The Beverly Hills-headquartered group is the owner of OpenBet and sports data and content provider IMG Arena. It also owns entertainment agencies WME and IMG.
Its $10bn (€9.5bn/£8.2bn) portfolio also includes TKO Group Holdings, which owns the World Wrestling Entertainment (WWE) and Ultimate Fighting Championship (UFC) brands.
In a statement issued on Wednesday (25 October), Endeavor said it has initiated a formal review to evaluate strategic alternatives for the business. Its share price rallied after majority investor Silver Lake subsequently announced it was interested in taking Endeavor private.
Maximising value for shareholders
While considering strategic alternatives, Endeavor stressed it will not consider the sale or disposition of its interest in TKO Group. Ariel Emanuel, Endeavor’s high-profile chief executive, explained that the review was necessary just over two years after it went public.
“Given the continued dislocation between Endeavor’s public market value and the intrinsic value of Endeavor’s underlying assets, we believe an evaluation of strategic alternatives is a prudent approach to ensure we are maximising value for our shareholders,” he said.
Responding to the announcement, Silver Lake – a $98bn private equity firm – said it is already working on a plan to take over the group.
“Silver Lake is committed to strategies that deliver value for all shareholders of Endeavor. To that end, Silver Lake is currently working toward making a proposal to take Endeavor private.
“Silver Lake firmly believes in Endeavor’s business and is not interested in selling its shares in Endeavor to a third-party nor in entertaining bids for assets that are a part of Endeavor.”
Endeavor was valued at $10.1bn when it sold shares worth $511m in an initial public offering (IPO) in April 2021. It was Endeavor’s second attempt at going public after weak demand led to it cancelling plans in 2019.
Silver Lake owns 71% of the voting power of Endeavor and its co-CEO Egon Durban and managing director Stephen Evans are members of the board’s executive committee.
Endeavor’s gamble on sports betting
OpenBet and IMG Arena comprise Endeavor’s Sports Data & Technology operating division. The group acquired OpenBet from Light & Wonder in a deal worth $800m in September 2022.
“The addition of OpenBet to our sports betting portfolio will enable us to further capitalise on the massive tailwinds in the fast-evolving sports betting ecosystem and lead the way in defining the future of sports betting entertainment,” Emanuel said at the time.
“In combination with our IMG Arena sports data and content business, we’ll look to create and unlock meaningful value for our rights holder and sportsbook customers, helping deliver the most compelling offerings for sports fans globally.”
In the most recent quarter, the Sports Data & Technology division generated $70.2m in revenue, which was up 116.3% year-on-year thanks to the addition of OpenBet. The segment’s adjusted EBITDA was $13.7m for the quarter, down 11.7%. It said the decline was due to certain costs at IMG Arena incurred in advance of the sales cycle.
OpenBet’s clients include DraftKings, FanDuel, SkyBet, Ladbrokes and William Hill. IMG Arena works with more than 470 leading sportsbook brands, leagues and federations worldwide.
Endeavor owns a 51% stake in TKO Group, which began trading on the New York Stock Exchange in September 2023.