Endeavor Group IPO: Everything you need to know about Endeavor

Endeavor Group, the owner of UFC and operator of events such as New York Fashion Week, has revived its plans to go public in 2021. We explain everything you need to know about the company and its IPO.

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When is the Endeavor Group IPO?

Endeavor Group originally planned to go public in 2019 but pulled out the day before it was due to list on the New York Stock Exchange after deciding market conditions were too hazardous for it to complete its IPO.

It has since revived its listing plans by filing a fresh registration document with the SEC on March 31, 2021, outlining its intention to list its Class A common stock on the New York Stock Exchange. However, the date of the actual IPO is not yet known.

Endeavor Group share price: how much is Endeavour worth?

Endeavor Group was initially aiming to raise around $400 million and earn a valuation of around $6.5 billion when it planned to go public in 2019. Notably, Endeavor wanted to raise closer to $700 million earlier in the year before scaling back its ambitions.

It is not clear what sort of valuation Endeavor would aim for now nor what sort of valuation it could earn, especially as its business has been hit by the pandemic.

How to trade Endeavor Group shares

You will able to trade Endeavor Group shares with City Index using spread-bets or CFDs once it has completed its IPO and its shares begin publicly trading.

Follow these easy steps to start trading Endeavor Group shares as soon as they go live:

  1. Open a City Index account, or log-in if you’re already a customer.
  2. Search for ‘Endeavor Group’ in our award-winning platform
  3. Choose your position and size, and your stop and limit levels
  4. Place the trade 

What is Endeavor Group?

Endeavor Group was founded in 1995 as a client representation business but has grown both organically and through mergers and acquisitions since then and built a sprawling empire of many businesses that can be separated into three separate divisions.

The first division is Sports. Endeavor Group is best known for owning UFC and revealed in its prospectus that some of the proceeds from the IPO will be used to raise its stake from 50.01% to 100%. It also owns PBR – the Professional Bull Riders – and has a joint venture working on Euroleague Basketball.

Importantly, Endeavor Group uses its own full-service content production service to distribute its sports content, and this is also used to finance, develop and sell sports programming for other major sports properties like the English Premier League and Wimbledon. Its studios are also used by other firms to produce other forms of content, including films like ‘La La Land’ and the production of ‘Hamilton’.

The second division is Events and Experiences. This is made up of several business that host thousands of events around the world. IMG Events hosts over 800 of them every year, ranging from sporting events like the Miami Open to fashion and cultural events like New York Fashion Week and the annual Winter Wonderland at Hyde Park in London. It also recently-acquired OnLocation, which runs over 900 experiences built around major annual events like the Super Bowl, Coachella and the Ryder Cup.

The unit also homes IMG Arena, which provides data insight into how audiences view sports online and bet on them. It also includes IMG Academy, a sports training camp that boasts a hugely successful track record of transforming youngsters into professional athletes, and Endeavor Streaming, which provides infrastructure needed for companies to stream their entertainment and sports content.

The third and final division is Representation, with the company representing major content creators, performers, influencers, athletes and models from around the world. For example, it owns WME, which specialises in representing music artists and saw its clients take home more Grammys than any other agency in 2019 or 2020.

The unit also hosts businesses that licenses out its own brands as well as third-parties ranging from the NFL and NHL to Fortnite and Lamborghini. It also sells the media rights to its own and third-party events.

How does Endeavor Group make money?

Endeavor Group has several revenue streams. Its Sports division generates income from fees paid for the rights to the likes of the UFC and other content, its events and experiences generate income from corporate clients, tuition from its academy and selling tickets to its hundreds of events, while its Representation unit receives client commissions and licensing income.

Based on its 2019 figures, before the pandemic hit, Events and Experiences accounted for 43% of revenue, Representation 36% and Sports contributed the remaining 20%. This has changed dramatically since the pandemic hit, having severely disrupted live sports and shut down events. In terms of geography, it makes two-thirds of its revenue from the Americas, 29% from Europe and the Middle East and just 4% in Asia.

Notably, Endeavor Group books a lot of recurring revenue and its top-line income offers a high degree of visibility and transparency thanks to the fact it has long-term licensing and media rights deals, repeating events, annual academy tuitions and steady income from representing clients. However, that has not proven entirely resilient during the pandemic.

Is Endeavor Group profitable?

In short, no. Endeavor Group has made a profit before but has remained loss-making during the past two years, with the pandemic having also derailed its top-line growth. Sports were halted, content production was disrupted, and events and experiences were shut down.

The UFC and PBR were among the first sports to return in the US after restarting in the first half of 2020, and the situation has improved for the overall business since last year. However, Endeavor Group has warned it expects any recovery to be ‘gradual’ and that future revenue and cashflows are hard to predict as a result.

Endeavor Group has never paid a dividend and will not make any form of payout anytime soon due to plans to reinvest any future earnings into the business.

Endeavor Group

2018

2019

2020

Revenue

$3.61 billion

$4.57 billion

$3.47 billion

Adjusted Ebitda

$551.1 million

$733.5 million

$583.6 million

Operating Profit

($107.4 million)

$210.5 million

($153.2 million)

Net profit

$231.3 million

($530.6 million)

($625.3 million)

What is Endeavor Group’s strategy?

The bulk of Endeavor Group’s business boils down to the growing demand for premium sports and entertainment content. The amount being paid for sporting rights around the world is continuing to steadily increase and surging demand for content in general bodes well for its Sports and Representation businesses. Its studios and partnerships with sports and media companies around the world places it at the centre of the industry’s growth.

Meanwhile, its Events and Experiences business is underpinned by the value placed on physical experiences over material goods by younger people. It is hoping its thousands of events can recover after being hit by the pandemic and hopes the recent acquisition of OnLocation can significantly expand its offering. IMG Academy also boasts a strong reputation with 90% of students going on to play collegiate sports compared to an average of 7% nationally.

Endeavor Group intends to continue expanding. The fact it sits as a central partner to many key industry players means it gets unrivalled insight that allows it to move early and act on emerging trends. This is what spurred it on to move into areas like streaming, podcasting and sports data. The company will keep its appetite for M&A going forward, having bought 20 businesses since 2014.

Endeavor Group board of directors

The current chief executive of Endeavor, Ariel Emanuel, was one of four of the original founders of the company. Below is a list of the rest of the board. Notably, Endeavor Group nominated Tesla founder Elon Musk as a director in early April 2021 to bolster its board ahead of its listing.

  • CEO – Ariel Emanuel
  • Exec Chairman – Patrick Whitesell
  • CFO – Jason Lublin
  • President -Mark Shapiro
  • Chief Legal Officer – Seth Krauss
  • Chief Human Resources Officer – Kerry Chandler
  • Chief Communications Officer – Christian Muirhead
  • Chairman of the board – Egon Durban
  • Directors – Stephen Evans
  • Director nominees – Elon Musk and Fawn Weaver.

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