For Brash Deal-Maker Ari Emanuel, IPO Collapse Is a Rare Stumble, And
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cc Monday, September 30, 2019 latimes.com/news Down, but don’t count him out Endeavor CEO Ari Emanuel’s plan to take his agency public collapsed last week, a rare stumble for the brash risk taker By STACY PERMAN TIMES STAFF WRITER For months, Endeavor CEO Ari Emanuel had been carefully chore- ographing his Wall Street en- trance. The highly anticipated initial public offering for Endeavor Group Holdings, planned for last Friday, would be the first of its kind in Hollywood and the culmi- nation of the uber-agent’s ambi- tious plan to build the media com- pany of the future. The offering was expected to raise as much as $600 million and value the firm at Ari Emanuel poses with sportscaster Jim Gray and Tony and Margaret McGregor, parents of UFC fighter Conor McGregor at the fighter’s bout $8 billion. against Floyd Mayweather Jr. in 2017 in Las Vegas. Emanuel’s company En- But those plans collapsed deavor owns UFC. (Ethan Miller / Getty Images) Thursday when Endeavor pulled the plug on the IPO, citing unsta- fashion, media, marketing, sports entertainment juggernaut. The IPO ble market conditions. and technology. was intended to help fuel its as- The move marked a rare and “This is a blow for Ari. It’s def- cent. The cash would have helped humbling stumble for Emanuel, initely damaged his reputation,” chip away at its $4.6-billion debt 58, a consummate deal maker and said Los Angeles investment bank- while funding future acquisitions. risk taker who had transformed er Lloyd Greif. “It will be interest- Now the firm is likely to face a Endeavor, the talent agency he’d ing to see what happens next.” host of financial pressures, and started in 1995 with no clients and Emanuel’s dream is to make Emanuel — a man who has fre- no money, into a Hollywood pow- Endeavor — already a powerful quently said that he doesn’t fear erhouse through a dizzying series agency with a client roster that has failure, but who, until last week, of acquisitions — first of the included President Trump and Mi- had never experienced a prominent famed William Morris Agency chael Moore, Martin Scorsese and one — will have to navigate the and then of other key players in Oprah Winfrey — into a global challenges to come. On Thursday, most of Endeav- In the meantime, however, ac- at ICM at the time, Emanuel or’s management team was in New cess to capital will become more bounded into colleague Rick York in anticipation of what was difficult. The company may have Rosen’s office with an entreaty: to be a celebratory moment — Fri- to spin off some of its assets. It Let’s get out of here and do this on day’s IPO. Things began to wob- must fend off the Writers’ Guild’s our own. Rosen, who ran ICM’s ble early in the day. objections to packaging and affili- television department, didn’t share Endeavor reduced the number ate production, two lucrative busi- Emanuel’s outlook or urgency. At of shares on offer and lowered its ness models for the company. En- the time, Rosen had a mortgage estimated share price about 15%, deavor’s top executives and star and kids in private school, while to between $26 and $27, down agents, who’ve been enticed with Emanuel was single, renting an from $30 to $32. promises of the payout an IPO apartment and always coming up And the triumphant mood in- could bring, could become poach- with an idea a minute. side the company turned somber as ing targets for rival firms. And the Then he got hit by a car. the partners watched the highly company will have to come up Leaving a lunch in Beverly touted IPO for the interactive- with a better way to sell investors Hills, Emanuel found himself face fitness company Peloton bomb, on what it was offering. down on Wilshire Boulevard with with shares sliding 11% below A producer and longtime friend broken ribs and a torn knee liga- their initial price of $29. “If Pelo- of Emanuel’s sent him a condo- ment. The injuries required multi- ton was a success, it would have lence text after hearing the news, ple surgeries and months of reha- been a good indicator,” explained calling it a kind of “shiva text.” bilitation. someone close to Emanuel. “But it “This is a tough town, everyone He realized he had no more flopped. It would have been worse always goes after perceived weak- time to waste. Endeavor was born if the stock opened at $25 and then ness.” at midnight on March 29, 1995, it dropped to $19.” What was most striking about when Emanuel and three of his Just after the close of the mar- the move — and most surprising to fellow ICM agents (Rosen, Tom ket on Thursday, Emanuel — Ari-watchers, some of whom en- Strickler and David Greenblatt) along with his Executive Chairman joyed a bit of fun at his expense — defected to form their own agency. Patrick Whitesell and Endeavor’s was its caution. Emanuel is not A security guard saw an assis- longtime financial backers, the pri- usually one to swerve first. tant nabbing files and soon ICM vate-equity giant Silver Lake Part- Emanuel built his reputation — Chairman Jeff Berg and President ners — withdrew the IPO. “It was and his business — by taking big Jim Wiatt discovered the papers of not a great feeling,” said one per- risks that panned out. As the Cin- all four agents were missing. Nan- son inside the company. derella story goes, he saw the fu- cy Josephson, who ran ICM’s tele- Silver Lake declined to com- ture in the early 1990s when he vision business, phoned Emanuel ment. devoured economist George Gil- asking if there was anything they This is a rocky moment for ini- der’s book “Life After Television.” could do to convince him to stay. tial public offerings, given the re- The book outlined a new para- After he said no, as has become cent underperformance of Peloton digm in which content and distri- Hollywood lore, Berg called and Uber, and the postponement bution were becoming commodi- screaming and threatening a law- last week of WeWork’s IPO as the ties; one in which power and mon- suit. Emanuel replied, “Listen, I coworking company’s CEO ey would revert to creators and don’t work for you. Do whatever stepped down. Endeavor could re- brands. the f— you want.” Then he hung turn to the market if conditions Emanuel saw opportunity in the up. Berg declined to comment; Jo- change. coming disruption. A senior agent excoriated the Bush family for its ties to Saudi royals. When Dis- ney’s then-Chief Executive Mi- chael Eisner tried to rescind the film’s deal with Miramax, a Dis- ney subsidiary, Emanuel went pub- lic, telling the New York Times that Disney was concerned the film could jeopardize the corporation’s tax breaks in Florida — where Disney operated its theme parks and Jeb Bush was governor. At the time, Disney executives denied the accusations. The film had already had a rocky road to release. Mel Gib- son’s Icon Productions was origi- Patrick Whitesell, left, is the executive chairman of Endeavor. He and Emanuel nally slated to back the film, but aggressively built the company into a powerhouse. (J. Vespa / WireImage) after Moore gave an anti-Bush speech when he won an Oscar for sephson joined Endeavor in 2006 now he was up at 3 a.m. working “Bowling for Columbine,” the as a partner. the phones. One of his first assis- company pulled out. “Icon decided Endeavor set up shop over a tants marveled at how he’d come they didn’t want anything to do burger restaurant in Beverly Hills. in with magazine pages ripped out with me,” said Moore, who calls It had no clients. The four partners full of circled photos of CEOs, Emanuel “my kingslayer.” put up their homes for collateral to screaming that he wanted each one Emanuel found a new distribu- secure a $500,000 line of bank on the phone. tor — fast. As Moore recounted: credit. But the move transformed “I’d say, ‘That person is not An emissary from Icon called Emanuel from just another com- going to call you back,’” the assis- Emanuel during Passover, telling bative talent agent into a hardball tant recalled. “He’d look at me and him they wanted out. Emanuel Hollywood player. say, ‘Did I ask your opinion?’ He said, “I’m in the middle of my Se- “Everyone assumed we were called them and would say, ‘I’m der,” but then turned around and going to fail,” said one of the Ari Emanuel. I started a new com- called Harvey Weinstein, head of agency’s first staffers. “It felt like pany and I’d love to meet you for Miramax, who was also in the us against the world.” lunch.’ I was shocked. Every sin- middle of his Seder. Emanuel said, Computers were perched on gle person he asked said ‘OK.’” “Look, you’ve got 30 seconds if cardboard boxes. There was a bas- In the early years at Endeavor, you want Moore’s next film about ketball hoop in the center of the Emanuel gained renown for going Bush and the war in Iraq.” He office. A single mailroom employ- toe-to-toe with the most powerful went on to explain that Weinstein ee delivered scripts because they people in town. In 2004 he fa- could take the “deal as is,” “same couldn’t afford a courier.