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With deal, focus turns to integration
Published January 6, 2014, Page 28
WME’s earnings before interest, taxes, depreciation and amortization (EBITDA) is $90 million, and it hopes efficiencies between its business and IMG, which has an EBITDA of $191 million, will allow it to boost the combined EBITDA from the two companies to more than $350 million.
“The challenge will be making it work financially,” said David Falk, a former chairman at SFX Sports Group. “Ari is as talented as anyone I know, so I am rooting for him.”
The company’s success will be contingent upon blending two distinct cultures and two very different companies.
IMG has more than 3,500 employees and 130 offices worldwide. Its primary offices are in New York, London, Cleveland and Florida, and its biggest businesses are IMG Media, IMG Sports & Entertainment and IMG College. Talent representation is no longer the focus of its business.
In contrast, WME is defined by its talent-representation business. The company, headquartered in Beverly Hills, Calif., with offices in New York, London and Nashville, represents some of the top names in film and television, including Robert Redford, Emma Stone, Christian Bale, Martin Scorsese, Aaron Sorkin and others. Its music group works with Tom Petty, Adele and Blake Shelton, and its literary clients include Malcolm Gladwell and Facebook’s Sheryl Sandberg.
“Integrating these two companies — if that is the plan — is difficult,” Octagon CEO Rick Dudley said. “Culture and business models in sports and entertainment are different. Not necessarily better, but different.”
Momentum CEO Chris Weil agreed, adding, “The sports culture is a little more relationship-based and not quite as cutthroat as the Hollywood culture.”
Staff writers Daniel Kaplan and Terry Lefton contributed to this report.