Talented agents and executives from entertainment conglomerate Endeavor make fun of their boss, Hollywood super agent Ari Emanuel, claiming they switched to the company’s IPO this spring while he was a bandit.
Some 300 top players from Endeavor, owner of the Ultimate Fighting Championship and Miss Universe Pageant, as well as powerful talent agencies WME and IMG, were named just before Endeavor’s initial public offering at the April that his stock options were worthless, sources told The Post.
The shocking news came in a conference call with company president Mark Shapiro, who told agents and executives that his Endeavor options were severely “submarine,” according to a source with direct knowledge of the call.
According to sources, Shapiro set aside the fact that employee options had been diluted well below the company’s stock price, not only because of the pandemic that attacked Endeavor’s business, but also because of a large number of stock awards that had been awarded to Emanuel, the fast-paced Hollywood business marker, with a cheeky style that inspired Ari Gold’s character on HBO’s “Entourage.”
Adding insult to outrage, Shapiro claimed that while Endeavor might have chosen to make employee options obsolete, he and the firm’s other top executives had devised a plan to make them whole, as they were “good.” , the source bitterly recalled.
Stunned employees were then given options on completely new stocks that they learned, through an online portal, with harder-to-get strike prices and longer purchase periods, sources said. In fact, some said the shares they had already acquired were replaced by uninvested options.
Endeavor declined to comment.
“No one is happy. There are a lot of complaints, ”an employee told The Post. “They reduced my wealth from what they told me when I got it, but it doesn’t look like Ari has been reduced.”
In addition to the convulsion, employees who raised a commotion left in better condition, sources said, pointing to an agent who allegedly boasted of having covered a one-time bonus of more than $ 200,000 after complaining to the direction of their new stock terms.
“Everything here is bespoke,” said a source, who added that the company’s culture is to reward people for “making noise”.
“Anyone who shouts louder and is more worried about leaving that day or that month will probably get something,” the source said.
The company behind the talent agency WME, which represents List A clients such as Christian Bale, Gal Gadot and Matt Damon, advanced with its IPO plans this year after a failed attempt. in 2019. The April release came despite the company having been weakened by the pandemic, which slowed Hollywood production and live events.
Emanuel and his partners, Patrick Whitesell and Shapiro, withdrew from the IPO by concluding a deal at the same time to buy 100 percent of the UFC joint martial arts company, of which Endeavor was already owner of half, and whose business grew through the pandemic. Endeavor sold 21 million shares to investors at $ 24 each on April 29, reaching $ 511 million.
Since its inception, Endeavor shares have been trading primarily at $ 25, with a high of $ 31.95 in May and a low of $ 23.17 in June. It closed at $ 24.99 on Friday.
According to a source close to the situation, Emanuel owns approximately 30 million shares of Endeavor, a cache worth $ 735 million at current market prices. The only barriers to the sale of Emanuel include a period of blocking the IPO that expires at the end of this year, as well as the granting of 4.1 million options on shares that it received during the year. approximate IPO, according to sources and regulatory files.
Only these 4.1 million options, scheduled for three tranches by the end of 2023, will make Emanuel eligible for a $ 100 million advantage if Endeavors ’shares remain in value until then. Meanwhile, about 80 percent of your total holdings do not have these restrictions, allowing you to enter when you like.
“Ari was basically made up by issuing a lot of UFC equity in the last twelve months, when no one else had a lot of stock and then those units became a lot of Endeavor equity,” a source said. . “No one’s portion of cake got bigger.”
While about 150 Endeavor executives who joined the company before 2014 appear to get bonuses in line with what was promised in dollars, some felt they were half of what they should have been given. ‘having given the company growth. Meanwhile, another 150 executives hired after 2014 saw their bonuses cut to a quarter of what they had promised,
“Shares have to go up long before we get what was agreed upon when I started the session,” a privileged person reported.
It is unusual for a company to go public with underwater stocks. But when it does, especially through a complex merger, it results in “complicated” calculations that can upset and confuse people, said James Reda, a compensation expert.
“What the company really needs to worry about is making sure everyone gets the same treatment” … and that “most important people” don’t “bend the rules” to benefit, he said.
The questions arose in 2017 when Emanuel and Whitesell sold $ 165 million in devolved shares and were rewarded with $ 100 million each in spare shares at the company’s expense, diluting other shareholders, according to the securities statements.
While Endeavor announced a restructuring in March 2020 that resulted in more than 1,000 layoffs during the pandemic, Emanuel said he would not charge any wages that year. However, it picked up a $ 1.2 million bonus during the first three months of the year and managed to get its total $ 5.8 million bonus so the Endeavor S-1 filing went call “their leadership and their contributions through the disruption of COVID-19.”
Whitesell got a $ 2 million bonus, while Shapiro got a $ 1.6 million bonus, CFO Jason Lublin got a $ 1.4 million bonus and legal director Seth Krauss earned $ 2.4 million.
By contrast, sources said most of Endeavor’s approximately 5,700 employees had no stock options, which exceeded layoffs, wages and pay cuts, and many of them worked overtime before leaving for The company’s purse received $ 500 Visa gift cards after launch.