Ari Emanuel's dream is to make Endeavor — already a powerful agency with a client roster that includes Trump, Martin Scorsese & Oprah — into a global entertainment juggernaut. After yanking the IPO, what's next for Endeavor?
For months, Endeavor CEO Ari Emanuel had been carefully choreographing his Wall Street entrance.
Endeavor reduced the number of shares on offer and lowered its estimated share price about 15%, to between $26 and $27, down from $30 to $32.And the triumphant mood inside the company turned somber as the partners watched the highly touted IPO for the interactive-fitness company Peloton bomb, with shares sliding 11% below their initial price of $29. “If Peloton was a success, it would have been a good indicator,” explained someone close to Emanuel. “But it flopped.
What was most striking about the move — and most surprising to Ari-watchers, some of whom enjoyed a bit of fun at his expense — was its caution. Emanuel is not usually one to swerve first. Endeavor set up shop over a burger restaurant in Beverly Hills. It had no clients. The four partners put up their homes for collateral to secure a $500,000 line of bank credit. But the move transformed Emanuel from just another combative talent agent into a hardball Hollywood player.
The film had already had a rocky road to release. Mel Gibson’s Icon Productions was originally slated to back the film, but after Moore gave an anti-Bush speech when he won an Oscar for “Bowling for Columbine,” the company pulled out. “Icon decided they didn’t want anything to do with me,” said Moore, who calls Emanuel “my kingslayer.”
Sandra Epstein, the agency’s first female agent, sued Endeavor in 2002 for wrongful termination. In her court filings, she alleged that sexual harassment was rampant at the firm, listing pot smoking and hazing during off-sites as part of a litany of off-color behavior. Endeavor has previously disputed the claims. The case was settled for $2.25 million, Epstein said.
One former network executive confirmed Emanuel’s reputation for incessant phone calls, aggressive tactics and yelling, but says, “He was the guy you wanted on your team. He was as fair as he was tough.”Emanuel is now a vegan father of four who meditates and whose conversation is liberally laced with references to his shrink, but that hasn’t made him any less of a dynamo at work.
The tight-knit partners set out to build a “media-platform company” unlike any other. In 2009, Endeavor acquired the William Morris Agency and quickly ousted its top management. Rebranded as WME, their company, already dominant in television, became a significant player in books, music and movies. The thinking was that these investments would provide new platforms for its growing talent roster and, more important, vital new revenue streams at a time of rapid change. Talent agencies have looked to diversify in recent years as agency commissions have been eroded by the dwindling number of big star-driven movies and the decline of TV syndication revenues with the rise of streaming.
Ari Emanuel and Michael Moore at the L.A. premiere of Moore's film"Capitalism: A Love Story" in 2009. Emanuel in 2004 fought to get Moore's"Fahrenheit 9/11" distributed.Whether Endeavor will ever make money for public shareholders remains to be seen. The failed IPO narrows Endeavor’s options, but doesn’t doom the company, analysts said.
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