Endeavor has filed its prospectus for a possible IPO offering later this year, with updated financial disclosures revealing that parent company of WME, UFC and other sports and entertainment assets logged a $625.3 million net loss last year.
The document confirms Endeavor’s plan to acquire the remaining half of UFC that it does not own prior to its IPO. The company has a deal with a clutch of private equity companies to raise at least $1.7 billion in a private placement to buy out the remainder of UFC prior to the IPO. If Endeavor does not raise that money and does not go public, it won’t complete the UFC deal, the filing states.
Another surprise in the prospectus is that Tesla co-founder Elon Musk has joined Endeavor’s board of directors.
Endeavor pulled in revenue of $3.5 billion last year, when many of its businesses were rocked by pandemic-related shutdowns. The company planned to go public in 2019 but pulled back at the eleventh-hour amid market volatility and lukewarm demand. For the full year 2019, Endeavor disclosed it generated $4.6 billion in revenue and a net loss of $530.7 million.
As it steps back into public equities markets, Endeavor is emphasizing as it did in 2019 that the company consists of disparate assets that are designed to help WME and IMG clients make the most of opportunities in an increasingly direct-to-consumer world. Endeavor CEO Ari Emanuel talked up the power of Endeavor’s platform with access to talent at the center in the CEO’s letter to the prospectus that runs more than 300 pages.
“The power of the Endeavor platform has been on full display as we have brought commercial activity back online, guided our clients through an unprecedented set of events, and fostered innovation of new digital business models that will drive growth well into the future,” Emanuel wrote in the opening letter to the document. “The events of 2020 reminded us of the enduring value of premium intellectual property and content, while reinforcing the strength of our position within the sports and entertainment ecosystem,” he wrote.
Endeavor has sought to make its financial reporting more transparent by breaking down its revenue sources by segment, allowing investors to see how it is fairing with sports-related businesses, representation-related activity and events and experiences produced by Endeavor’s many units.
The list of private investment firms set to take part in the pre-IPO sale to fund the UFC purchase include China’s Tencent, Elliott Investment Management, Mudabala Investment Co., Capital Research and Management, Third Point, Tako Ventures, Zeke Capital Advisors and Silver Lake.
More to come