As William Morris Endeavor prepares to close on their acquisition of sports and entertainment agency IMG, a leaked pro forma financial statement may have revealed key financial information about the privately held firm and their post-acquisition prospects.
The deal to acquire IMG, which TheWrap reports may be closing as soon as May 1st and WME is in the process of closing a financing deal worth $2.45 billion that will leave the company heavily leveraged. One possible approach to dealing with this added debt may be an IPO.
“They have so much debt, that is the only way out of it,” a reportedly well-placed but unidentified source told TheWrap. “They can never pay their way out of it through growing the business, so the only way to pay it off is to go public and go public quickly.”
Among the other revelations in the purported pro-forma are:
WME's Agency operations grossed a revenue of $365 million in revenue, resulting in a profit of $76 million after taxes, and interest.
A closer look at the revenue breakdown reveals that music and film/commercials were WME's biggest earner, with both generating revenue of $88 million. Scripted television and unscripted television earned the agency $77 million and $61 million respectively, while commercials and endorsements followed at $22 million.
The pro-forma also revealed what WME hopes that the acquisition will drive efficiencies for the firm and the agency hopes to trim $151 million in cost, both through eliminating redundant staff positions and through consolidation of material costs on items such as offices.
WME's private equity partners Silver Lake Partners, which first bought into WME in 2012, have increased their stake in the firm from 31% to 50%, however an insider told TheWrap that agency head Ari Emanuel - via CelebrityAccess