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Endeavor Formally Withdraws Plans to Go Public

Company pulled its IPO in September

Endeavor has formally withdrawn its plans to go public, the company said in an SEC filing on Wednesday.

“Pursuant to Rule 477 under the Securities Act of 1933, as amended (the “Securities Act”), the Company hereby requests that the Commission consent to the withdrawal of the Registration Statement effective as of the date hereof. The Company is seeking withdrawal of the Registration Statement because it no longer wishes to conduct a public offering of securities at this time,” the company said in the filing.

Endeavor was supposed to make its stock market debut last month but pulled its IPO a day before it was set to begin trading. At the time, Endeavor said it would “continue to evaluate the timing for the proposed offering.” Once Endeavor decided to pull its IPO, it was required by regulatory rules to formally pull the offering with the SEC. In its Wednesday filing, the company left the door open for a future IPO, which it would have to re-submit, saying it “requests that all fees paid to the Commission in connection with the filing of the Registration Statement be credited for future use.”

Endeavor’s decision to scrap its current IPO plans signaled that it was expecting a weak reaction from Wall Street.

The company has a lot of debt on its books since the acquisitions of IMG and UFC in the last few years. Conventional thinking in the investor community has been that Endeavor would need to go public to get out from under that debt. Investor insiders say that Endeavor may have overvalued what it thought the company would trade at when it opened.

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 the company’s 150 plus-page prospectus filed in May, Endeavor reported that it generated $3.61 billion in revenue in 2018, and had a net income of $231.30 million after two years of losses (Endeavor had a net loss in 2016 of $98.32 million followed by a net loss of $173.16 million in 2017). As of March 31, the company said it had $499.71 million in cash and cash equivalents, as well as $9.89 billion in total assets. Endeavor’s total long-term debt tallies $4.62 billion.

Emanuel tried to make the case that Endeavor is involved in virtually every aspect of the content business: “Content is no longer defined solely by the traditional categories our businesses were founded on. Television, movies and live events have been joined by others including podcasts, experiences, social media and multiplayer video games. Wherever you are in the world and whatever way you define content, Endeavor is likely playing a role.”

Endeavor was likening itself to a content company, but it’s not operating on the same level as Disney — with its TV networks, film studios, incomparable IP and upcoming streaming service — or even smaller film and TV studios like Lionsgate.