Private equity giant Silver Lake has closed on its purchase of Endeavor Group Holdings, taking the sports and representation business private after nearly four years on the stock market.
Silver Lake, which already owned the majority of Endeavor, finalized the deal, announced nearly 12 months ago, with the participation of United Arab Emirates sovereign wealth fund Mubadala, billionaire Michael Dell’s DFO Management, private equity firm Lexington Partners, Goldman Sachs and other undisclosed banks that provided debt financing.
As part of the transaction the company announced new roles for some executives and a shifting of how it houses some business lines.
Ari Emanuel moves from being CEO of Endeavor to being executive chairman of WME Group. Endeavor also said WME, which had been mainly a talent representation business, will now also house IMG Licensing, the marketing agency 160over90 and the non-scripted content business Pantheon Media.
Mark Shapiro, who had been the president and chief operating officer of Endeavor, shifts to be the president and managing partner of WME Group. Emanuel and Shapiro’s titles haven’t changed with TKO Group, the publicly traded UFC, WWE and Professional Bull Riders parent, which is majority-owned by Silver Lake. Christian Muirhead and Richard Weitz continue as co-chairmen of the now-expanded WME Group.
Patrick Whitesell, who had been executive chairman of Endeavor, now shifts to be CEO and founder of a new business with Silver Lake to invest in properties in sports, media and entertainment, and intellectual property, according to a press release.
Separately, Whitesell will buy the WME Football business from Endeavor and will own that arm himself, apart from Endeavor and the Silver Lake joint venture. WME Football represents dozens of NFL players including Joe Burrow, Nick Bosa and Matt Milano, according to Sportrac. The move is notable because Whitesell is better known as the agent of much of Hollywood’s A-list, including Christian Bale, Idris Elba and Amy Schumer, according to published reports.
Emanuel, Whitesell and Shapiro are also equity owners of privately held Endeavor, having rolled over their shares in the business.
Bringing Endeavor private closes what was a largely disappointing foray into the public market. Endeavor initially filed for an IPO in 2019 but didn’t come to market until 2021 at a price of $24 a share. The $27.74 price per share the Silver Lake-led consortium paid for the portion of Endeavor it didn’t own is 16% greater than the IPO price, equating to an annualized return of 4%. By comparison, the S&P 500 returned 43% before dividends, or nearly 11% annually, over the same time period.
Leaving the public market doesn’t mean Silver Lake washes its hand of the stock market experiment, however. The company faces lawsuits from investors who feel the purchase price—just a 9% premium to the stock price when the take-private transaction was announced last year—isn’t fair value. Minority shareholders can’t be cashed out of a public company at an unfair price, as determined by the courts if objections are filed.
In Delaware, where Endeavor was incorporated, the objection is known as the right of appraisal. One estimate is that two-thirds of outside shares have been filed for the right of appraisal in Delaware courts. Silver Lake says the investors are largely hedge funds trying to abuse the system and is refusing to pay the takeover price until the courts resolve the objection. It’s believed upset shareholders are contending Endeavor’s majority interest in TKO Group wasn’t accounted for in the take-private offer.
