Endeavor has been weighed down by massive debt incurred from its $4B acquisition of the UFCGETTY IMAGES
Endeavor following its failed IPO late last year "now faces the scrutiny from having the coronavorus pandemic spotlight shown brightly in its direction," as the company is in "such a precarious state that it has raised questions about its ability to survive," according to Trey Williams of THE WRAP. When Endeavor "opened its books last year as part of its IPO, it revealed an astonishing" $4.6B in long-term debt and overall liabilities totaling $7.2B. Endeavor has been "weighed down by a massive amount of debt incurred mainly" from its $2.3B acquisition of IMG, and its $4B acquisition of the UFC. The coronavirus pandemic has "forced many businesses in and out of Hollywood to their knees -- none perhaps more impacted than the live events industry, which Endeavor has spent billions to enter." Endeavor's entertainment and sports segment earned $2.3B in revenue in '18, compared with the $1.3B in revenue from WME. That "does not include revenue it hoped to generate this year" from its '19 acquisition of the NFL-backed hospitality agency On Location Experiences in a $650M deal. Meanwhile, UFC has the "double-whammy of being the main driver of Endeavor’s live events business." One "bright spot is the revenue UFC attracts through media rights deals," as the UFC signed a $1.5B deal with ESPN in '18. However, media investment firm Gerber Kawasaki co-Founder & CEO Ross Gerber said that those rights "aren't enough to sustain the parent company" (THEWRAP.com, 4/14).
SPEAKING OUT: UFC President Dana White said, "Let’s not forget all the negativity about Endeavor when they bought UFC." He added, "Media said Endeavor overpaid; that I made so much money on the sale that I won’t care or be focused; that we can’t get a TV deal; etc. But the truth is since Endeavor acquired UFC, we’ve seen growth in every area. In 2019, we had the best year in the history of UFC. Sponsorship, Licensing, consumer products, and media revenues hit all-time highs. The ESPN deal doesn’t even happen without Endeavor." More White: "The whole business has been on a killer run since these guys got involved. Don’t ever bet against Endeavor" (VARIETY.com, 4/14).
