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Ari Emanuel’s firm wants to buy half of UFC it doesn’t own

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Ari Emanuel is quietly hammering out a pricey plan to buy the half of Ultimate Fighting Championship that his entertainment empire doesn’t already own, The Post has learned.

The Hollywood super agent’s conglomerate Endeavor — which owns the WME and IMG agencies as well as the Miss Universe pageant — already owns 50.1 percent of the mixed martial-arts giant behind fighters like Conor McGregor and Ronda Rousey.

Now, Emanuel is looking to scoop up the remaining 49.9 percent as he stages a renewed effort to take Endeavor public following a failed IPO attempt a year and a half ago, sources said.

The fresh IPO bid, which is now being led by Morgan Stanley, will likely be filed early next month, sources said. Goldman led the first IPO roadshow, which had Endeavor seeking to raise over $600 before abruptly pulling the plug in September 2019.

The multi-billion dollar UFC buyout will likely require Endeavor to cut pricey deals with buyout firms Silver Lake and KKR, which collectively own 40 percent of the MMA company. Nevertheless, Endeavor execs believe that owning all of the popular combat club would allow them to present a “stronger package” to investors at a time when UFC has proven better able to weather the pandemic than most other live-events businesses, sources said. 

According to a person familiar with the deal, Endeavor is looking to sell equity in Endeavor to private investors ahead of the IPO. It will then use those proceeds to buy UFC. Endeavor, which was in debt to the tune of $5.5 billion last year, won’t incur more debt in the process, the source said.

The amount Endeavor is raising could not be immediately determined, nor could the amount it might be willing to pay for the rest of the UFC. A person with knowledge of the situation pegged the company’s valuation at between $6 billion and $10 billion, saying it’s been growing even as the rest of the company shrinks.  

“Why didn’t Endeavor do this before? It didn’t think it needed to,” the source said. “It was a potential thing they considered. They thought they would just go public and it would be fine. It’s not going to be that hard, right? They realized the rest of the company is not worth as much.”

The move comes as the majority of Endeavor’s businesses — which rely on Hollywood film and TV production, as well as live events such as sports, music and fashion — have been slammed by pandemic restrictions. The one exception has been UFC, which suffered a two-month hiatus before getting back to broadcasting its bloody mixed martial arts fights — giving Endeavor a much needed jolt to its bottom line.

Sarah Staudinger, Ari Emanuel, Jason Statham, Rosie Huntington-Whiteley and Neville Wakefield.
(From left) Sarah Staudinger, Ari Emanuel, Jason Statham, Rosie Huntington-Whiteley and Neville Wakefield.
BFA.com

The MMA promotion company accounted for 80 percent of Endeavor’s overall profit in 2020, Endeavor president Mark Shapiro told Endeavor staffers in a December virtual town hall, sources said. In the same town hall, sources said, Shapiro revealed that the pandemic took a $2 billion chunk out of the overall company’s revenues as earnings plunged 80 percent.

Even pre-pandemic the mixed-martial arts promotion company accounted for a healthy 50 percent of the company’s annual earnings, said a source who pegged UFC’s pandemic profits at between $400 million and $450 million.

“Buying out the remainder of UFC makes for a better investment,” said source said. “The complexity of Endeavor’s business is still there, but the UFC is the crown jewel.”

After its first effort to go public flopped, Emanuel blamed the depressed IPO market, which saw investors tanking shares of newly listed companies like stationary bike seller Peloton and ride-hailing apps Uber and Lyft.

But sources told The Post that the slumping demand for the company’s stock was also due to Endeavor’s unusual mix of assets as well as its hefty $4.6 billion debt load. Investors also griped about the complexities of Endeavor’s tie up with UFC, noting that it would be simpler if the company owned the MMA promotion company outright, sources said.  

Endeavor declined to comment.

Initially, Emanuel had been planning to list Endeavor by merging it with a so-called SPAC, or special-purpose acquisition company, sources said. But those plans shifted quickly after management took a look at the math, a source said.

Endeavor executives calculated that a SPAC — which is generally a faster way to go public, as the auditing process is shortened — would cost Endeavor as much as $100 million in fees that would go to the SPAC sponsor.

Those fees would come out of Endeavor investors’ pockets, including Silver Lake, which owns a 35 percent stake in Endeavor in addition to its stake in UFC.

Endeavor, which confidential filed its IPO paperwork with the Securities and Exchange Commission in February, hasn’t completely ruled out a SPAC, one insider said. Still, it’s moving forward with the direct IPO plan on the belief that investors are interested in “direct ownership” of the UFC, sources said.

Consolidating its ownership of UFC has long been on Endeavor’s agenda, and Silver Lake and KKR have been looking to cash out their investments after holding them for more than five years. But the brutal impact of the pandemic on its other businesses accelerated talks.

Likewise Emanuel — the inspiration for the Ari Gold agent character in HBO’s “Entourage” — has been eager to try his IPO luck again as the vaccine rollouts return life to some of Endeavor’s businesses, including the agency business that boasts clients like Oprah Winfrey, Matt Damon and Ryan Reynolds, sources said.

As The Post has previously reported, the pandemic’s fallout forced Emanuel and other Endeavor execs to implement an aggressive $500 million cost-cutting plan, which included massive layoffs, selling off an $80 million stake in Epic Games and other start-ups and securing a $260 million loan.

Endeavor’s valuation is now “significantly lower” than it was when it first tried to go public in 2019, when it was valued at $6.4 billion on the low side, one source said.

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Glasses retailer Warby Parker eyeing IPO as soon as this year

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Hipster glasses retailer Warby Parker is eyeing an initial public offering.

The 11-year-old business, which started out as an e-tailer before rolling out some 130 stores across the US, is considering an IPO as early as this year, Bloomberg reported on Wednesday.

The New York-based company has amassed a huge customer following by offering less expensive prescription glasses. Warby Parker raised $120 million in its most recent funding round giving it a $3 billion valuation, according to the report.

“We’ve always explored various financing opportunities in both the debt and equity markets,” the company said in a statement. “To date, we have successfully and deliberately raised money within the private market on favorable terms and have plenty of cash on our balance sheet. We’ll continue to make strategic decisions in line with our commitment to sustainable growth.”

Founded by college buddies Dave Gilboa and Neil Blumenthal, who met at the Wharton School at the University of Pennsylvania, Warby Parker has attracted some large investors including the mutual fund company, T. Rowe Price.

It turned it first profit in 2018, Gilboa told The New York Times at the time.

Warby Parker co-founder Neil Blumenthal
Warby Parker co-founder Neil Blumenthal
Brian Ach/Getty Images

Customers can get prescriptions through their apps on their smartphones and use cameras to pick out frames. The company also has an optical lab in Sloatsburg, NY where it produces lenses.

While Warby Parker is not the least expensive option, it beats Costco in a recent comparison with Costco charging as little a $126 for a pair of prescription glasses compared with Warby Parker’s least expensive pair at $95.

“As consumer walk into a LensCrafters or Sunglass Hut, they see 50 different brands of glasses but don’t realize that all those brands are owned by the same company that owns the store that they’re standing in, that probably owns the vision insurance plan they’r using to pay for those glasses,” Gilboa said in a recent CNBC interview.

“And so, it’s no surprise that a lot of those glasses are marked up 10 to 20 times what they cost to manufacture,” he said.

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Dogecoin hits new high boosted by DogeDay hashtags

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Dogecoin prices hit an all-time high on Tuesday, with a market capitalization above $50 billion, after social media fans used hashtags to fuel a rally in the meme-based cryptocurrency.

An 8,000 percent price surge this year has seen Dogecoin, which was launched as a satirical critique of 2013′s cryptocurrency frenzy, overtake more widely-used cryptocurrencies like Tether to become the fifth-largest coin.

While Dogecoin, whose logo features a Shiba Inu dog at the center of the meme, a represents only a fraction of bitcoin’s $1 trillion value, it can be traded on crypto exchanges and more popular mainstream trading apps.

“The Doge rally represents an interesting convergence,” said Diana Biggs, CEO of crypto start-up Valour, after Dogecoin’s price soared by more than five-fold in the last week to a record 42 cents, according to CoinMarketCap.

“A meme coin created as a joke for early crypto adopters whose community found that kind of thing to be fun, with now a new generation of retail investors for whom memes are a native language,” Biggs added.

Dogecoin fans used the hashtags #DogeDay and #DogeDay420 to post memes, messages and videos on Twitter, Reddit and TikTok, referring to the informal April 20 holiday to celebrate cannabis which is marked by smoke-ins and street parties.

“GIMME THAT DOGECOIN LAMBO!!! #DogeDay” one tweeted, referring to the Lamborghini car popular in crypto culture.

Dogecoin’s rise has come amid a surge in online trading of stocks and crypto by retail investors, stuck at home with extra cash because of the COVID-19 pandemic. It has not coincided with a growth in usage of the coin for payments or in commerce.

The same trend has spurred a boom in usage of online trading apps like Robinhood, and also fueled the social-media driven rally in GameStop stock that pitted retail investors against hedge funds earlier this year.

“It’s an extension of the same phenomenon that has led Tesla stock to be valued well beyond fundamentals and more recently to the GME (GameStop) short squeeze,” said Ajit Tripathi, head of institutional business at decentralised finance startup Aave.

Like other cryptocurrencies, Dogecoin’s price is heavily influenced by social media users including Tesla chief Elon Musk, whose tweets on the cryptocurrency in February sent its price soaring over 60 percent.

“If this goes as planned and everybody including Mr. Musk go ahead and just pour money into Doge on April 20th all at once Doge will reach prices that originally were not even conceptual,” a TikTok user said in a video promoting the coin.



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Amazon is opening a beauty salon in London

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Amazon is opening a hair salon in London — its latest odd lurch into new businesses as the pandemic continues to fuel the e-commerce giant’s torrid growth.

The Amazon Salon, unveiled in a Tuesday blog post, will occupy a two-story, 1,500-square-foot space in Spitalfields, a trendy neighborhood in East London that is also home to Amazon’s UK headquarters, which houses about 5,000 employees.

Indeed, the new salon, which will be open seven days a week, initially will only cater to Amazon workers. Members of the public will be able to make bookings in “the coming weeks” by calling, emailing or visiting the salon, the company says.

“This will be an experiential venue where we showcase new products and technology,” Amazon said in a blog post on Tuesday, adding that there are no plans to open other salons.

That will include making Amazon’s Fire tablets available at each station, allowing customers to use augmented reality technology to see what they look like as a platinum blonde, brunette or with highlights, the company said.

The salon is located at Amazon’s UK headquarters, which houses about 5,000 employees.
The salon is located at Amazon’s UK headquarters, which houses about 5,000 employees.
Amazon

The salon will also test new “point-and-learn” technology, where customers can point at a product they are interested in on a display shelf and the relevant information, including brand videos and educational content, will appear on a display screen.

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