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New Patrick Whitesell Venture To Get $250 Million From Silver Lake As It Takes Endeavor Private; Whitesell, Ari Emanuel Will Each Receive A Plane

Silver Lake’s plan to take Endeavor private includes an investment of $250 million of seed equity “into a new business to be founded, managed and controlled” by executive chairman Patrick Whitesell.

The business will include “investing in and providing services to companies in the entertainment, media and sports industries; developing, producing, financing and exploiting film, television and digital audio visual content; talent management; and consulting with other entertainment companies,” according to an SEC filing today that include new contract details for Endeavor’s top executives.

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So Whitesell, while continuing to be a big Endeavor shareholder and board member and remaining in a central role in WME, will be branching out. That’s all there was about the new company in the filing, which also laid out new employment letters for CEO Ari Emanuel and president and COO Mark Shapiro, who will be running Endeavor.

The document also refers a number of times to a private Endeavor exploring potential asset sales except for TKO Group and WME. TKO combined Endeavor’s UFC business with WWE, which Endeavor acquired from Vince McMahon and that falls under the company’s Owned Sports Rights division. The other three are Events, Experiences & Rights, Representation led by WME, and Sports Data & Techology.

As reported yesterday, private equity firm Silver Lake Capital will be leading the privatization what it called the largest in media and entertainment history and the biggest in any sector over the past decade with Endeavor. The equity value of the acquisition is pegged at $13 billion. The move was signaled as a possibility last October due to what Emanuel called a disconnect between Endeavor’s stock price and the value of its assets.

The merger agreeement call for “reasonable best efforts to facilitate, negotiate and consummate the sale transfer, divestiture or other disposition” of assets, excluding all or part of publicly traded TKO Group, of which Endeavor owns 51%, and the agency representation business of William Morris Endeavor Entertainment.

It said Emanuel would receive a $25 million “asset sale transaction bonus” following the sale or disposition of “certain specified assets”. He will also receive a quarterly royalty payment from WME equal to 2.5% of the net cash profits of the agency business.

Emanuel and Whitesell will each be given of one of Endeavor’s private planes, according to the 255-page filing. It specified that neither will be given a tax gross up — an additional amount of money to cover income taxes owed — unless the other gets one as well.

Shapiro’s base salary will rise to $7 million a year as of April 2, 2024 with a guaranteed annual bonus equal to $15 million. He is eligible for a $15 million transaction bonus when Endeavor is privatized. He will also be eligible to receive a maximum cash bonus of $100 million “upon the completion of certain qualifying asset sales.”

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