Endeavor Secures $260M Loan As Extra Cushion During Pandemic Downturn

Endeavor, whose revenue has dropped 70% during the coronavirus pandemic, has secured a $260 million term loan as an extra cushion.

Sources familiar with the transaction tell Deadline it carries an interest rate of a bit less than 11%. The company had previously taken out a $2.8 billion loan.

Last month, Endeavor said one-third of its workforce of 7,500 would be affected by furloughs, layoffs or other staffing reductions. CEO Ari Emanuel and executive chairman Patrick Whitesell have agreed to forfeit their annual salaries. The company has been hamstrung by its reliance on live events — from sports to fashion to concerts — as well as the shutdown of film and TV production due to COVID-19.

The cuts are expected to help increase profits by as much as $200 million in 2020, sources said.

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Over the years, it has grown from its traditional talent representation business at WME to add major assets like a 51% stake in the Ultimate Fighting Championship, IMG and the Professional Bull Riders. It scuttled a planned IPO last year as market conditions grew choppy.

The Wall Street Journal was the first to report on the new loan.

The UFC and PBR have been among a small handful of sports organizations able to operate during a time of widespread lockdowns due to COVID-19. Major team sports remain in limbo, but as more parts of the world and the U.S. start to reopen, pro golf and other sports are looking to restart. The UFC held a pay-per-view event on ESPN on Saturday night, carrying on despite positive coronavirus tests for a fighter and two staffers.

Last week, Endeavor said it would sell its stake in Fortnite publisher Epic Games, netting it about $100 million.

Ratings agency S&P Global downgraded Endeavor last month due to high leverage, weak cash flow and concern that the company may possibly pursue a restructuring of its debt at some point. The big ratings agencies have been actively scrutinizing the media and entertainment business, which as been pummeled on multiple fronts by COVID-19, handing out high-profile downgrades to companies from Walt Disney to ViacomCBS parent National Amusements and CAA.

Softbank and private equity firm Silver Lake hold significant stakes in Endeavor.

An Endeavor rep did not respond to a request for comment.

Jill Goldsmith contributed to this report.

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