Saudi Arabia eyes stake in Miss Universe owner Endeavor

Endeavor, the holding company for Hollywood talent agency WME, is attracting the interest of Saudi Arabia's trillion-dollar wealth fund

Ben Affleck and Matt Damon's talent agency looks to expand its operations with extra funding (Bloomberg)

Saudi Arabia’s sovereign wealth fund is in talks to buy a stake in Endeavor, the holding company for Hollywood talent agency WME, people familiar with the matter said.

The Public Investment Fund, known as PIF, is in preliminary discussions to invest more than $500m (£363m), which will help the talent agency for Ben Affleck and Matt Damon expand its operations, said the people, who asked not to be identified because the information is private. The stake could range between 5 per cent and 10 per cent, though the final size and valuation are still being negotiated, they said.

Discussions are ongoing, and no final decisions have been made, the people said.

Endeavor was valued at $6.3bn including debt when it raised money in August 2017, a person with knowledge of the matter said at the time, while its equity was valued at $5 billion. Its existing investors include Silver Lake, SoftBank, Singapore’s sovereign wealth fund and Canada Pension Plan Investment Board.

Representatives for PIF, Endeavor and Silver Lake declined to comment.

An investment would give Endeavor money to fund its ever-growing web of entertainment, sports and fashion businesses. Chief Executive Officer Ari Emanuel and Chairman Patrick Whitesell have pushed Endeavor far beyond the roots of the talent agency for which the company is named.

Saudi Cinemas

Endeavor runs WME, which represents movie stars, directors, TV producers and musicians. It also owns Professional Bull Riders, the Miss Universe organisation and IMG, a sports and fashion company. Endeavor completed its biggest deal to date in 2016 when it acquired Ultimate Fighting Championship, the mixed martial arts company.

In December Saudi Arabia ended a ban on public cinemas imposed in the 1980s, marking yet another step in the kingdom’s efforts to diversify its economy away from oil and bolster its entertainment industry. The first multiplexes are expected to open in March 2018, the Ministry of Culture and Information said in a statement last month. The aim is to reach 2,000 screens in more than 300 cinemas by 2030, with the industry expected to contribute about $24 billion to the economy and add more than 30,000 permanent jobs, it said.

The PIF separately is also investing in an entertainment city on the edge of Riyadh, one of several large property developments it’s backing in Saudi Arabia.

Entertainment Deals

AMC Entertainment agreed to explore potential investments in cinemas in the kingdom with the PIF, it said after the ban was ended. Imax, which operates the only cinema in Saudi Arabia, airing educational films at a science centre, said it’s already been approached by chains about building more cinemas.

Boosting the entertainment industry is a key part of the Saudi wealth fund’s strategy over the next few years. The PIF will establish a new entertainment investment company that is expected to invest up to 10bn riyals, according the fund’s 2020 strategy published last year.

The Saudi fund, which aims to become a $2 trillion investment giant, is considering borrowing from banks for the first time as it seeks investments in the kingdom and abroad, people familiar with the matter said this month.

It has already announced several large international deals, including a $20bn commitment to US infrastructure fund managed by Blackstone up to $45bn for a technology fund managed by SoftBank and a $3.5 in stake in Uber.

Bloomberg