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The company said it expected its shares to start at $ 26-27, down from $ 30-32 last week.
Endeavor Group lowered the estimated share price before its IPO.
In a new document filed Thursday with the Securities and Exchange Commission, the company announced plans to sell its shares between $ 26 and $ 27, against $ 30 to $ 32 last week.
As a result, the parent company of the WME talent agency and the Ultimate Fighting Championship will collect much less than the originally planned $ 600 million in a video presentation to the public at their Initial Public Offering. The company also reduces the number of shares offered to 15 million, against 19.4 million.
"Based on an initial initial offer price of $ 27.00 per share (the highest point in the range of estimated market prices shown on the front cover of this prospectus), We expect the net proceeds of this offering to be $ 361.6 million (or $ 419.3 million if the purchasers exercise their option to acquire additional shares in full), after deducting discounts and commissions. and estimated bid costs to be paid by us, "the document says.
The high-profile IPO marks a new era in Hollywood as it will force WME, the talent agency, to disclose financial details that tight-eyed agencies will keep secret.
In addition, if successful, the IPO of Endeavor could entice others, such as CAA and United Talent Agency, to do the same, although these companies are not yet as well. diversified that Endeavor, whose assets include Professional Bull Riders, Frieze Art Fair and the NeuLion streaming company and the marketing agency 160over90.
In the documents filed before the IPO by Endeavor, the group had a turnover of $ 2.05 billion for the first six months of 2019, with an operating profit of $ 10.3 million and a net loss of $ 223 million.
Despite the red ink, co-CEOs Ari Emanuel and Patrick Whitesell, as well as Endeavor CFO Jason Lublin, Mark Shapiro, Bozoma Saint John's marketing director, Kerry Chandler's human resources and others the 7,000 employees in more than 20 countries are expected to benefit. approximately $ 1 billion in equity through the IPO.
Banks Goldman Sachs, JP Morgan, Morgan Stanley and others are expected to reap profits, as Silver Lake, which became the first private equity firm to buy Endeavor in 2012 and acquired a significant stake, although still a minority since then. .
In a video directed to attract investors at the IPO roadshow, Emanuel boasts of Endeavor's diverse activities compared to other talent agencies. "You can be in the business of representing sports customers, but you will not work in production, licensing, sales." There are not enough elements of this type to be united in one element, "he says.
Despite the lower price of the stock, the IPO is a victory for Endeavor because it has been the subject of a long legal dispute between WME, CAA, UTA, ICM Partners and Paradigm and the Association of Talent Agents, versus 7,000 Writers have dropped their agents about the cost of packing, the practice of grouping elements of a television show in order to increase agency fees, while writers claim little benefit.
The WGA, through its media relations branch, had repeatedly tried to torpedo Endeavor's IPO until its members resolved the problem of packaging costs and multiple lawsuits. justice between writers and agencies. Once, the WGA told the SEC that Endeavor had inflated its number of customers, while she had previously stated "that it is impossible to reconcile the fundamental purpose of the company." an agency – serving the best interests of its clients – with the aim of maximizing returns for Wall Street. "
Some economists have however disagreed, saying that the transition from a private structure to a public structure has benefits for customers, employees and perhaps for the entertainment industry in general. "Management will be loyal to the company instead of holding private capital," said Eileen Appelbaum of the Policy and Policy Research Center in April. "With private equity, you may think that you are dealing with the management of the company, but there is someone behind the curtain pulling the strings."
In the video presentation of the IPO, Lublin said: "We will publicly be more agile and more responsive to our customers and … give us a capital and a motto for mergers and acquisitions, which have been and will continue to be at the heart of our strategy. "
Emanuel adds, "I do not believe that there is another platform like ours.I have competition in the areas of advertising, talent agencies and sport, but these are all individual companies … I am really far ahead of you for miles and miles. "
Wall Street investors will determine the accuracy of such sentiments when the stock begins trading on the NYSE soon under the symbol "EDR".
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