Judge Backs Bremen Senate's Proposal MotoGP Follows Trend Toward Pay-TV Bayern's Season-Ticket Holders Complain Executive Transactions Names In The News Barça Closes '13-14 With €530M Revenue No Drug Tests For CWG Medal Winners Essendon Caretaker Talks Media's Influence Ecclestone Offers $34M For Trial To End ISL Banking On Former European Players
SBD Global/January 3, 2014/FinancePrint All
Moments after William Morris Endeavor and financial backer Silver Lake announced a deal to acquire IMG, WME co-CEOs Ari Emanuel and Patrick Whitesell "addressed the combined troops," according to Sun & Masters of the HOLLYWOOD REPORTER. A person addressed about the situation said, "[Emanuel] was basically saying, 'We believe it's a great opportunity for our clients and our agency.'" But "is it?" Skeptics in Hollywood "believe WME and Silver Lake vastly overpaid" in their $2.35B bid for a company with $180M-a-year EBITDA (the next highest bid, from CVC Capital, came in at less than $2B, say sources). And some "predict a massive learning curve" for Emanuel, 52, and Whitesell, 48, as they "grapple with more than a dozen businesses in 30-plus countries -- primarily in a sports world largely unfamiliar to them." 21 Marketing co-CEO Rob Prazmark, whose company was once owned by IMG, said, "The life of a sports property goes on forever. Golf, tennis, the Olympics -- these are long-term plays. Will they be able to understand the different business models?" Further, a competitor predicted that Silver Lake, the private equity firm that owns a collective 51% stake in WME and IMG, "will pressure Emanuel and Whitesell to get the business in shape for a public offering during the next few years -- a daunting task." The rival said, "You'd have to grow the company very aggressively to set it up for an IPO. That's a very difficult thing to do in [a few] years while you're integrating these companies." Still, the IMG deal (if it closes in the spring as expected) "leapfrogs WME over longtime rival CAA in terms of size and scope." Among its many businesses, IMG is "the world's largest independent producer and distributor of sports programming, delivering more than 20,000 hours of content a year." It also "is the top-ranked sports licensing agency and represents TV rights for nearly 100 colleges and conferences." The allure of the "fast-growing sports business, at a challenging time for movies and television, is obvious." Octagon CEO Rick Dudley said, "Sports is live entertainment that people want to consume in real time. There's also certainty to it -- you have games every week, a season you can plan around." Longtime sports execs believe IMG's assets "could be a great enhancement to WME if managed correctly." Sports and entertainment marketing agency FocalSport Founder and President Mark Noonan said, "IMG has always been one of the great content creators and packagers in the sports business. You would think that would be a highly complementary business to what WME has been historically strong with" (HOLLYWOOD REPORTER, 1/2).
Serie A Inter Milan President Erick Thohir announced that "because of high player salaries, he will impose a maximum salary" of €2.5M ($3.4M), according to OLE. This "has caused concern in Milan." Thohir said that starting in June, "he will enforce this limit," which could "lead to the departure of some of the team's players." There are "various players making more than this, including Diego Milito," who currently makes double that maximum. Cuchu Cambiasso currently earns €4.5M ($6.2M). The "question is whether these players will be willing to take less money to remain with the club" (OLE, 1/2).