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The firm that connects Elon Musk, Rihanna, mixed martial arts and three Reliance Jio investors

Endeavor, the Los Angeles-based entertainment behemoth, raised $511 million in a US IPO earlier this week valuing it at around $10 billion. The bold deal has raised hopes of revival in the sector battered by the global pandemic.

April 30, 2021 / 11:17 PM IST

Dwayne "The Rock" Johnson, left, with Endeavor's Ari Emanuel and Patrick Whitesell at November 2015 event in New York City. (Ilya S. Savenok)

“It’s TIMEEEEEEEEEEE!!!” Fans of combat sports would be familiar with this popular catchphrase of legendary Ultimate Fighting Championship (UFC) ring announcer Bruce Buffer.

In fact, this writer is one and wished Buffer, the ‘Voice of the Octagon’, was present when Endeavor finally walked into Wall Street.

Eighteen months after pulling the plug on its listing plans due to unfavourable market conditions, the entertainment powerhouse made its stock market debut earlier this week. Other than the mixed martial arts platform UFC, Endeavor is also home to the William Morris Talent Agency as well as sports and modelling agency IMG.

The Los Angeles-headquartered firm raised $511 million in a US initial public offering (IPO), valuing it at around $10 billion. The eagerly awaited offering has revived hopes in Hollywood of a revival in the entertainment, content and live events segments, which have been dealt vicious uppercuts by COVID-19.

In 2020, Endeavor clocked $3.5 billion in revenues and its losses stood at $625 million. Reducing the $5.9 billion debt burden is a high priority for the company.

Let’s take a look at some interesting facts about the firm,  its promoters, its investors and its deals.

The High-Profile Emanuel Siblings

The firm’s founder is Hollywood mogul Ari Emanuel, who loosely inspired the fictional character of Ari Gold in the hit HBO show 'Entourage.’  A New Yorker piece refers to Ari’s “Chicago–style aggression” and how “he craves the stature of a visionary, not of a mere corporate executive.”

His elder brother Ezekeil Emanuel is an advisor to US President Joe Biden and a medical ethicist (an individual who advises hospital administrations on policies). The third sibling Rahm Emanuel has been a White House chief of staff and mayor of Chicago.

A Celeb Client List  To Die For.

Endeavor’s client portfolio includes some of the biggest names in showbiz, entertainment and sports. It has represented Hollywood celebrities like Dwayne “The Rock” Johnson, Martin Scorsese, Charleze Theron, Matt Damon and Christian Bale, sports stars such as Novak Djokovic, Serena Williams, Maria Sharapova, Lebron James and Stephen Curry, talk show hosts like Oprah Winfrey and even musicians like Adele and Rihanna. It doesn’t get bigger than this folks.

The Elon Musk Factor

Tesla founder and the world’s richest man Elon Musk has been tapped by Endeavor to bolster its board of directors.

Founder Ari Emanuel and Musk have known each other for many years and Endeavor would be hoping that the social media savvy, billionaire tech entrepreneur’s cult-like status amongst retail investors would widen the appeal of the newly listed entertainment conglomerate.

And perhaps, its Twitter following too. It also wouldn’t hurt if its stock mirrored the incredible rally seen in the shares of Tesla over the last year.

The Reliance Jio Connection

US-based tech investor Silver Lake, which backs Twitter and AirBnb, is one of the early investors of Endeavor. The former shot into prominence after acquiring PC maker Dell Inc along with Micheal Dell in 2013. In 2011, Silver Lake sold Skype to Microsoft for $8.5 billion in one of the most successful private equity exits in history. Private equity firm KKR and Middle East fund Mubadla are also investors in Endeavor.

Ok, so what’s the link to Reliance Jio?

Well, interestingly, both firms have several common investors. Silver Lake, KKR and Mubadla participated in the 2020 fund-raising blitzkrieg by Jio, which raised a stunning $15 billion in 10 weeks by sealing 11 deals.

There was a sporty connection as well between the two groups.  Reliance Industries owns the glitzy franchisee-based soccer league Indian Super League, which was launched in 2014 along with Endeavor arm IMG. IMG exited the league in 2018 by selling its stake to Reliance.

The ‘Beautiful’ Deal With Donald Trump

Former US president Donald Trump was once a client of Endeavor. In 2015, the firm acquired Miss Universe Organization, which was solely owned by Trump and was responsible for producing Miss Universe, Miss USA and Miss Teen USA and related content. The deal valuations were not disclosed and Endeavor considered it a strategic fit to its portfolio.

Trump was a presidential candidate when the deal was struck. He had owned the pageant for nearly two decades during which he courted multiple controversies for his sexist remarks. For instance, in 2019, he infamously boasted to talk show host David Letterman about his approach to the pageants, saying, "I made the heels higher and the bathing suits smaller.”

A ‘Fight’ing Chance

Think UFC and think of Ireland’s larger than life “Notorious” Conor McGregor and his Proper 12 whiskey brand, Brazilian legend Anderson Silva, former ladies champion “Rowdy” Ronda Rousey, who switched to the WWE (World Wrestling Entertainment) and the humble Russian Khabib Nurmagomedov, who wrestled with bear cubs during his childhood. In 2016, in the most expensive transaction in sports history, UFC was sold to Endeavor for $4 billion.

The UFC showcases real combat competition, unlike the WWE, which follows a scripted format. The firm is one of the largest Pay-Per-View event providers in the world, and its content is broadcast in over 156 countries and territories to more than 1.1 billion television households worldwide. Ari Emanuel and team are betting big on the UFC as live audiences come back to arenas and online views of fights surge in markets like China.

 Endeavors Back Home

Some of the desi peers of Endeavor in the event and celebrity management segments include the likes of Wizcraft, Cineyug, Fountainhead, OML, Matrix, KWAN (now Collective Artist’s Network) and Bling. Additionally, the likes of Zee Live, which focus on onground experiences for audiences, have rolled out a countrywide theatre tour.

Experts tracking the domestic entertainment sector believe that the segment is disproportionately dominated by TV and cinema in terms of revenues. But as spending increases, these industry observers are confident that leisure expenditure in niche segments like live sports will grow at a rapid pace. Scalability may be a challenge and investors may play ball only if businesses reach the desired size, but the growth potential is high, they feel.

Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary

Ashwin Mohan
first published: Apr 30, 2021 10:52 pm