Owners at Endeavor bail on initial public offering after pulling stock set for Friday release

[Hong Kong Phooey]

UFC parent company Endeavor will not be going public on Friday, Sept. 27 as initially scheduled.

The entertainment conglomerate headed up by Ari Emanuel and Patrick Whitesell had already dropped the price of their stocks for the initial public offering from $30 to $32 per share to $26 to $27 per share while also lowering the total number of shares that were going to be released.

Now, Endeavor has completely yanked their upcoming IPO from its scheduled release this week. The news was first reported by the Wall Street Journal.

“Endeavor will continue to evaluate the timing for the proposed offering as market conditions develop,” the company said in a statement released on Thursday.

The news comes on the heels of concerns from many Wall Street analysts who cast doubt on the long term viability of Endeavor, which seemed to scare off a lot of investors.

The UFC, which is the most profitable business currently operating under the Endeavor umbrella, still faces questions about a volatile revenue stream controlled by pay-per-view in a superstar-driven sport.

At least a portion of those concerns were quelled thanks to a seven-year deal inked with ESPN that will bring in hundreds of millions while also signing on with the Disney-owned company to handle the pay-per-view business for the UFC as well.

Still, the UFC also is embroiled in a lawsuit with several ex-fighters right now that could dramatically damage their brand and the financial bottom line depending on the verdict in the case.

Add to that, Endeavor is locked in an ongoing battle with the Writers Guild of America regarding packaging deals on television that left many writers in Hollywood with a bad taste in their mouths. That led to a split between many writers and the Hollywood agency and that fight is still happening in a series of lawsuits.

After purchasing the UFC for just over $4 billion in 2016, rumors started that Endeavor was already considering going public, but it took nearly three years for that move to finally come to fruition.

The plan for the IPO was to raise over $600 million, with the bulk of those funds going to pay down existing debts with the rest used as operating capital for the company. When the stock prices were changed along with the total number of shares being offered, Endeavor stood to bring in less than $400 million, which was a significant shift from the original expectations with the IPO.

Endeavor pulling the IPO seems to confirm the concerns over the stock were real and opening day trading could have hurt the company more than help it. As of now there’s no word when—or if—Endeavor will reschedule the IPO.

 

[so long]

whow!

 

[jimmy boogaloo]

Ari shat himself LOL

 

[kneeblock]

Glad to see labor making the difference.

 

[Rambo John J]

organized crime

 

[Haulport]

Fuck them all. Hollywood people are even more repugnant than the UFC brass. At least Little Swole was looking to sexually harass grown women who were his employees and not children.......

 

[Chromium]

Cut & pasted from the thread I made before I noticed this one (not a quote, just my own thoughts on it):

The big take aways from all this is that the UFC is the most profitable part of WME, their debt load is ridiculous and larger than thought, and they have a currently have a "B" credit rating from Standard & Poor's which is not good at all. While not toxic, it signals to investors and loaners that they're kind of a coin flip, and anything below a BBB is gonna be at least a bit problematic. So getting that upgraded by paying back loans with IPO money is a very high priority.

Also, apparently they barely own half of the UFC directly, I don't know how well known that was.

Here's how WME's situation affects the UFC: WME wants a lot of fucking money as quickly as possible, not just to get breaks on loan repayment (I thought this was really fucking stupid and short-sighted), but because their entire business may get seriously damaged if they don't. High-level talent agents could jump ship. High-level executives could jump ship if it gets bad enough.

So their stupid booking that paints divisions into corners and unnecessarily ruins older stars, and their double paywall bullshit because ESPN was willing to overpay in exchange for the UFC building up ESPN+ wasn't just because WME is shortsighted, it's because they're somewhat desperate. They make these trades in long-term viability and long-term growth for the sport because they are so focused on the present.

They are being used to build ESPN+ because it makes more money in the short term, while fucking themselves over in the long-term.

Hell, they may even do a short-term extension with Reebok simply for appearances to outside investors (which would have to be for an undisclosed pittance at this rate, since I doubt Reebok would agree to anything more). I really hope they're not this stupid but they've not given reason to think otherwise.

 

[Wild]

It’s going to be interesting to watch how the next apparel deal plays out...if there is one.

 

[ECC170]

Watch The Ferttitas buy it bk... Similar thing happened on a smaller thing happened on a smaller scale when ProElite bought KOTC and after it was all said and done Terry Trebilcock bought it back.

 

[Chromium]

It’s going to be interesting to watch how the next apparel deal plays out...if there is one.

The only people happy with the previous deal are the Fertitas. Reebok has stopped re-signing individual deals with people, and when I checked their Facebook a few months ago, had not promoted any UFC athlete there since the Mayweather/McGregor fight. It's also been a couple years since they updated what their gear looks like, despite promising regular changes after soliciting fighter feedback. There's no way they aren't regretting things.

Reebok is just running out the clock. I sincerely did not think they would re-up, and I doubt anyone would want to do a similar deal.

There's scenarios where I could see a new deal with someone happening, including Reebok, the most likely being if the IPO was delayed well into next year and the UFC wanted to appear "stable" to not spook any potential investors in the IPO. Then they could go to Reebok, and offer a 2-year extension in exchange for almost nothing. Like $5 million total, for two years, hypothetically (it would have to be enough so that if a number came out, the UFC could spin it as just a stopgap). I think Reebok might go along with a short-term, nearly free deal. By the time it showed up in a quarterly report the IPO would have passed and investors would care far more about overall profitability.

 

[Wild]

So who’s going to buying shares when this IPO launches?

 

[RaginCajun]

So who’s going to buying shares when this IPO launches?

Word on the street is that Disney is going to buy it. They will have the fighters dress like Disney owned characters. Just imagine Iron Man vs Mickey Mouse.

 

[Judobill]

So who’s going to buying shares when this IPO launches?

I learned my lesson with the IFL.

 

[Judobill]

Watch The Ferttitas buy it bk... Similar thing happened on a smaller thing happened on a smaller scale when ProElite bought KOTC and after it was all said and done Terry Trebilcock bought it back.

Bruce Wayne did the same thing in The Dark Knight.

 

[Wild]

I learned my lesson with the IFL.

Ewww, that one's gotta sting.