Endeavor Reaches $ 775 Million Deal with CJ for Majority Stake in Scripted Content Unit – Deadline
After a multi-month process, Endeavor Group Holding reached an agreement to sell most of its successful production facility to South Korean media giant CJ ENM.
CJ is investing $ 775 million for 80% of Endeavor Content’s scripted business, according to the official announcement, with equity valuation reaching $ 970 million.
Endeavor will retain 20% of the scripted portion of the business, in addition to retaining the unscripted portion as well as certain documentary and film sales and financing advisory services. Graham Taylor and Chris Rice of Endeavor Content will continue to lead the studio as co-CEOs. Both companies expect the deal to be reached in early 2022.
This acquisition is the largest M&A transaction for CJ ENM, which also invested in Skydance Media and, more than a quarter of a century ago, DreamWorks SKG.
CJ’s word approaching a deal first surfaced on Thursday afternoon. On Monday, in a conference call with Wall Street analysts, Endeavor executives said they had identified a “shortlist” of potential buyers. CJ, who supported and distributed the 2020 Oscars breakthrough Parasite, has increased its visibility in Hollywood and sees the Endeavor Accord as an important step on this path.
The divestiture was overdue for months and followed expressions of interest from many parties. Last February, Endeavor’s WME signed a franchise agreement with the Writers Guild of America. Guild members had argued that agencies with their own production companies and representing clients in such productions represented a conflict of interest. The franchise agreement limits agency ownership in affiliated production entities to 20% and also provides for an end to packaging costs in 2022.
âFour years ago, we set out to create a talent-driven studio that prioritized greater creative freedom and greater ownership,â Endeavor CEO Ari Emanuel said in the statement. official announcement. âGraham Taylor, Chris Rice and the entire Endeavor Content team have delivered on their promise, and this transaction further underscores the enduring value of talent and premium content. He added, âHaving known Miky Lee for over 25 years, I have no doubts that CJ ENM will be excellent stewards of the studio, accelerating and amplifying his projects on the world stage.
Emanuel’s ties to CJ Group vice president Miky Lee date back to 1995 when, as an agent, Emanuel helped negotiate the company’s $ 300 million investment in DreamWorks SKG, a deal led by Lee.
CJ ENM CEO Kang Ho-Sung said Endeavor Content is “Growing at a remarkable rate” in the United States and Europe. “We are convinced that this agreement will create a synergy between the two companies, recognized worldwide for their production. capabilities and list of affected IP properties, âhe said.
In the same way Parasite, winner of the Oscar for Best Picture in 2020, CJ ENM’s credits also include TV series Crash landing on you, Goblin: The Great and Alone God, Hospital Reading List, movie theater Snowdrops and Miss Granny and the Broadway K showink boots.
âWe are excited about this next chapter as we seek to unlock even more value for talent and our producer partners,â said Graham Taylor and Chris Rice, co-CEOs of Endeavor Content, in a joint statement. âWith the addition of CJ ENM, our mission to empower creators and foster an inclusive environment that promotes diverse content globally only grows stronger. “
Founded in 2017, Endeavor Content is the oldest, largest and most established of the agency-affiliated studios, especially in the television business. Led by Co-Chairs Taylor and Rice, it comprises several divisions, including film and television production and distribution. Its portfolio includes movies and TV series like Once upon a time … in Hollywood, see, The Revenant, The Night Manager, call me by your name and Kill Eve as well as the next Reminiscence and Blue miracle.
In a earnings call on Monday, after Endeavor reported strong third-quarter results, executives said they had made progress since receiving a second round of offers in October. While refusing to split Endeavor Content’s income, they claimed that the unscripted business, which will remain part of the business, is thriving.
Profit margins in the operating segment where Endeavor Content’s results were reported are expected to increase after the sale is finalized, CFO Jason Lublin said on the earnings call. âWe also believe that the representation segment should be simpler to assess without the challenges of determining the production and episodic delivery schedule in the segment,â he added.