What Does Endeavor Own?
What Does Endeavor Own?
How a New York talent agency founded in 1895 turned into a global media, entertainment, and sports conglomerate.
Highly regarded as the “first great talent agency in show business”, the William Morris Agency (WMA) represented some of the largest stars from the silent film era well into the mid-20th century. You might recognize names like Charlie Chaplin, Marilyn Monroe, and Elvis Presley.
Over the course of 100 years, WMA systematically climbed and purchased its way through the talent agency landscape, eventually becoming so widespread that the sun never set on a WMA office.
That all changed in 2009 when another up-and-coming agency, Endeavor, merged with the legacy talent giant to form William Morris Endeavor (WME). Two men–Ari Emanuel and Patrick Whitesell–paved the way for the acquisition that would change the talent agency market forever. A day after Christmas, at a time when unemployment was still recovering from the financial crisis of 2008, 150 people were immediately relieved of their duties. Emanuel and Whitesell took over as Co-CEOs; the changing of the guard was complete. The Endeavor we know today was conceived (but far from mature).
Expansion
Step one for growing Endeavor began in 2011 when the company helped form Raine. Raine Group was founded as a private equity fund focused on global media (we’ll spare the intricacies for this story, but much of the money derives from other sovereign wealth funds from the UAE and Singapore).
This was the first strategic partnership in a series of business development efforts aimed at allowing WME to gain access to private equity money. The big break came in 2012 when Silver Lake, one of the largest technology-focused PE firms in the world, purchased a 31.25% minority stake in WME for a quarter billion dollars ($250 million).
While it might seem like an insignificant development, this changed everything for WME. One year later, Silver Lake acquired IMG for $2 billion. Just like that, WME absorbed one of the largest sports management groups on the globe. The merger enabled WME to purchase all kinds of sports entities, including but not limited to, Professional Bull Riders (2015), ELeague (professional e-sports league, also 2015), and of course, the UFC (2016).
As for the UFC we know today, none of it happens without the WME-IMG merger. At $4.05 billion, the UFC sale was the largest sports acquisition ever. It’s the reason why we’re writing about this at all.
WME acquired other non-sports entities during this period of expansion as well. In particular, it purchased the Miss Universe Pagent from non-other than Donald J. Trump. After a massive investment round in early 2016 led by Fidelity, the company formed a Chinese subsidiary with the help of Tencent and Sequoia Capital (two of the most prolific firms globally).
Now that WME controlled the physical organizations, the next step in growth was aimed at controlling the media. In other words, they took control of the supply, now it was time to control the demand.
Introducing: Endeavor
In October 2017, WME-IMG reorganized into Endeavor. Emanuel maintained his standing as CEO while Whitesell became executive chairman.
At this point in the meteoric rise (2010-2017), Endeavor owns:
The UFC
Miss Universe Pagent
IMG and its subsidiaries (IMG Academy, IMG modeling agency, etc.)
ELeague (professional esports league)
Professional Bull Riding
Droga5 Creative Agency
Endeavor’s extensive portfolio placed the company at the forefront of highly engaging content opportunities with a huge potential target audience. It was time to try and control the distribution channel.
Shortly after the rebrand, the film financing and scripted TV sales units of the WME and IMG were combined to form Endeavor Content in the fall of 2017.
The two major investments and acquisitions that created Endeavor’s content division included Frieze and Bloom (majority stake). The names mean less than the strategy–the point is Endeavor moved quickly to establish itself in the media arena. However, this was not met without resistance.
In 2019, the Writers Guild of America (WGA) sued the four major Hollywood talent agencies, including Endeavor, Creative Artists Agency (CAA), United Talent Agency (UTA), and ICM Partners, over their use of packaging deals. Packaging deals are when a talent agency offers a production using its represented writers, directors, and/or actors as a "package" to prospective studios.
It took a while, but WGA prevailed, and Endeavor entered into a new franchising agreement in February 2021 with the WGA. It required Endeavor to stop using packaging deals and hold no more than a 20% stake in production companies connected to the agency, resulting in the sale of at least 80% of Endeavor Content. After an acquisition by CJ ENM the entire business arm was rebranded as Fifth Season.
Since 2019, three other divisions were sold alongside Endeavor Content, most notably, the Miss Universe Pagent, which was sold to JKN Global for $14 million in October 2022. Droga5, a 500-person creative agency in which Endeavor obtained a 49% stake back in 2013, sold to Accenture for $233 million as a part of Endeavor’s IPO in 2019. Finally, Diamond Baseball Holdings (see below) was sold to Silver Lake in August 2022. Silver Lake then obtained a 69% majority voting stake in Endeavor. It was recently announced that Diamond Baseball Group is on the brink of bankruptcy.
What Endeavor owns today
Here’s the master list of Endeavor’s current portfolio (I didn’t touch on all of these because I mainly wanted to focus on how they got to where they are).
Owned Sports Properties
Diamond Baseball Holdings, owns nine Minor League Baseball teams as of December 2021 and was sold back to Silver Lake in August 2022.
UFC
Professional Bull Riders
Euroleague Basketball (I know, right?)
ELeague, an eSports joint venture with Turner Broadcasting
Talent Agencies
WME (original WME talent agency)
IMG
Learfield, an intercollegiate sports marketing company
IMG Academy, a preparatory boarding school and sports training destination
A crash course in business growth
What we’ve learned here today is how businesses can acquire their way through the growth phase and beyond. Certainly, Endeavor performed well enough to achieve success in purchasing these businesses. But they also needed to know which business to absorb in order to establish themselves as a multinational conglomerate. And not to mention they did so relatively quietly. For example, did you know Elon Musk was a board member until March 2022? Endeavor’s relevance to fight fans is due to their ownership of the UFC, but know that the business touches plenty more, and will continue to grow so long as it can gobble up more companies.
See Endeavor’s history here.