Revenues at Endeavor Content Group increased substantially during the second quarter of 2019, a three-month period that also saw the entertainment company reduce its losses.
The company pulled back the curtain on its finances as it continues to prepare for an initial public offering, one that has been greeted with a healthy degree of skepticism from the financial community. Some analysts believe that Endeavor is too dependent on volatile businesses such as talent representation and is overly leveraged after embarking on an acquisitions binge that saw the company buy the UFC, as well as sports and modeling agency IMG. Endeavor maintains that it has grown far beyond its roots representing movie and television stars into a heavily diversified company involved in sports, fashion, and scripted entertainment.
Still, the most recent picture it presented in filings was rosier than the one it initially offered investors. Revenues grew 33% year-over-year from $780.7 million to $1.04 billion over the three-month period ending in June. Net losses dropped significantly, falling from $328.7 million in the year-ago period to $67.7 million. Adjusted EBITDA also increased, rising from $113 million to $165.7 million. Adjusted net income swung from a loss of $40.3 million to a gain of $47 million.
The improvement in revenues was partly attributed to the sale of sports media rights, specifically involving tennis and soccer. The reduction in losses was due to lower income taxes and lower costs related to its compensation packages for executives.
The company is carrying significant debt. It reports that it has longterm debt of $4.6 billion and liabilities of $7.2 billion. It reports cash-on-hand of $830.9 million. The debt decreased slightly and the cash-on-hand increased by $63 million in the time since Endeavor most recently shared financial data.
Endeavor was initially expected to have launched its public offering by late summer, but those plans were postponed in part because the company is finalizing its acquisition of On Location Experiences, a high-end events business. It also wanted to wait to test the markets until after its second quarter numbers were made available — numbers it hopes will make a case that it is a growing company, not a diminished old media player.
Endeavor is run by CEO Ari Emanuel (pictured) and Executive Chairman Patrick Whitesell.
Gene Maddaus contributed to this report.