There weren’t any spectators at Saturday night’s multi-bout Ultimate Fighting Championship event in Jacksonville, Florida. Outside of sports fans eager for some televised bloodshed, there was an unusually interested party watching the fights from California: the WME talent agency.
The pandemic has slashed profits for all of Hollywood’s deal makers, but few of the town’s agencies were more vulnerable to the global shutdown than WME, which has made huge bets on live events such as mixed martial arts. Over the last few days, the once high-flying WME has slashed jobs and secured an emergency $260 million loan to keep operations funded.
But the agency’s overall financial health — like an MMA combatant who’s taken too many punches — still looks wobbly.
WME’s parent, Endeavor Group Holdings, has announced plans to lay off or cut the compensation (by as much as 30%) of a third of its 7,500 total employees. Hundreds of workers at the Beverly Hills agency itself are expected to be pink-slipped. In an earlier statement, WME said it was taking “a variety of actions to mitigate the impact of this pandemic.” The company had no further comment on Monday.
Unlike other talent agencies, whose business is narrowly tied to commissions from actors and filmmakers, WME has invested billions in live events, almost all of which have been canceled or postponed.
Besides clients such as Dwayne “The Rock” Johnson and Matt Damon, WME (the result of a 2009 merger between the William Morris and Endeavor talent agencies) acquired live events including professional bull riding, the Miss Universe pageant and a majority position in the UFC. WME also launched a production company, which has been shuttered by the coronavirus.
Those deals have left WME parent Endeavor Group with a staggering $4.6 billion of long-term debt, according to security filings tied to a failed September attempt to take WME public, the first such stock offering in Hollywood history.
Its credit rating has been downgraded to junk bond status, and last week Endeavor said it was selling part of its stake in Epic Games, which makes Fortnite.
Other talent agencies have announced layoffs and salary cuts but for now WME has the most on the line. Agency founder Ari Emanuel once wrote: “You’ll never succeed unless you take big risks.” By the same measure, you might not fail if you don’t.
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