Silver Lake Looks to Privatize Hollywood Agency Titan Endeavor
The owner of WME and IMG said it was exploring options, but will keep its majority interest in TKO, the company that controls UFC and WWE
Private-equity giant Silver Lake said it is working on a proposal to take private Endeavor EDR -1.99%decrease; red down pointing triangle Group Holdings, the owner of talent agencies WME and IMG.
“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 firm wrote in a statement. Silver Lake owns about 71% of the voting stake in Endeavor.
The announcement from Silver Lake came after Endeavor on Wednesday said it was exploring strategic opportunities for the company that could include a sale of assets. Endeavor said it had no plans to sell its majority interest in TKO Group Holdings, which resulted from the merger of Endeavor’s Ultimate Fighting Championship with World Wrestling Entertainment. That venture was spun out into a separate company last month.
“We believe we are significantly undervalued, and we are exploring all options,” Endeavor Group Holdings President and Chief Operating Officer Mark Shapiro said in an interview.
Asked if the WME talent agency was likely to be sold or spun off, Shapiro said, “no one should assume anything.”
Endeavor’s shares rose 24% in after-hours trading.
Ari Emanuel, CEO of Endeavor, said in a statement, “We believe an evaluation of strategic alternatives is a prudent approach to ensure we are maximizing value for our shareholders.”
Besides TKO and WME, Endeavor also controls the sports and modeling agency IMG, which has partnerships with several major sports leagues as well as a significant events business.
In the years before it went public in 2021, Endeavor sought to expand beyond its representation business. The company acquired a number of companies including Ultimate Fighting Championship, the mixed martial arts league, and the Professional Bull Riders league.
Those acquisitions were driven in part out of concerns that the talent representation business was entertaining a phase of slower growth. Like all talent agencies, Endeavor’s WME has been hit hard by the strikes that have closed production in the entertainment industry for the past several months.
Endeavor also was forced to divest its content production business as part of a new agreement with the Writers Guild of America. Besides no longer being able to produce content, it also doesn’t receive so-called packaging fees for TV series and movies that include a significant number of WME clients. Packaging fees have been very lucrative for the talent agencies.
Along with CAA, WME has a formidable roster of top-tier actors and writers, including Dwayne Johnson, Ben Affleck, Tyler Perry, Oprah Winfrey, “Law & Order” creator Dick Wolf and the reality juggernaut Kardashian family. Endeavor in 2014 acquired IMG, which represents many fashion models and sports stars.
Last month, French billionaire Francois-Henri Pinault’s family investment company agreed to buy a majority stake in rival talent agency Creative Artists Agency from private-equity firm TPG. The deal valued CAA at an enterprise value of $7 billion including debt.
Earlier this year, Endeavor sold the for-profit boarding school IMG Academy that trains promising adolescent athletes to the private equity group BPEA EQT for an enterprise value of $1.25 billion, the company said.
Endeavor has seen its stock drop more than 35% since it went public. The company’s stock is down more than 16% so far this year.