Writers Guild of America West has issued a statement on Endeavor Group postponing its initial public offering: 'Reports that the Endeavor IPO has been withdrawn show that investors didn’t buy the company’s conflicted business practices'
In a sign that Wall Street's appetite for investing in talent agencies and even diversified media holdings may be lower than some expected, Endeavor Group has postponed its initial public offering.
The reduced per-share price, coupled with a lower-than-expected number of shares that would be made available, would have meant the parent of talent agency WME and the Ultimate Fighting Championship could raise about $360 million from the IPO when it had previously forecast raising up to $600 million.
The agencies' battle with the WGA involves packaging fees, which agencies collect for attaching talent to a TV project, a practice writers argue boosts agency profits at their expense. Some Wall Street observers privately opined that Endeavor had been forging ahead with its IPO despite less-than-bullish sentiment in part to prove that WME’s business is not dependent on packaging fees and hasn’t been harmed much by the defection of most of its writing clients.
In an SEC filing, Endeavor acknowledged that, between lawsuits filed by the WGA and UFC fighters, plaintiffs may seek recovery of “very large or indeterminate amounts” of money and the outcome “may remain unknown for substantial periods of time.”
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