Liz Mullen of the Sports Business Journal reports that Endeavor has suspended equity buyback payments to agents and executives due to the economic uncertainty related to the coronavirus pandemic. The payments were set to be made April 5th.
Endeavor, the parent company of the UFC, is experiencing financial issues as an intended IPO set for this past fall was postponed. Now, it faces another crisis with many of its businesses in an uncertain holding pattern. Yet, the UFC cashed out many of its investors with a dividend in February.
But with the pandemic causing a stoppage to events around the world, liquidity is becoming a concern. Agents and executives are denied once again the opportunity to liquidate equity in the company.
According to Variety, Endeavor had long-term debt of $4.6 billion. S&P Global predicts Endeavor’s revenue from events could drop this year by “mid-teens” percentage and that its debt will reach a ratio of 7 times its earnings before EBITDA.
Payout Perspective:
The news is another blow for Endeavor which relies on live events and content to make its money. Endeavor is just one of several industry firms facing financial pressure because of its high debt load and the cancellation of most events worldwide suffocating its supply of revenue. Moody’s Investor Service highlighted this last week that sports-related shutdowns will eliminate high ad rates causing concern for the organization that may find it hard to find more loans to keep it going.
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