Is Ari Emanuel finally taking Endeavor public?
After years of speculation that Endeavor, the multimedia talent and entertainment company, would go public, it’s finally setting the wheels in motion. According to a report in the Wall Street Journal, the company is preparing to file paperwork for an IPO that would happen later this year.
An IPO has been rumored ever since Ari Emanuel and Patrick Whitesell merged their Hollywood talent agency, Endeavor (then known as William Morris Endeavor, or WME), with the sports and modeling agency, IMG, in 2013, and in the process created the biggest talent agency in Hollywood. Since then, Endeavor has grown substantially through the $4 billion acquisition of Ultimate Fighting Championship, Professional Bull Riders, the Frieze Art Fair, and the marketing agency 160over90, which it bought for $200 million. Endeavor, which was valued at $4 billion in 2018, has also launched its own producing arm, Endeavor Content, among other ventures. The combination of all these assets is a multimedia talent and production shop that is less dependent on outside distributors and can create content seamlessly from within.
The move away from pure talent representation has been seen across Hollywood at agencies like CAA and UTA, as stars’ salaries decline and TV shows draw smaller numbers of viewers due to the proliferation of entertainment choices. The current battle between agencies and the Writers’ Guild of America (WGA) over the practice of “packaging” TV shows–a system that has provided a significant revenue stream to agencies over the years–is another sign of how agencies’ traditional financial security is waning.
The timing of the IPO is surprising, however, given the current feud with the WGA. One of the WGA’s main messages to writers is that agencies are no longer solely focused on representing talent, but have grown to become multimedia behemoths that are more concerned with meeting the bottom line and serving their investors. An IPO doesn’t exactly counter that narrative, and Endeavor’s financials will be much scrutinized, especially given the novelty of an agency becoming a publicly traded company.
Indeed, Friday afternoon, the WGA released the following statement regarding the potential Endeavor IPO: “Today’s announcement that Endeavor plans to become a publicly traded company only strengthens the call for the conflicted and illegal practices of the major talent agencies to end. It is impossible to reconcile the fundamental purpose of an agency–to serve the best interests of its clients–with the business of maximizing returns for Wall Street. Writers will not be leveraged by their own representatives into assets for investors.”
An IPO could allow Endeavor’s investors, including the private-equity firm Silver Lake Partners and the Japanese conglomerate SoftBank group, to cash in at least part of their stakes. In 2012, Silver Lake invested $200 million for 31% of the company and another $500 million for an additional 20% stake in 2014. Softbank invested $250 million for a 5% stake in 2016.
In a 2016 profile of Endeavor in Fast Company, Emanuel said, “Now 50% of our business we own, and it’s ours to lose. We can only fuck it up. We can no longer say, ‘The client didn’t do that. The buyer didn’t do that.’ It’s ours. We either win or we lose.”
Disclosure: Fast Company editorial staff is in the process of unionizing and is represented by the Writers Guild of America-East.
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