No one will ever say that Ari Emanuel is not playing rough, but a new lawsuit filed today accuses the Endeavor boss of having a lot of sticky fingers in his well-compensated desire to make his 2019 IPO dream a reality in 2021.
Seeking a trial with a jury for breach of indirect contract and unjust enrichment, consultant David Carde claims that Emanuel and Endeavor secretly used “11-page extremely detailed analysis”, which was coldly emailed for a “detailed roadmap on how Endeavor can and should communicate its business value to the market. “
In a very detailed, illustrated and often dramatic lawsuit filed today in the Los Angeles Supreme Court by Early Sullivan Wright Gier & McRae LLP’s lawyers, Carde puts forward terms such as “theft of … intellectual property” quite generously (read here) .
“The circumstances surrounding the delivery of the Endeavor analysis have created an implicit agreement that Mr Carde will be paid if Endeavor uses it,” the lawsuit said in early October 2019, unsolicited and unanswered by an email from attorney Michael Giordano. to Emanuel, and later WME President Ari Greenberg (whom Carde claims to have known through charity work). In breach of this implied contract, Endeavor then proceeded to steal the plaintiff’s ideas and intellectual property – without the necessary compensation – and used them in its communications with the market for the second IPO, which convinced the market that Endeavor was a company worth more than $ 10 billion, “the document added.
“Mr Carde is entitled to compensation for the unjust enrichment of Endeavor in
an amount that must be proved in court, “the complaint said. By engaging in the misconduct alleged here, Endeavor is acting in such a corrupt manner, thus entitling the plaintiff to award criminal damages to set an example for the defendant and to punish Endeavor’s model of contempt and therefore to deter such misconduct in the future. “
Although the case against Endeavor Group Holdings, Inc. did not provide a dollar figure for these damages, it is quite clear that Carde is likely to seek a court solution or a settlement of hundreds of millions.
Endeavor did not respond to a request for comment from Deadline on the claim. If and when they do, we will update.
However, with the usual statement calling the case useless and promising to defend themselves in order to come, it is a fact that the 11th hour rejected by the first IPO in 2019 was an “inconvenience” for Endeavor, as is said in Carde’s lawsuit.
It is also an indisputable fact that the tension and stress of this facial device has been made even stronger by the devastation of the Covid-19 pandemic on the world, and in this case, entertainment, events and the media business. Whether Carde’s theories of “network effects” were enough to turn this ship around, if the material he claims was misappropriated for the second show for investors, Emanuel and Patrick Whitesel, continues, it seems to be a matter of to determine the courts.
“The introduction of Mr Carde’s analysis, including his thesis and purpose, is repealed as initial introductory remarks in the second IPO Roadshow Video by each of Endeavor’s 3 top executives, who reiterate Mr Carde’s thesis and purpose.” it is explicitly stated in the appeal.
Interestingly, Carde’s costume also explicitly acknowledges his own duty to George Gilder and Bharat Anand’s Conversation on Content – which could be a big part of the case if and as he moves forward.
Now, for you industry history students, Emanuel has long said that he was heavily influenced by his ambitions at the beginning of his career as an agent in Gilder’s 1990 book Life After Television. Accordingly, the economist at Harvard Business School Anand has openly been a paid consultant to Emanuel and Whitesel over the years.
All of this creates a very different timeline for where some of the notions of a “one-of-a-kind company” in Endeavor’s IPO 2.0 marketing material could have come from … but that’s for the court to understand.
As many know, Endeavor finally went public in April 2021, after taking advantage of the previous IPO plan in the last minutes of 2019. The climate was more unfavorable for the company before the previous experience, given its ownership on Endeavor Content and opposition from the Writers’ Guild and others in Hollywood for what many consider self-defense. Endeavor struck a deal with Korean CJ ENM late last year to sell a majority stake in the content. Along with other agencies, it also signed a franchise agreement with WGA, agreeing to impose a ceiling on its ownership of the production.
The deal with CJ raised its share price late last year, but has since fallen close to its original IPO price. Shares fell 7% today to just under $ 27.