Endeavor Group Holdings — owner of WME, IMG and the holder of WWE and UFC operator TKO Group, among other things — may go private, its majority investor says.
Last week, CEO Ari Emanuel said Endeavor would undergo a “formal review” to “evaluate strategic alternatives,” though those alternatives, Emanuel insists, would not include a sale of TKO, which the company announced as part of the purchase of WWE, announced shortly after Wrestlemania in April; TKO went public in September.
“Given the continued dislocation between Endeavor’s public market value and the intrinsic value of Endeavor’s underlying assets, we believe an evaluation of strategic alternatives is a prudent approach to ensure we are maximizing value for our shareholders,” said Endeavor CEO Ari Emanuel in a statement.
Endeavor stock surged at the announcement. After trading at under $18 most of last week, its currently stabilized in the $22-$23 range; still, many analysts — including those in-house, apparently — believe it remains deeply undervalued, given the assets under its control.
After Emanuel’s statement, Silver Lake, the private equity firm that controls 71 percent of Endeavor, said it is considering taking Endeavor private.
“Silver Lake firmly believes in Endeavor’s business and is not interested in selling its shares in Endeavor to a third-party nor in entertaining bids for assets that are a part of Endeavor,” the company said, noting two of its executives are on Endeavor’s board.
With such substantial control, any move Endeavor wishes to make would have to meet with Silver Lake’s acquiescence.
WME drives revenue for the broader company, which also owners the Professional Bull Riding tour, the Miami Open tennis tournament, events company On Location, advertising agency 160 Over 90 and sports betting data service Open Bet.
Endeavor went public in April 2021 (a 2019 IPO stalled due to weak investor demand), valued at $10.3 billion. In September, Artémis, an investment company helmed by French billionaire François-Henri Pinault, purchased CAA for a reported $7 billion.
Speaking at Bloomberg’s Screentime conference earlier this month, Emanuel — who spoke on a wide range of topics including Endeavor’s bid for the PGA Tour, Israeli politics and CAA’s ties to Harvey Weinstein — alluded to what the Artémis takeover could mean for Endeavor.
“They got valued at 15 times [revenue] for the agency business,” he said. “I actually don’t expect it to be 15 times because that’s the private market. It shouldn’t be one and a half times. Give me six. I got kids to feed.”