding company whose primary asset will be its operating company. Endeavor will continue to be substantially controlled by Emanuel, Whitesell and other current investors after the IPO, according to the filing.
Endeavor flagged its battle with Hollywood writers as a risk to its IPO, noting that the Writers Guild of America terminated its franchise agreement with the trade association to which the talent agency belongs. “The outcome of the dispute, including the commercial landscape that will exist in the future between writers and agents, could have an adverse effect on our business,” according to the filing.
The offering is being led by Goldman Sachs Group Inc., KKR & Co., JPMorgan Chase & Co., Morgan Stanley and Deutsche Bank AG. Endeavor applied to trade its shares on the New York Stock Exchange under the symbol EDR.
©2019 Bloomberg L.P.
RECOMMENDED FOR YOU
POPULAR