Endeavor Group Holdings has secured a $260 million term loan to sustain its financial flexibility amid recent cost-cutting measures taken during the coronavirus, an individual with knowledge of the situation told TheWrap.
The deal adds to an existing $2.8 billion term loan and carry an interest rate of just under 11%, according to the Wall Street Journal, which first reported the news. That funding injection — arranged by JPMorgan Chase, with Oaktree Capital Group LLC as the chief purchaser — should help the L.A.-based company that has been battered by the shutdown of film and TV production as well as live events.
Endeavor is the parent company of WME, the modeling agency IMG, Professional Bull Riders and has a majority stake in the Ultimate Fighting Championship, which resumed competition on Saturday after weeks of pandemic-induced idleness.
The company announced in April that it would be implementing furloughs, layoffs and pay cuts that would impact one third of the company’s 7,500 employees in more than 90 offices around the world. CEO Ari Emanuel and executive chairman Patrick Whitesell also announced they would be forgoing their salaries in 2020.
Last Thursday, WME announced it would begin layoffs and furloughs on Monday that will impact staff across all departments. Out of the agency’s 1,500 employees, approximately 300 people will be impacted, with a limited number of employees expected to be furloughed and placed on reduced work for reduced pay arrangements, an individual with knowledge told TheWrap. The cuts are primarily among executives (non-agents) and support staff, with the majority being in WME’s music department given its reliance on mass gatherings.
Endeavor has a mound of debt on its books, incurred mainly from its $2.3 billion acquisition of media, sports and fashion giant IMG, and its $4 billion acquisition of the Ultimate Fighting Championship. As of last September, when the company nixed a planned initial public offering, Endeavor reported having nearly $5 billion in debt.
Some onlookers within the industry anticipate the company may end up needing to file for Chapter 11 bankruptcy, but Endeavor has made no such proclamation.
In 2012, Endeavor, then called William Morris Endeavor Entertainment, sold a 31% minority stake to private equity firm Silver Lake Partners for $200 million. That investment helped propel the company’s growth, and should all else fail, the company may look to Silver Lake again for relief.
The Wall Street Journal first reported the news of the term loan.