Endeavor: Reports of our demise are greatly exaggerated

May 13, 2020, 3:28 PM UTC

For months, rumors have swirled in Hollywood circles that Endeavor Group Holdings, the Beverly Hills talent agency led by Ari Emanuel, was in danger of disintegrating.

Those rumors couldn’t be further from the truth, its executives say.

“We’re not hiding from the fact that we are making cost cuts,” president Mark Shapiro told the Los Angeles Times on Monday, adding that reports about the company’s demise were a “fiction.”

Founded in 1995, Endeavor—formerly named William Morris Endeavor after it acquired the famous William Morris Agency last year— has recently been on a tear to transform itself into an entertainment, media, and sports powerhouse.

With financial backing from private equity firm Silver Lake Partners (and to a smaller degree Softbank), it has plowed money into an array of different companies—IMG Worldwide Holdings, Ultimate Fighting Championship, the Miss Universe pageant, streaming company NeuLion, hospitality and live events outfit On Location Experiences, Fortnite publisher Epic Games, and others—as it heightened its competition with rivals Creative Artists Agency, United Talent Agency, ICM Partners, and Paradigm Talent Agency.

Nearly all of this activity was intended to culminate in a since-abandoned initial public offering that was expected to raise upwards of $600 million, valuing Endeavor at $8 billion.

Then the novel coronavirus pandemic hit, sending the broader entertainment industry into disarray. Theaters were shuttered. Concerts were canceled. Sporting events were scrapped. Movie productions were mothballed.

Like its peers, Endeavor has engaged in cost-cutting maneuvers impacting hundreds of its workers and the salaries of its top executives. But the company’s expansion efforts—and its substantial debt—have led some to conclude that Endeavor was in a more precarious position.

Standard & Poor’s downgraded Endeavor’s credit rating to junk last month. Wrote the credit rating agency: “The burden on financial risk and liquidity elevates the risk that WME IMG’s capital structure could become unsustainable over time.”

Correction, May 13, 2020: Due to an editing error, an earlier version of this article mistakenly described the remarks of Endeavor’s executives, which accurately followed.

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