Endeavor Group Holding, the company that owns the WME talent agency and other sports properties led by CEO Ari Emanuel, has launched a review to examine strategic alternatives for the company that could mean a possible sale.
The news was announced on Wednesday alongside a statement from Emanuel.
“Given the ongoing discrepancy between Endeavor’s public market value and the intrinsic value of Endeavor’s underlying assets, we believe that evaluating strategic alternatives is a prudent approach to ensuring we maximize value for our shareholders,” Emanuel said.
While it is possible that Endeavor could potentially sell parts of the company or possibly the entire company, it was noted that there would be no consideration of selling majority ownership to TKO Group Holdings, the merged company that combines UFC and WWE.
After agreeing to a deal to acquire WWE, Endeavor announced plans to spin off the professional wrestling outfit along with the UFC into a new combined company called TKO Group Holdings. Endeavor retains a 51% controlling interest in TKO, which was valued at over $21 billion following the merger.
TKO started with stock prices worth more than $100, but is now at $78.64 per share.
Emanuel serves as CEO of both companies, with TKO considering several lucrative broadcast rights deals over the next two years that could increase the company’s value. The UFC has a broadcast rights deal with ESPN that also includes pay-per-view streaming rights. This partnership is scheduled to expire in 2025.
Negotiations for the UFC’s next broadcast rights deal are expected to begin sometime in 2024.
With TKO alone, the WME talent agency now generates the largest revenue for Endeavor, but the company also owns several other properties, including On Location, a live events and experiences agency, and betting technology company OpenBet, among other properties such as professional bull riders.
Endeavor previously sold IMG Academy – a sports training company – for $1.2 billion, so it’s possible the company will seek similar deals for other assets. Silver Lake — the private equity firm that owns a large portion of Endeavor — also floated the idea of taking the company private again after its IPO in 2021.
The move comes weeks after French billionaire Francois-Henry Pinault reportedly paid $7 billion for a majority stake in CAA (Creative Artists Agency), the main rival to Endeavor, a talent agency. Endeavor is currently worth $7.79 billion, although the company’s value fell 21 percent in 2023.
Endeavor saw its share price rise 11 percent in after-hours trading.
In its initial statement announcing the news, Endeavor noted that there is “no deadline or definitive timeline for completion of the strategic alternatives review process and there can be no guarantee that this process will produce a particular outcome.” which means there may be no sale in the end.