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WME parent Endeavor appoints new director

Endeavor Group Holdings, the parent company of WME Entertainment, has appointed veteran technology and media executive Jackie Reses to its board of directors.

Reses is CEO of investment firm Post House Capital and previously served as executive chair of financial services company Square. Prior to joining Square in 2015, Reses was chief development officer for technology Yahoo, and also served on the board of Alibaba Group.

She started her career at Goldman Sachs and later led the US media group at private-equity firm Apax Partners for 11 years.

Reses serves on the boards of Affirm Holdings, Pershing Square Tontine Holdings, TaskUs and ContextLogic, and is also chair of the Economic Advisory Council of the Federal Reserve Bank of San Francisco.

“I’m looking forward to partnering with Endeavor’s leadership to develop strategies that fully leverage the power of its diverse portfolio”

“We’re honoured to welcome Jackie to our board of directors,” says Ariel Emanuel, CEO of Endeavor. “Her leadership across corporate finance and enterprise technology, combined with her innate talent for driving innovation and cultivating culture, will be incredibly valuable to Endeavor as we continue charting our future as a public company.”

Reses joins a board of directors that includes Emanuel, Endeavor executive chairman Patrick Whitesell, Silver Lake co-CEO Egon Durban, Silver Lake managing director Stephan Evans, Uncle Nearest CEO Fawn Weaver, Tesla CEO Elon Musk and former Xerox Corporation and Veon chair and CEO Ursula Burns.

“It’s great to join Endeavor’s board at this pivotal time,” adds Reses. “I’m looking forward to partnering with Endeavor’s leadership to develop strategies that fully leverage the power of its diverse portfolio and help propel its continued growth across the sports and entertainment landscape.”

Endeavor increased turnover by nearly US$500 million and paid off $600m of debt in the second financial quarter of 2021.

 


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WME gears up for huge return to live

Powerhouse agency WME is expecting a boom period for the company as live entertainment resumes, with bookings well above where they were even in the pre-coronavirus era, CEO Ari Emanuel has said.

Speaking yesterday (16 August) during parent company Endeavor’s Q2 2021 earnings call, Emanuel, who took Endeavor public earlier this year, explained: “Our WME bookings for the second half of 2021 are double digits over where they were at the same point in 2019, the most recent non-Covid-impacted year.”

Endeavor CFO Jason Lublin said country music is “leading the way” for a rebound in live music in the US in the second half of 2021, with highlights including sold-out tours by Garth Brooks and Eric Church. “As Ari mentioned, we’re pacing ahead as relates to WME booking for the second half of the year, and we’re booking clients for dates much further into the future,” he added.

Endeavor increased revenue to US$1.1 billion in the second quarter of 2021 – up around $650 million on Q2 2020 – and expects adjusted earnings before interest, taxes, depreciation and amortisation (ebitda) of $765–775m for the whole year. The company paid $600m worth of outstanding debt in Q2, reducing its total debt to $5.351bn (compared to $5.872bn in Q1 2021).

In its representation unit (comprising WME, IMG and Endeavor Content) specifically, Endeavor reported revenue of $328.2m (up from $192.8m year on year) and adjusted ebitda of $61.7m (compared to $52m in Q2 2020).

“We have experienced recovery in our business happening slightly faster than we had originally anticipated”

“We have experienced recovery in our business happening slightly faster than we had originally anticipated,” Lublin continued. “And although we continue to closely monitor the delta variant, bookings, ticket sales and other indicators remain positive for the balance of the year.”

According to Emanuel, Endeavor’s strength lies in its diversity, with the business also including sports properties including Ultimate Fighting Champtionship (UFC) and corporate hospitality businesses such as On Location Experiences.

“If you want to think about the whole picture, when you look at the other companies that trade in our space – whether it be WWE, Formula 1, Live Nation – they’re all one-trick ponies,” he told analysts. “We have multiple facets, whether it be sponsorship or sports properties, representation, On Location – there are multifaceted aspects of our business, and we have gone through the pandemic, and we’re raising EBITDA, we’re raising guidance…

“I think you guys are going to learn that we’re a multifaceted business that we get to pivot back and forth from. […] The company has multiple different aspects of our business that protect us against anything in the future.”

Endeavor’s latest quarterly report can be read in full here.

 


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Endeavor-run biz acquires dynamic ticketing firm

WME parent company Endeavor has acquired Qcue, a software developer for dynamic ticket pricing in the live events industry.

Terms of the deal, which was made through Endeavor’s experiential events firm On Location Experiences (acquired in early 2020), have not been disclosed.

According to The Hollywood Reporter, Qcue’s technology, which helps rights holders optimise ticket pricing and maximise sales based on market demand, will be integrated into On Location’s suite of hospitality offerings.

On Location offers corporate clients and others fans access to marquee events like the Olympic and Paralympic Games, Super Bowl, NCAA Final Four and New York Fashion Week. Its overall list of 150 entities also includes artists and festivals, such as Coachella and Bonnaroo, as well as unique experiences owned by On Location.

Qcue, founded in 2007, provides sports teams and entertainment outfits with ticket pricing, analytics, data visualisation, inventory management and efficiency tools.

“[The deal will bring] top-of-the-line dynamic pricing technology and a stellar team of ticketing experts in-house”

Its clients include Major League Baseball teams, college athletic departments and Australian Football League teams. The company will continue to operate out of its headquarters in Austin after the deal has closed.

In announcing the deal, On Location estimated that Qcue has made more than 35 million price changes, generating more than $300 million in incremental revenue for its partners.

“We are thrilled to join forces with Qcue, bringing top-of-the-line dynamic pricing technology and a stellar team of ticketing experts in-house,” On Location CFO Jon Lavallee said in a press release. “Together, we will optimise On Location’s approach to ticketing and pass that benefit on to our valued partners.”

Along with On Location, Endeavor also owns the IMG sports agency and the Ultimate Fighting Championship (UFC).

The company posted a small profit of US$2.4 million in the first quarter of 2021 – the firm’s first since becoming a public company in April.

 


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Endeavor profitable in first quarter of 2021

WME parent company Endeavor posted a small profit of US$2.4 million in the first quarter of 2021, its Q1 financial results – the firm’s first since becoming a public company in April – reveal.

Endeavor, which also owns the IMG sports agency and the Ultimate Fighting Championship (UFC), among other properties, increased its net income from the -$51.3m it reported for the same period last year. Revenue for Q1 2021 totalled $1.07 billion, down slightly from the $1.19bn in Q1 2020, while operating income came to $94.5m, up from $53.8m year on year.

Speaking during yesterday (2 June)’s earnings call, Endeavor CEO Ari Emanuel noted that the growth was driven primarily by its ‘owned sports properties’ segment – one of three business units, along with representation (ie the agencies) and events, experiences and rights – which saw revenues rise 22%, to $283.5m. This segment comprises UFC, Professional Bull Riders (PBR) and Euroleague basketball.

Other significant Covid-era demand is coming from its events and experience business, which includes corporate hospitality firm On Location (acquired just before the pandemic), which was recently named global hospitality provider of the Olympic Games.

The representation unit (comprising WME, IMG and Endeavor Content) continues to be hit by restrictions on events, registering a 15% dip in year-on-year revenue, to $248.9m.

“Artists of all kinds are desperate to get back out and tour”

However, booking agency WME is seeing “brisk ticket sales for upcoming concerts,” explained Emanuel. “The pre-sale for the first event of On Location’s Mexico-based beach concert series, featuring WME client Dead and Company, sold out both its January 2022 weekend dates, and the next event featuring WME client Luke Bryan had its fastest sell-out in its seven year history.”

While live music hasn’t “done exactly a 180, we have high demand, coupled with favourable pricing and yield, and artists of all kinds are desperate to get back out and tour, to see, to greet their fans,” Emanuel added.

“We are locking down major arena tours for 2022 – and to make up for a year away from performing live, many of these tours are multi-year, spanning broad territories across North and South America, Europe and Asia.”

WME artists include Drake, Justin Timberlake, Adele, Bruno Mars, Pearl Jam, Kendrick Lamar, the Killers, Bjork, Frank Ocean, Foo Fighters, St Vincent, Shakira and more.

 


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Endeavor closes first day on Nasdaq up 5%

Endeavor Group Holdings, the parent company of international booking agency WME, is finally a listed company after shares began trading on New York’s Nasdaq stock market yesterday (29 April).

Endeavor’s or stock market launch, or ‘initial public offering’ (IPO), sees nearly 25 million shares of the company’s class-A stock offered to the market at US$24 per share, and is expected to close on Monday 3 May.

At the close of market yesterday, Endeavor (EDR) shares were priced at $25.20 – up $1.20 on the IPO price, but down from a daily high of $28.47 – with a trade volume of nearly 16m shares for the day.

Endeavor expects to raise around $1.8bn from the share sale, which also includes a private placement of 74.5m shares being sold to an investment group that includes the likes of Silver Lake Partners, Tencent, Dragoneer Investment Group, MSD Capital and Abu Dhabi’s Mubadala Investment Company.

Endeavor plans to use $835.7m of the proceeds to buy the remainder of UFC

Silver Lake, which also owns shares in Oak View Group and MSG Entertainment and a majority stake in TEG, is an existing Endeavor investor, while Tencent has partnered with WME on joint ventures in China. Dragoneer, meanwhile, recently bought into one-to-watch videogaming platform Roblox.

Endeavor says it plans to use $835.7m to buy the remainder of Ultimate Fighting Championship (UFC), in which it acquired a majority stake in 2016, with other new funding put towards future joint ventures, investments and acquisitions.

The Nasdaq listing is Endeavor’s second attempt to take the company public, following an aborted flotation in 2019 amid unfavourable market conditions. Yesterday’s successful IPO came despite a 24% drop in revenues, to $3.5bn, in 2020 owing to the impact of the coronavirus pandemic.

In addition to WME and UFC, Endeavor’s portfolio includes sports agency IMG, comedy agency Dixon Talent and the Miss Universe pageant.

 


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WME ups pay for assistants

Talent agency William Morris Endeavor, together with the film-focused Endeavor Content, has announced a raft of measures to improve working conditions for assistants in the agencies’ Los Angeles, Nashville and New York offices.

IQ can confirm that assitants in WME’s UK offices are also receiving a pay rise, of £3,000, with an annual base increase of £1,000. For all new hires, the starting salary will be between £23,000 and £28,000. Changes are also to be rolled out shortly at WME’s Australian offices too, according to Deadline,.

Endeavor CEO Ari Emanuel laid out the new plans in a company email last week, raising minimum pay for new hires and assistants in the US from $15 an hour to $18 an hour. Assistants will receive a further $2 an hour after completing their first year at the agencies.

The company also announced plans to further increase the minimum salary for all to $20 an hour by August 2021.

Assistants will also now be eligible for ten hours of overtime a week without pre-approval and will be considered for “discretionary bonuses”.

In addition to the pay rise, all WME and Endeavor Content assistants in the US will be eligible for two years of monthly medical premiums paid by the company. Assistants and coordinators will also have access to student loan relief of $1,000 after the first anniversary of hire, with an additional $2,000 after the second anniversary of hire.

“We congratulate WME on joining the growing ranks of entertainment companies committed to improving pay and work conditions for support staff”

The agencies are also making $50 a month available as reimbursement towards mobile phone expenses and, in a more symbolic move, inserting assistant names into email addresses, which previously were nameless.

According to the agency, the changes were planned to be announced sooner – fellow agencies CAA, ICM and UTA raised assistant pay in early 2019 and early 2020 respectively, in response to the #PayUpHollywood movement – but were pushed back due to the financial implications of the Covid-19 crisis.

WME is among major talent agencies to implement cost cutting measures in the past few months due to the pandemic, with around 20% of its global workforce subject to lay-offs, furloughing or pay and working hours reductions.

“While #PayUpHollywood is not privy to the contents of the WME email that was sent, the initial news announcing pay increases and additional benefits for support staff is heartening,” comment the movement’s founders, Liz Alper and Deirdre Mangan.

“We encourage WME to continue monitoring support staff workload and treatment to ensure the wellbeing of their most vulnerable employees.

“We look forward to the details of these initiatives and congratulate WME on joining the growing ranks of entertainment companies committed to improving pay and work conditions for support staff. It is proof that change, though slow, does happen, as long as allies and assistants continue speaking out.”

 


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CAA latest agency to dock pay amid Covid-19 crisis

Creative Artists Agency (CAA) announced it is implementing salary cuts of up to 50% across the agency yesterday (8 April).

The salary reductions, first reported by the Hollywood Reporter, follow similar pay cuts made at fellow agencies UTA, Paradigm, APA and WME parent company Endeavor.

The pay reductions will be company wide and calculated in proportion to wages, with higher earners taking bigger cuts. Co-chairmen of the agency, Richard Lovett, Bryan Lourd and Kevin Huvana will forgo the remainder of their salaries for the year, in a step also taken by heads of Endeavor, UTA and Paradigm.

“In this time of tremendous uncertainty we must look closely at what measures help ensure CAA always remains the strongest company for our employees and clients”

“In this time of tremendous uncertainty for individuals, businesses, governments and communities, it is incumbent upon us to look closely at what measures help ensure CAA always remains the strongest company for our employees and clients,” reads a statement issued by the agency.

“We deeply appreciate not only the understanding that employees across the company have demonstrated since this unprecedented global crisis began, but also the remarkable support and compassion colleagues have shown one another, clients and many in the community in need.”

CAA has yet to announce any layoffs due to the coronavirus outbreak.

Photo: Minnaert/Wikimedia Commons (CC BY-SA 3.0) (cropped)

 


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Endeavor confirms On Location acquisition

Endeavor has confirmed the acquisition of a majority stake in On Location Experiences, a luxury hospitality firm formerly part of the US’s National Football League (NFL).

The deal, reportedly worth US$660 million, sees Endeavor – the parent company of global booking agency WME Entertainment, among others – acquire On Location from its current owners, RedBird Capital Partners, Bruin Sports Capital, the Carlyle Group and 32 Equity. The NFL remains a minority shareholder through 32 Equity.

News of the acquisition was first reported last September, ahead of Endeavor’s ultimately scrapped initial public offering.

“By bringing together a leader like On Location with Endeavor’s access and reach, we can advance the way consumers and brands think about money-can’t-buy experiences,” says Ariel Emanuel, CEO of Endeavor.

“Partnering with the NFL will enable us to leverage the best-in-class executions around one of the biggest events in the world, the Super Bowl, and extend this same level of service and experiences to other sports and entertainment properties globally.”

“Together […] we can advance the way consumers and brands think about money-can’t-buy experiences”

On Location organises experiences for both corporate clients and fans around major sports and entertainment events, including the Super Bowl Music Fest, which last year featured Cardi B, Bruno Mars and Aerosmith.

“We are excited to partner with Endeavor to grow On Location Experiences globally,” comments NFL commissioner Roger Goodell.

“We are committed to offering NFL fans unique and first-class experiences at our events. On Location shares this commitment and delivers value for its partners and delights fans at events around the world.”

The new Endeavor-owned On Location Experiences will be led by president Paul Caine, formerly of Bloomberg, Time Inc. and Westwood One.

 


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Silver Lake invests in OVG Manchester arena partner

Silver Lake, a private equity firm with stakes in a number of major live entertainment companies, has acquired a US$500 million stake in Manchester City Football Club owner City Football Group (CFG), the partner on Oak View Group’s (OVG) new arena project.

The buy-in, which sees the investor take control of more than 10% of CFG, complements the $100m investment Silver Lake made in venue development group OVG last year.

OVG is currently working in partnership with CFG on building a major new concert venue in the Eastlands area of Manchester, home to the football club’s Etihad Stadium. The arena project entered into its second round of consultation meetings yesterday (Thursday 28 November), the day after Silver Lake announced its CFG investment.

“We and Silver Lake share the strong belief in the opportunities being presented by the convergence of entertainment, sports and technology”

“We and Silver Lake share the strong belief in the opportunities being presented by the convergence of entertainment, sports and technology,” comments CFG chairman Khaldoon Al Mubarak.

Silver Lake has invested heavily in the entertainment industry in recent years and currently owns 100% of Asia-Pacific live entertainment giant TEG, 51% of WME/UFC parent company Endeavor and 8.4% of Madison Square Garden Company.

The investor’s most recent deal places CFG at a valuation of $4.8 billion – a record for a sports group. According to the Financial Times, the $500m cash injection will help fund CFG’s acquisition of more football clubs globally, as well as the planned construction of a new stadium in New York.

 


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CAA to perform $393m employee share buyback

Amid a backdrop of postponed initial public offerings, Creative Artists Agency (CAA) is reportedly looking to repurchase employees’ equity, as an alternative method of improving liquidity.

As first detailed in the Hollywood Reporter, LA-based talent agency CAA is in the process of raising US$393 million in order to buy stakes held by its agents and executives.

It is believed that the agency is looking to borrow $1.15 billion in a seven-year loan to refinance at a more favourable interest rate of $757. The remaining $393m would be used to fund the buyback of shares from a number of employees.

Many of the stakeholders, who make up only a select group of senior employees, are understood to have bought shares when private equity fund TPG became majority owner in 2014.

The deal would allow CAA to cash out equity while avoiding an IPO. Endeavor, the parent company of fellow talent agency WME, recently put plans for its own IPO on hold, after receiving a lukewarm reception from investors.

Other companies recently attempting IPOs have met similar fates. Office rental company WeWork halted plans following concerns from investors, whereas shares of static exercise bike business Peloton plummeted 11% upon close of its first day of public trading.

Arrangers of the CAA deal include current majority stakeholder TPG, along with Bank of America, Credit Suisse and UBS.

 


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