Endeavor has officially made a move that many from Wall Street to Hollywood have long expected, filing with the SEC to become a publicly traded company.
No range was given in the S-1 prospectus for how much the company hopes to raise from the initial public offering, though the 200-page document did include a range of financial statistics along with a memo from CEO Ari Emanuel. (Read the full memo below.)
“As the entertainment industry moves toward a closed ecosystem model with less transparency, our clients and businesses need more insight, resources and solutions than ever before,” Emanuel wrote. “We believe being a public company will only further accelerate our ability to look around corners and open up new categories and opportunities for those in the Endeavor network.”
For the year ending last December, according to the prospectus, Endeavor Group Holdings generated $3.6 billion in revenue, net income of $231.3 million, adjusted net income of $100.1 million and adjusted EBITDA of $551.1 million. Expanding from its talent representation roots, which were solidified with the 2009 merger with William Morris, Endeavor has tapped private equity and the debt market in order to acquire assets it sees as complementary, including the UFC and IMG. Through IMG, the company considerably deepened its involvement in sports, fashion and live events.
The Writers Guild of America, which has been locked in a dispute with agencies over the rise of production activity and the inherent complexities and conflicts thereof, has long been on the record as a skeptic of Endeavor’s IPO plan. In March, the guild blasted the notion of a public company aiming to please both Wall Street and its clients, priorities it deemed “impossible to reconcile.”
Even though talks are about to resume between the guild and the agencies, the dispute is acknowledged as a risk factor in Endeavor’s filing, which concedes that the duration of the fight is “unknown.” The outcome of the battle, it adds, “including the commercial landscape that will exist in the future between writers and agents, could have an adverse effect on our business.”
The other unknown is the condition of the IPO market. Uber investors salivated for months at the chance for the transportation disruptor to go public, only to see its market debut last week prove a disappointment. Shares in the company are trading at around $40, about 10% below their offering price.
After the offering, Endeavor Group Holdings will have four classes of common stock: Class A, Class B, Class X and Class Y common stock, the filing said, listed on the New York Stock Exchange under the ticker symbol “EDR.” Class A and Class X common stock will have one vote per share. Holders of Class Y stock will have 20 votes per share, and Class B shares will be non-voting.
Emanuel and Executive Chairman Patrick Whitesell, along with Silver Lake Partners, will own the majority of Class X and Y shares, with Silver Lake also owning most of the Class A shares. The Class A stock will be listed on the New York Stock Exchange under the ticker symbol “EDR.”
Here is Emanuel’s full memo:
In the early 1990s, I read George Gilder’s Life After Television. It changed the way I thought about content and distribution. That book was a catalyst that led me to leave a large, established talent agency to start a new and nimble one.
Industry leaders said there wasn’t room for this new ‘Endeavor,’ but we were focused on breaking new ground. We saw an opportunity to use disruption to our benefit and build a company and a platform for where the world was headed.
From the start, we knew we had to extend beyond television and become an impact player in the movie business. For that, we brought in my partner, Patrick Whitesell. Eight years later, we merged with the iconic William Morris Agency to diversify further into books, music, theater and non-scripted television. This merger launched a decade of growth for our company marked, in part, by more than 20 acquisitions — headlined by sports, fashion and media giant IMG and mixed martial arts leader UFC. These companies combined to form a platform distinguished not only by its longevity — having collectively withstood over 120 years of disruption — but also its access, scale and global network.
Content is no longer defined solely by the traditional categories on which our businesses were founded. Television, movies and live events have been joined by others including podcasts, experiences, social media, multiplayer video games and esports. Wherever you are in the world and whatever way you define content, Endeavor is likely playing a role.
As the demand for content continues growing, developing new distribution channels to complement our clients’ creative needs is essential. We’ve built a series of businesses across streaming, audio, experiences, gaming and education to ensure our clients and Endeavor are well-positioned for whatever the entertainment landscape looks like in the coming decades.
The trust that some of the world’s most influential creators and visionaries have placed in us to help guide their careers is both a privilege and a responsibility. Every decision we’ve made since those early days reflects our commitment to amplify their influence and maximize their economic potential. Our unique platform enables them to connect with each other and our IP and owned assets in ways that are far more meaningful than if approached in isolation.
As the entertainment industry moves toward a closed ecosystem model with less transparency, our clients and businesses need more insight, resources and solutions than ever before. We believe being a public company will only further accelerate our ability to look around corners and open up new categories and opportunities for those in the Endeavor network.
As a public company, we’ll continue:
• Navigating the ever-evolving definition of content
• Cultivating an environment that encourages connections across the platform and a forward-thinking approach to decision-making
• Aggressively advocating on behalf of those who’ve placed their trust in us
• Embracing diversity, inclusion and equality across our platform — content, clients and employees
• Defining success based on long-term growth and innovation, not short-term gains
This company has been a catalyst for culture-defining content for more than a century. We have a great responsibility to carry this mission forward.
We hope you join us as we begin this next chapter.