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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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Liberty Media launches $500m+ acquisition vehicle

Liberty Media, the US media, communications and entertainment giant which owns just over a third of Live Nation, is on the hunt for a new addition to its corporate portfolio.

The firm, which also owns Formula 1, satellite radio company SiriusXM and the Atlanta Braves baseball team, among other interests, has launched Liberty Media Acquisition Corporation (LMAC), a so-called special-purpose acquisition company (SPAC) with which Liberty intends to search for a “target in the media, digital media, music, entertainment, communications, telecommunications and technology industries”.

The SPAC – a type of shell company which allows for a launch on the stock market, in LMAC’s case New York’s Nasdaq, without going through the traditional initial public offering (IPO) process – launched on Friday (22 January) and is initially trading under the Nasdaq stock symbol LMACU.

LPAC is targeting a business in the media, music, entertainment, communications, telecommunications and technology industries”

Shares in LMACU were initially priced at US$10 each, with 50 million units up for grabs, giving LMAC an IPO price of $500m. The SPAC opened for trading at 32% above that, at $13.20 per share.

As of 25 January, the LMACU units – each of which comprise a share of series-A common stock, along with a fifth of a warrant which may be redeemed for another share of series-A stock, at $11.50 per share – were worth $13.

LMAC is led by Liberty Media CEO Greg Maffei (pictured) and other members of Liberty’s management team, with Citigroup, Morgan Stanley, Credit Suisse and Goldman Sachs underwriting the IPO as joint bookrunners.

On 19 January, Live Nation’s share price reached an all-time high of $76.54, despite the ongoing impact of the Covid-19 pandemic.

 


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Roblox valued at $30bn ahead of direct listing

Online videogaming platform Roblox, which recently held its first in-world concert, has raised US$520 million in a new funding round which values the company at $30 billion.

The series-H round sees investment companies Altimeter Capital and Dragoneer Investment Group buy into Roblox at a price of $45 per share. The California-based company announced its intention to go public in November, and said yesterday (6 December) it will proceed with a novel Spotify-style direct listing on the stock market in the near future.

Other investors participating in the funding round are the Investment Group of Santa Barbara and, more interestingly, Warner Music Group, whose artist Ava Max participated in a Roblox album launch event in October.

“We’re thrilled to welcome Altimeter, Dragoneer and the other new investors,” comments David Baszucki, CEO and co-founder of Roblox. “We look forward to working with all of them as we continue our mission to build a human co-experience platform that enables shared experience, from play to work and learning, among billions of users.”

“Roblox has built a unique and imaginative virtual experience with a growing, loyal community”

Brad Gerstner, CEO of Altimeter, says: “While once viewed as a gaming platform, Roblox has emerged as a definitive global community connecting millions of people through communication, entertainment and commerce. And, as the world moves toward a hybrid future – where online and offline community and learning co-exist – we are proud to back a values-driven business that takes seriously its obligation to build an inclusive, creative and positive community.”

“Roblox has built a unique and imaginative virtual experience with a growing, loyal community, and we’re excited to have the opportunity to support the company at this stage of its development,” adds Marc Stad, founder and managing partner of Dragoneer. “We look forward to partnering with the Roblox team as they continue to execute on a compelling growth strategy and capitalise on the substantial opportunities ahead.”

Speaking to IQ shortly after Lil Nas X played Roblox’s first virtual show, the company’s head of music, Jon Vlassopulos, predicted a future where fans will no longer need to “pick real world or virtual [concerts] once lockdowns are over – they can have both.” Read the full, in-depth interview, which also touches on lessons learned from the Lil Nas X show, as well as the future of music and entertainment more broadly, here.

Roblox: “The concert market is going to get a lot bigger”


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Roblox files for $1bn stock market launch

The company behind tween-friendly social gaming platform, Roblox, is filing for a $1 billion initial public offering (IPO) after its popularity soared during the pandemic.

According to the company’s prospectus, the platform now has 31.1 million daily users who have spent an average of 2.6 hours per day in the game this year.

The platform, which launched in 2004, hosts a collection of more than 50 million user-created video games (sometimes compared to YouTube, but for games rather than videos).

The company makes money when these games offer in-app purchases, and it gets a cut of sales of the in-app currency Robux.

The platform stepped up its interest in music in August 2019 with the appointment of a global head of music, Jon Vlassopulos, a former director of business development at BMG and founder of Tinder-style swiping music discovery app Fab.fm.

Earlier this year, Roblox created a virtual concert venue, hosting an in-game live stream of the Lady Gaga-curated benefit concert One World: Together at Home.

The platform now has 31.1 million daily users who have spent an average of 2.6 hours per day in the game this year

Roblox has also joined social virtual-reality platform Sansar and video game developer Psyonix in partnering with Canadian indie label Monstercat, which also has its own licensing subscription service to allow game streamers to use its music on YouTube and Twitch.

The partnership gives Roblox developers access to a new library of music content to use when making games for the platform, which is comprised of millions of games built by professional developers and the Roblox user community.

Roblox’s involvement in music hit its peak this month, however, when the platform delivered its first in-game concert with Lil Nas X.

The double Grammy award-winning rapper behind worldwide smash ‘Old Town Road’ delivered a free-to-access concert experience which garnered 35 million visits, rivalling Travis Scott’s record-breaking Fortnite concert.

The show, which took place in partnership with Nas’s label, Columbia Records, featured a set of stages inspired by Lil Nas X’s songs and videos and aired three times across 14 and 15 November.

Roblox also recently hosted an album release party for singer Ava Max which was attended by 1.2m players.

 


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WMG announces $100m social justice fund, IPO price

Following Black Out Tuesday yesterday, Warner Music Group (WMG) has announced a US$100 million fund to support charitable causes “related to the music industry, social justice and campaigns against violence and racism”.

The fund – jointly financed by WMG and the Blavatnik Family Foundation, the charitable foundation run by WMG vice-chairman Sir Leonard Blavatnik, whose Access Industries is the group’s majority owner – will support individuals and “organisations strengthening education, and promoting equality, opportunity, diversity and inclusion” in the music industry, according to WMG.

Along with the other two major labels, Universal Music and Sony Music, and all major live music industry companies, Warner Music was supporter of #TheShowMustBePaused initiative, which saw the music business come to a halt for on 2 June in solidarity with those protesting for racial justice.

Steve Cooper, CEO of Warner Music Group, says: “This fund will support the extraordinary, dedicated organisations that are on the front lines of the fight against racism and injustice, and that help those in need across the music industry.

“This fund will support the extraordinary, dedicated organisations that are on the front lines of the fight against racism and injustice”

“Our advisory panel, which will draw from a diverse cross-section of people from our team and the wider community, will help us be very thoughtful and accountable in how we make an impact. We’re determined to contribute, on a sustained long-term basis, to the effort to bring about real change.”

Today (3 June) also sees WMG’s return to the stock market after nine years, with a previously announced flotation (IPO) on New York’s Nasdaq set to raise nearly $2 billion from the sale of 77m shares for $25 apiece. Blavatnik purchased WMG for $3.3bn in 2011.

In addition to its labels and publishing arm, WMG has multiple live music interests, including concert discovery platform Songkick, Finnish promoter Warner Music Live and management company Umbrella Artists Productions, which it owns with German promoter FKP Scorpio.

 


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Eventbrite IPO investor lawsuit dismissed

Eventbrite has beaten a class-action lawsuit that accused it of misleading investors at the time of its September 2018 flotation.

As previously reported, the suit – filed on behalf of claimants who purchased Eventbrite stock in the company’s initial public offering (IPO) at US$23 a share – alleges the ticketing company deceived potential buyers in its IPO registration statement by declaring that the acquisition of Ticketfly “had a positive impact on net revenue growth” in the third quarter of 2017, when in fact the migration was progressing more slowly than stated, delaying integration and negatively affecting growth.

San Francisco-based Eventbrite denied the allegations, its lawyers calling the case without merit and saying the complaint contains no “facts suggesting that Eventbrite made any false or misleading statements of material fact”.

On Tuesday (28 April), California judge Edward Davila ruled in favour of Eventbrite, according to Law360, granting the company’s bid to dismiss the suit in its entirety, while giving the investors a chance to amend their complaint by 24 June to make it more specific.

Judge Edward Davila ruled in favour of Eventbrite, granting the company’s bid to dismiss the suit in its entirety

“Plaintiffs’ vague allegations that the Ticketfly acquisition was ‘delayed’, ‘costly’ and that the integration missed ‘key features’ are insufficient to show that defendants ‘affirmatively’ created an impression of a state of affairs that differs in a material way from reality”, said Davila, adding: “In fact, a closer inspection of Eventbrite’s SEC filings appears to belie plaintiffs’ claims that the company projected that the Ticketfly integration was going ‘smoothly’”.

The suit was filed following a plunge in Eventbrite’s share price, from a high of over $32 to less than $16 in June 2019.

In common with other live entertainment companies, Eventbrite shares have plummeted further as a result of the ongoing Covid-19 pandemic, with stocks trading at just shy of $10 at press time, up from a low of $5.86 on 3 April.

 


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Warner Music Group files for IPO

Label giant Warner Music Group (WMG), which owns a number of live assets in addition to its recorded music interests, has announced plans for an initial public offering (IPO).

The number of shares of common stock to be offered and the price of the offering have not yet been disclosed.

The announcement signals WMG’s return to the stock market, where it traded until 2011, before being bought by British billionaire Len Blavatnik through his company Access Industries for US$3.3 billion.

The news comes after the recent valuation of rival Universal Music Group at over US$30 billion, following Chinese entertainment giant Tencent’s acquisition of a 10% stake in the company.

The announcement signals WMG’s return to the stock market, where it traded until 2011

The Warner Music Group includes the records labels Warner, Atlantic, Elektra and Parlophone, publishing and global music distribution arms and is home to artists including Ed Sheeran, Cardi B, Dua Lipa and Bruno Mars.

WMG’s live music interests include concert discovery platform Songkick, Finnish promoter Warner Music Live and management company Umbrella Artists Productions, which it owns with promoter FKP Scorpio.

Morgan Stanley, Credit Suisse and Goldman Sachs are managing the flotation.

WMG’s filing with the US Securities and Exchange Commissions (SEC) can be read here.

 


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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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Endeavor public offering plans stall

Endeavor Group Holdings, Inc., the parent company of powerhouse booking agency WME Entertainment, has postponed its initial public offering (IPO), which was due to take place later this year.

IQ understands from a well-placed source that the IPO struggled to attract sufficient investor attention.

The company was due to start trading on the New York Stock Exchange as early as today, under the symbol EDR. Endeavor had originally planned to go public in May, before pushing it back to after the summer.

“Endeavor will continue to evaluate the timing for the proposed offering as market conditions develop,” reads a statement released by the company.

In a regulatory filing posted on Thursday morning with the United States Securities and Exchange Commission (SEC), the company proposed the sale of 17 million shares at a maximum share offering of $27, totalling a proposed maximum offering price of almost $466m.

“Endeavor will continue to evaluate the timing for the proposed offering as market conditions develop”

The valuation constitutes a significant decrease from that posted a week earlier. According to last week’s filing, the agency giant believed it could have raised as much as $712 million with its flotation, selling just over 22m shares at $27 a pop.

The IPO would have made Endeavor the first major Hollywood agency to trade publicly, with Creative Artists Agency (CAA), United Talent Agency (UTA) and International Creative Management (ICM Partners) and Paradigm all operating as private businesses.

The company would have joined stock market-listed live entertainment companies including Live Nation, CTS Eventim, Deutsche Entertainment AG, Madison Square Garden Company, Eventbrite and T4T Entertainment, as well as eBay’s StubHub and Vivendi’s live businesses.

In addition to WME, whose music roster includes Red Hot Chili Peppers, Foo Fighters, Bruno Mars, Solange, Vince Staples and Macklemore, IMG and UFC, Endeavor’s business comprises production arm Endeavor Content, the Miss Universe pageant, comedy management company Dixon Talent and ad agency Droga5, among others.

IQ has contacted WME for comment.

 


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Endeavor could raise $700m+ with 2019 IPO

WME Entertainment owner Endeavor could raise as much as US$712 million with its flotation later this year, according to the company’s latest filing with the US Security and Exchange Commission (SEC).

An amendment yesterday to Endeavor’s ‘form S-1’ –the document filed by American companies ahead of an initial public offering (IPO) – reveals the agency giant believes the value of its first 22m shares of class-A common stock could exceed $700m when they begin trading in late 2019.

Endeavor Group Holdings, Inc., the parent company of WME, sports agency IMG and martial-arts promoter Ultimate Fighting Championship (UFC), among other businesses, formally declared its intention to go public in May, with an initial valuation of $100 million ($100m is typically used in US as a placeholder before revealing the final figure).

Endeavor files $100m public offering

TheWrap reports that Endeavor reached its estimate by multiplying 22m registered shares by $32 apiece, which is the high end of what it expects to sell its stock for (the low end is $30). “Likely, however, Endeavor will only release 19-million-plus shares at the time of its initial public offering, an individual with knowledge of the plan tells TheWrap,” according to the site. “At $30 per share, that would raise just under $581 million. At $32, that figure jumps to more than $619 million.”

The IPO was originally planned for this summer, according to TheWrap, but was delayed while Endeavor acquires corporate hospitality company On Location Experiences.

 


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