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Executives at Endeavor Group Holdings have confirmed that talks are underway to sell a controlling stake in production company Endeavor Content.
“Although we are in the early stages, we have already received a lot of incoming interest,” CFO Jason Lublin said on the company’s second quarter earnings conference call with Wall Street analysts. “When we have more to share, we’ll let you know. “
Endeavor chairman Mark Shapiro added that the process officially started last week and admitted that leaders “don’t want to see it go away” given the momentum of the division. That said, a booming transaction market could result in a high purchase price, he argued.
The deadline in June signaled the parent company’s plans to purchase most of the Endeavor content. The operation is the oldest, largest and most established of the studios affiliated with the agency, especially in the area of television. In addition to film and television production and distribution, it has also branched out into audio. His list of movies and TV included Once upon a time … in Hollywood, see, The Revenant, The Night Manager, call me by your name and Kill Eve.
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Under an agreement made with the Writers Guild of America by Endeavor and other companies, the major agencies agreed to limit their abilities to package material. The Guilds had accused WME, CAA, and others of Endeavor of self-contracting, given their reach through production and talent. Endeavor plans to sell 80% of Endeavor Content projects that fall under the WGA deal and keep 20% of those projects.
While no one in Endeavor’s management team is ideally willing to part with the rapidly growing Endeavor Content business, it could secure attractive terms given the booming M&A market. Reese Witherspoon’s Hello Sunshine earlier this month was acquired for $ 900 million by private equity firm Blackstone and a new entity led by former Disney executives Tom Staggs and Kevin Mayer. LeBron James’ SpringHill Inc. has presented interests from Nike and other contenders for a valuation of $ 750 million.
“We are optimistic about the price we can order,” Shapiro said.
Endeavor’s business unit that includes Endeavor Content posted a 70% increase in revenues to $ 328.2 million in the second quarter. The parent company’s revenue of $ 1.1 billion slightly exceeded Wall Street forecast, but Endeavor raised its annual revenue and adjusted EBITDA targets.
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