Endeavor is attempting to go public for the second time in three years, filing a new registration statement with the SEC on Wednesday.
This is the second time Endeavor is attempting to go public. In 2019, Endeavor Group Holdings — the company’s intended brand for the New York Stock Exchange — pulled its initial public offering one day before shares of the company were expected to begin trading in the public market.
Tesla founder Elon Musk will join the company’s board of directors. Additionally, Endeavor will buy out the remaining stake in the UFC that it doesn’t already own (Endeavor was already the leading shareholder). Endeavor will raise around $1.7 billion for the purchase with a group of private equity holders. If either the money is not raised or the sale doesn’t go through, the UFC deal will not be competed, according to the filing.
According to updated financial disclosures, Endeavor took a $625.2 million net loss in 2020, despite pulling in revenue of $3.5 billion. For the full year 2019, garnered $4.6 billion in revenue and a net loss of $530.7 million. Over the last two years, that net loss totals $1.2 billion.
“As challenging a year as 2020 was, it underscored the strength, creativity, and resilience of our people who mobilized time and time again in the face of overwhelming odds. We made difficult decisions but worked as a team to find creative solutions and best position the business for the future,” Endeavor CEO Ari Emanuel said in a letter that accompanied the filing. “As the global pandemic unfolded, we developed the protocols necessary to help our businesses safely restart operations, providing a model for other professional sports, events, and programs. UFC and PBR were two of the first sports organizations to responsibly return last spring, and we followed in the summer by hosting the WNBA’s season at IMG Academy. In the fall, we brought New York Fashion Week to life, becoming one of the first major events to resume in New York City. Meanwhile, we delivered virtual solutions to our more consumer-dependent live events and experiences–from speaking and book tours to art fairs to sports training–while Endeavor Content relied on our global network and local expertise to relocate and restart productions.”
Endeavor is the combination of sports, events, fashion and talent-management IMG and the agency WME. WME purchased IMG in 2014 for $2.3 billion. WME itself was the combination of the legendary William Morris Agency and Endeavor. The new Endeavor purchased the UFC in 2016. It also owns Miss Universe and the Professional Bull Riders tour. In 2017, Endeavor launched Endeavor Content, which it says has financed and/or sold more than 100 films and TV shows in the time that has followed.
In 2019, the company’s attempts to go public were partially hampered by the WGA’s dispute with the Big 4 agencies over packaging fees, which has since been resolved.
The company has a lot of debt on its books since the acquisitions of IMG and UFC in the last few years (and it’s grown to $5.7 billion at the end of 2020). Conventional thinking in the investor community has been that Endeavor would need to go public to get out from under that debt. Investor insiders told TheWrap back in 2019 that Endeavor may have overvalued what it thought the company would trade at when it opened.
The pandemic didn’t help matters, given that much of Endeavor’s businesses were hampered due to the months-long shutdown of film and TV production, along with sports. Though those have all come back in some form or another, Endeavor’s live events businesses have not. Right now it’s a race between the rollout of three approved vaccines against the growing spread of more contagious variants of the disease.