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Endeavor President Mark Shapiro Doesn’t Want to Obsess Over Stock Price: ‘This Is a Long Game’
Endeavor President Mark Shapiro doesn’t want to be watching his newly public company’s stock price every second. But after the first day of trading for the Hollywood talent agency and entertainment company that owns the Ultimate Fighting Championship, we’re pretty sure he took a peek or two.
And the early result is not bad. Shares of Endeavor (which is under the ticker EDR) ended the day trading at $25.50 a share, right around the $24 that the company had priced them at before the market opened on Thursday. The company was looking to raise around $511 million, selling 21.3 million shares at a $10 billion valuation.
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“Don’t get me wrong, it’s an exciting moment and an exciting day. It’s a turn the page kind of day. It’s an animating new chapter and a bright future ahead. For this story, it’s not about one day or this week or two weeks,” Shapiro told TheWrap. “This is a long game. And we’re very much focused on that.”
After a long wait (and one scuttled IPO attempt in 2019), Endeavor finally became the first Hollywood talent agency to become a public company, when top executives Ari Emanuel, Patrick Whitesell and Mark Shapiro rang the bell at the New York Stock Exchange. The ceremonial move marked the end of a long road for Emanuel from his days in the CAA mailroom back in 1995.
It also wipes the stain of the company’s first attempt at an IPO, which was pulled one day before it was set to being trading in November 2019.
TheWrap spoke with Shapiro shortly after trading began on Thursday where he spoke about how Endeavor can be like Amazon and what Elon Musk brings to the table. The conversation has been edited and condensed for clarity:
This has been a long time coming. Now that you’re here, how have the first few hours as a public company felt?
Don’t get me wrong, it’s an exciting moment and an exciting day. It’s a turn-the-page kind of day. It’s an animating new chapter and a bright future ahead. For this story, it’s not about one day or this week or two weeks — stock goes up, stock goes down. Facebook, Snapchat come out and they crater, only these incredible stories that they are today. On the flip side, you have other companies that come out booming out of the gate and everyone’s patting them on the back and then all of a sudden they miss a quarter and then they’re dog meat. So this is a long game. And we’re very much focused on that. And we had, I think we have our employees pretty focused on that. Even over the next couple months, don’t get too high on the high, don’t get too low on the low stock price. Move into the long game. Let’s see where we are in a couple of years from now. So we’re trying to be pretty thoughtful and mature about it.
Take me through the thought process from going from 2019, when you pulled the first IPO, to now. When did you decide that April 2021 was the right time to try again?
I’ll say I think that we know how to make the right deals and identify the right trends. And we realized that we are uniquely positioned to thrive coming out of this pandemic. And the IPO and the proceeds that directly come from that helps support our business strategy. I mean, we get full ownership of the UFC, we strengthen our balance sheet, and it gives us flexibility to seize new growth opportunities, and pay down debt. So in that respect, it kind of touches all bases. And as soon as we got feedback from the market, that they saw us as the premier reopening trade, we took the opportunity to seize on the window.
Was there any trepidation to do this now, coming off a year that was tough on a lot of companies, particularly Endeavor (which reported $1.2 billion in losses over the last two years)?
Think about our businesses, right? Other than content, which obviously was strong during this period (just look at all the streaming platforms), but the in-person experiences concerts, Broadway, ticketing to sports events, people locked up in their houses. We suffered, but we persevered. Now on the flip side, come on, you’re not going to get a stronger trade than Endeavor.
The market is comfortable with the level of our debt. Having said that, one of our biggest priorities is to pay down that debt coming out of this transaction, so that we can have an even better enhanced profile.
We’re not profitable yet. But guess what? That’s to come. We’re a growth story. We’re about reinvesting. That [growth] will be there. How many years did we hear about Amazon being so big and having so much skill and having so many customers, but they’re not profitable? You know, what’s going on? What’s Bezos doing? Look at them now.
The conventional theory within the industry has been that Endeavor needs this IPO to survive. Do you agree with that?
Listen, let the haters hate. The IPO, any way you look at it, was a gargantuan success. That’s yesterday’s news. We’re four hours after the markets open. We’re about the future. We’re about growth. We’re about telling our story and overdelivering on it. That’s what we’re focused on. There’s a long line of investors that will get behind Ari Emanuel. He’s a great steward of capital, he has embraced an amazing collection of assets. So he’s been down before and he always gets up, and he wins. And that’s why so many different investors are sticking with us and getting behind us.
You added Elon Musk to your board. What does he bring to the table? What was the thought process to bringing him in?
You match him with Ari Emanuel and their vision and their ability to execute, and their ability to imagine? There’s no telling the heights or growth we can attain. And that was what the thinking was. Who’s out there that’s strategic? Who’s out there understands building brands? Who’s out there that’s a true entrepreneur, a calculated risk taker, and at the same time, has a tremendous record of success. And Elon was first to mind. The problem is we didn’t think he’d do this. He doesn’t sit on other boards, but he believes in our story, and personally he believes in Ari Emanuel.
Is part of the idea that Elon can help you guys tap into the “Robinhood” investor crowd?
Oh, yeah, definitely. He hasn’t done that yet, that’s a great point. He will do that. When it comes to introducing us to new relationships, there’s nobody better than Elon, from technology to sports, to space (laughs), he’s well-connected.