Endeavor IPO delayed until fall

August 2, 2019

The Wall Street Journal reports that Endeavor, the company which owns the UFC, is postponing its IPO until September as it awaits a deal to buy a premium-hospitality and live-events company in hopes of showing investors that it is diversifying its portfolio.

The news comes at a time when the market is hot and little volatility.  The concern, as always, is that headwinds are on the horizon and an imminent market downturn will happen soon.  But, no one knows this as a certainty.

The cause for the delay may be the company’s hope to puff out its fiscal muscle more for investors as it wants to show off its second-quarter results so that it can get a higher public valuation.  According to the WSJ, it is seeking a valuation between $7 billion to $8 billion and raise in excess of $500 million in its IPO.

Earlier this week it was revealed in a Securities and Exchange Commission filing that Endeavor’s CEO Ari Emmanuel received a pay bump and is set to score a financial windfall when the company comes to market.  Endeavor is the primary owner of the UFC with the dominant amount of voting stock of the company.

In an SEC Filing, it revealed that Emmanuel’s salary was raised from $1M to $4M with bonuses reaching near $6M.  Emmanuel could make equity awards near $12.5M if the UFC hits certain financial goals.  He could make $14M if the UFC goes public on its own and those targets are met.

The S-1 Filing by Endeavor markets itself as a global entertainment, sports and content company.  It acquired sports and modeling agency IMG in 2014 and Zuffa in 2014.

It’s S-1 includes Dwayne “The Rock” Johnson as a ‘Talent Case Study’ as to how Endeavor has helped the pro wrestler-turned actor-turned media mogul through different aspects of its divisions.  It lists the UFC as an ‘Owned Asset Case Study.’ The study states, “With more than 300 million fans, including over 80% of fans outside the U.S., and one of the youngest (e.g., 40% millennials in the United States) and most diverse demographics in all of sports, UFC continues to sell out some of the biggest and most prestigious arenas around the glove, while broadcasting over 160 territories to approximately 1 billion households.”

Payout Perspective:

The delay in going to market shouldn’t be seen as a weakness here as its clear that Endeavor wants to bolster its valuation through the acquisition of the New York-based On Location Experiences, LLC.  There has been speculation that the UFC would branch off of Endeavor and launch its own IPO in the future although that does not appear to be the case at this time.  Emmanuel’s salary and financial boon if things go as planned is not shocking although given the debate on fighter pay, the disparity between the CEO and a contracted fighter is one that is hard not to recognize.

Got something to say?

You must be logged in to post a comment.