Why did Endeavor postpone its trading
If you want to know what must have been going on in the offices of the artist agency Williams Morris Endeavor (WME) on Thursday, the compilation of the greatest moments by Ari Gold in the TV series "Entourage" is recommended. The character is quick-tempered, condescending, ruthless, rabid, malicious, disgruntled, abusive, sexist - or as they say in Hollywood: the perfect manager. He takes good care of his clients, but above all he makes them filthy rich. And he has a real role model: WME boss Ari Emanuel, 58.
The man is a legend in Hollywood, and he's gotten a bit more powerful in the past few years due to the shifting of the entertainment industry's tectonic plates. He puts creative people on the right platforms who are currently vying for film authors and showrunners like rarely before. David Benioff and D. B. Weiss (creators of the series "Game of Thrones") signed for a total of 250 million dollars on Netflix, "Modern Family" inventor Steve Levitan for 150 million dollars on 20th Century Fox TV. Phoebe Waller-Bridge, as the boss and leading actress of "Fleabag" one of the winners of the Emmy Awards, will receive more than 50 million dollars from Amazon Prime for three years.
It was initially said that WME's planned IPO on Friday - the first by a Hollywood agency - could raise more than $ 600 million and thus be valued at $ 8 billion. One day before the planned start, the IPO was canceled, one can imagine how Emanuel might now walk through the company headquarters on Rodeo Drive in Beverly Hills yelling at anyone who dares to breathe the same air.
"We will observe how the market develops, then we will find a time for the planned IPO," said a statement from the company. Just two weeks ago, the company wanted to issue more than 19 million shares at a price of more than $ 30, then it was said: 15 million shares at an issue price of $ 27. The $ 405 million would have been enough to service a September 11th loan. Now the cancellation came shortly before the start, which causes Hollywood to be upset.
It's less about the nervousness on Wall Street, which ensured that the IPO of the previously hyped fitness company Peloton was disastrous on Thursday; the share price has fallen more than eleven percent below the issue price of $ 29. The parent company of the office rental company We Work had also postponed its IPO a few weeks ago. WME is referring to this nervousness when it canceled, but in Hollywood they evaluate it a little differently, there are many unanswered questions about WME. "This is a heavy blow for Ari, it should damage his reputation," says investment banker Lloyd Greif: "I'm curious to see what will happen now and how the company wants to get fresh capital."
Costly acquisitions such as the fashion and sports agency IMG (2.4 billion dollars) and the martial arts association Ultimate Fighting Championship (four billion) have increased the debt to a total of 7.2 billion dollars, with a cash balance of only 830.9 million Dollar opposite. Emanuel turned WME into an egg-laying pig in the entertainment industry, but there has been a dispute between scriptwriters and their agencies for six months, at the center of which is also WME, which has been involved in productions through its subsidiary Endeavor Content since 2017. To put it very simply: WME is negotiating as an agent of an author with the possible client Endeavor Content - i.e. with itself. "That can't work," says a statement by the WGA authors' union, more than 1400 authors have separated from WME and WGA believes that an IPO before the dispute comes to an end is too risky: "The delay shows that potential investors do not currently think that WME should serve both business areas."
The authors are initially relieved that the IPO has been postponed. John August ("Big Fish", "Charlie's Angels"), because of the dispute, switched from the agency UTA - which also operates as a producer through a joint venture with Media Rights Capital - to Verve, which has already accepted the union's terms, says: "I cannot imagine that an agency can serve both artists and investors."
There's a scene in "Entourage" where Ari Gold walks through his agency and shoots everyone he tries to fire with a paintball gun. It is quite possible that Ari Emanuel did something like that on Thursday.
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