WGA Jumps On Report Of Imminent Wall Street IPO By WME Parent Endeavor

By Dade Hayes, David Robb

Endeavor Logo New

Talk about timing. WGA members are right now voting to authorize its WGA West board and WGA East council to implement a new agency code of conduct that includes banning packaging fees and severing agency ties to affiliated production entities. That vote closes Sunday morning. What a moment for a bombshell Wall Street Journal report that Endeavor, the parent company of Big Four agency WME, is preparing to file paperwork for an IPO that should hit Wall Street by year’s end. WME would not comment.

Not the WGA, which issued a statement ripping the Endeavor plan:

“Today’s announcement that Endeavor plans to become a publicly-traded company only strengthens the call for the conflicted and illegal practices of the major talent agencies to end,” the guild said. “It is impossible to reconcile the fundamental purpose of an agency—to serve the best interests of its clients—with the business of maximizing returns for Wall Street. Writers will not be leveraged by their own representatives into assets for investors.”

A big part of WGA saber rattling has focused on how much packaging — with writers providing the ground floor intellectual property — means to the financial value of the percenteries. WME owner Endeavor last year financed, sold and developed more than 100 film, TV and nonfiction projects, including Killing Eve and Book Club, and has been part of The Front Runner, Suspiria, Mid90s, Old Man and the Gun, Won’t You Be My Neighbor, and Monsters and Men. On the TV side, the deals include WGA East president Beau Willimon’s The First on Hulu, Damien Chazelle’s upcoming The Eddy, and Apple’s See and Truth Be Told (formerly known as Are You Sleeping),  the latter through its joint scripted television venture with Peter Chernin.

WME has its affiliated production relationship with Endeavor Content, CAA has its with Wipp, and UTA has its with Civic Center Media. The guild has been attempting to negotiate a new franchise agreement with the Association of Talent Agents, but no progress has been made on the key issues, with the April 6 deadline for a deal fast approaching.

A year ago, Endeavor was valued at around $4 billion. While it remains a heavyweight in talent representation, it has also expanded through its acquisition (with partners) of the UFC and also sports, fashion and events specialist IMG, making it potentially less vulnerable to the guild disputes.

Going public will mean greater access to capital via the markets, but also a higher degree of responsibility to shareholders. Ari Emanuel has been in corporate-CEO mode for a while now, speaking last fall at a Goldman Sachs conference in New York. He has been making the case for Endeavor as a larger business than the commission-based shop founded in 1995 by Emanuel and two of his ex-ICM colleagues.

More than anything inside Endeavor or the entertainment business, the go-go climate for IPOs cannot be discounted as a factor in the decision to go public.

Lyft’s shares closed at $78.29 today, their first day of trading, which represented a healthy premium over the public offering price of $72 a share. The ride-hailing firm’s market value of $26.4 billion made it one of the most valuable U.S. companies to go public in years. Uber could fly even higher, Wall Street analysts say, with Pinterest, Slack and delivery service Postmates also preparing for their own debuts.

This article was printed from https://deadline.com/2019/03/endeavor-plots-ipo-planning-to-ride-wall-street-wave-despite-guild-drama-1202585288/