It is act two for leisure big Endeavor’s IPO

Ari Emanuel, the stubborn Hollywood super agent, won’t let a setback get him down.

And so after a year in which the prediction of the impending implosion of Endeavor Group Holdings became a spectator sport, and around 18 months after Endeavor pulled out of its much-anticipated IPO, the owner of talent agency WME, the Miss Universe Pageant and the UFC sports league is aiming again for an IPO.

Endeavor announced its IPO plans on Wednesday in a filing from the Securities and Exchange Commission.

Founded in 1995, the entertainment company, which also owns production company Endeavor Content and sports agency IMG, had sales of $ 3.47 billion in 2020, a net loss of $ 625.3 million.

Endeavor did not disclose the expected amount, other than a stand-in worth of $ 100 million. However, the records indicated that Endeavor plans to acquire the remaining shares in the Ultimate Fighting Championship of the Mixed Martial Arts League. It currently has a 50.1% stake in the UFC.

Emanuel’s second shot in an IPO, expected later this year, would be the first public offer from a Hollywood agency owner and a repayment opportunity for the company’s founder.

The public offering takes place in the midst of a tumultuous time for agencies whose profits have been hurt by the surge in streaming and the aftermath of the COVID-19 pandemic that shut down productions and live entertainment.

In March last year, the company announced wage cuts and layoffs across the company. Emanuel and his partner, Executive Chairman Patrick Whitesell, waived their own salaries for the year.

Sport is a growth area for agencies looking to diversify their revenue streams and reduce their reliance on the traditional talent advancement business. In October, for example, ICM Partners acquired Stellar Group, a London-based sports representation agency with more than 800 athletes.

UFC has been very profitable for Endeavor, which, along with a group of investors, acquired the Mixed Martial Arts League for $ 4 billion in 2016. MMA was the first major sport to return to scheduled live events. The match between UFC 249: Ferguson and Gaethje took place in Jacksonville, Florida on May 9th.

Endeavor declined to comment.

Citing market volatility, Endeavor scrapped its first attempt at IPO in September 2019, one day before the start of trading. It was expected to raise up to $ 600 million and the company was valued at $ 8 billion. The offer should also fund Emanuel and Whitesell’s ambitious plans to build the media company of the future and fund future acquisitions while repaying the heavy debt burden, which was then trading at $ 4.6 billion.

This time, Endeavor is hoping for a better, if more modest, reception from Wall Street.

“With this IPO, Endeavor can distinguish itself as the winner of the reopening,” said Lloyd Greif, investment banker in Los Angeles. “When the vaccinations go out and TV and movie production opens, the UFC and professional bullfighting – all of the things directly related to live events will benefit the company and, based on the current state, become a growth story will.”

Greif, however, cautioned that Endeavor is adjusting to a more modest offer and rating.

“Endeavor was clearly not a growth story in the past 12 months. It has to be hit by the pandemic, but now there is light at the end of the tunnel, ”he added. “I’m sure you have mixed feelings about not getting the rating you wanted [the first time]. In retrospect, it was a pretty good rating; Because of COVID, there was no other place than a descent. This will be a lower valuation despite a strong market. “

In May, Endeavor sold part of its stake in Epic Games, publisher of the popular Fortnite title, for an estimated $ 80 million. In the same month, Endeavor announced that it had raised $ 260 million in a debt offering, mainly from the investment firm Oaktree Capital. The loan arranged by JPMorgan Chase was used to fund operations during the pandemic.

WME and other top agencies are also looking into the terms of new agreements with the Writers Guild of America. Under one recently announced deal, WME and its investor Silver Lake will reduce their stake in Endeavor content to 20% or less and finish packaging – where an agency charges fees for bringing talent together for a project – by the end of June 2022.

In 2012, Silver Lake invested $ 200 million in WME in return for a 31% stake in the company, and two years later increased the stake by an additional $ 500 million for an additional 20% stake. In 2016, Softbank invested $ 250 million in a 5% stake in WME.

In May last year, Endeavor president Mark Shapiro told The Times, “There are so many … rumors” spreading speculation that the company was preparing to file for bankruptcy protection from creditors. “We made very responsible and prudent decisions to reshape our cost structure in the face of the pandemic.”

Despite the canceled IPO, cost-cutting measures, and industry issues, Endeavor continued to make acquisitions. In November 2019, the company acquired Harry Walker Agency. In January 2020, On Location Experiences, an events business founded by the National Football League, opened for $ 600 million.

Morgan Stanley leads the offer along with Goldman Sachs, who handled the first round.

The Times staffer, Wendy Lee, contributed to this report.