UFC, WME Parent Endeavor IPO: What Investors Need To Know

The parent company to UFC, Professional Bull Riding, Euroleague Basketball and other sports assets is going public this week.

About Endeavor Group: Endeavor Group Holdings EDR is planning to sell 21.3 million shares at a price point of $23 to $24.

Endeavor Group operates as a content, events, experiences and sports league company.

Endeavor owns the UFC, Professional Bull Riding and Euroleague Basketball brands among its sports segment. The company sells media rights on behalf of sporting organizations like the NFL, IOC, NHL, UFC and PBR.

Endeavor owns, operates and represents over 800 events annually. WME represents clients that perform over 37,000 concerts annually.

The company’s brand licensing business is one of the largest in the world representing over $16 billion in annual sales.

The company merged with the William Morris Agency in 2009, acquired IMG in 2014 and a controlling interest in UFC was purchased in 2016.

Tesla Inc TSLA CEO Elon Musk was named a member of the Board of Directors in February.

UFC Ownership: In February, Endeavor announced the acquisition of the remaining stake it did not own in the UFC taking its stake from 50.1% to 100%.

UFC has over 625 million fans around the world, according to the company. With over 10 million subscribers to UFC on YouTube, the league trails on the NBA for major sports leagues.

UFC’s Fight Pass subscription service saw year-over-year growth of 40% in 2020. The company also had its best year for pay-per-view buys in 2020.

Another item to watch for the growth of the UFC could be the launch of non-fungible tokens of fighters in the league. The company announced a deal with Dapper Labs, the company behind the hit NBA Top Shot.

The companies are working together on a “new digital experience that will provide UFC fans around the world with opportunities to purchase, trade and own UFC-branded digital collectibles on Dapper Labs’ Flow.”

Related Link: IPO Preview: Endeavor Group, FTC Solar And Several Medica Offerings Top The Week

Plans For Growth: Along with the growth of the UFC through its larger ownership percentage, Endeavor has several plans in place to grow as a public company. The company plans to expand its global presence, expand its experiential offerings, invest in adjacent segments and pursue strategic mergers and acquisitions.

Financials: Endeavor sports brands made up 20% of 2019 revenue. Endeavor’s events, experiences and rights business represented 43% of 2019 revenue. The company’s representation segment made up 36% of 2019 revenue.

Fiscal 2019 revenue was $4.57 billion. Revenue in fiscal 2020 fell to $3.48 billion with the COVID-19 pandemic shutting down many live events.