Endeavor, the parent company of WME, IMG, and a majority stake in TKO Group, is considering the possibility of going private once again. The decision comes as executives at the sports and representation giant feel that the company is not receiving a fair valuation in the public market. Endeavor CEO Ari Emanuel stated that they will be evaluating strategic alternatives to ensure maximum value for shareholders.
In a formal announcement, Endeavor revealed that it has initiated a review process to explore various strategic options for the company. However, the company clarified that it is not considering selling its stake in TKO, which holds ownership of UFC and WWE.
Silver Lake, a major shareholder in Endeavor with 71 percent of the voting power, expressed its commitment to delivering value for all shareholders and stated that it is currently working on a proposal to take Endeavor private. The investment firm emphasized its belief in Endeavor’s business and its lack of interest in selling shares to third parties or entertaining bids for assets within Endeavor.
Endeavor executives, including Ari Emanuel, Patrick Whitesell, and Mark Shapiro, have been vocal about their dissatisfaction with the market valuation of the company. Comparing it to CAA’s majority stake sale at a $7 billion valuation and the lucrative sales of assets like IMG Academy and Endeavor Content, they believe that Endeavor is undervalued.
During a Bloomberg conference, Emanuel highlighted the disparity in valuations, stating that Endeavor’s various businesses were not receiving appropriate recognition. He expressed the desire for a valuation multiple of at least six times revenue, considering the company’s diverse portfolio, which includes WME, IMG, Open Bet, On Location, 160 Over 90, Professional Bull Riders, Frieze Art Fair, and the Miami Open tennis tournament.
While the specific trigger for the strategic review is unclear, Endeavor believes that selling parts of the company or exploring alternative options could unlock greater value for shareholders. The recent merger of its UFC business with WWE to form TKO Group Holdings, led by Emanuel and Shapiro, created value by separating the UFC business from Endeavor’s core operations.
Mark Shapiro, in an interview with THR following the TKO spinoff, expressed optimism that the review process would address the dislocation in the stock price and bridge the gap between the public market value and the true worth of Endeavor’s assets.
