The entertainment company committed last November to pay $775 million for 80% ownership in the scripted production outfit, which will continue to be overseen by Graham Taylor and Chris Rice as Co-CEOs. The division has financed, packaged or sold more than 100 series and films, including breakouts like La La Land and Killing Eve.
According to today’s public filing, the $785 deal for the scripted division includes “management rights” and the firms say Endeavor is “looking to produce more than 40 movies and series by 2023.”
Endeavor has retained the non-scripted portion of the business, as well as certain documentary and film sales and financing consulting services.
“Endeavor Content will be the key driving force for CJ ENM’s global growth,” remarked Kang Ho-Sung, CEO, CJ ENM. He added: “CJ ENM plans to produce and distribute its own content for viewers all around the world with Endeavor Content, now part of the multi-studio, as the global basecamp.”
The transaction was set in motion by backlash against packaging by the Writers Guild of America. The guild waged a lengthy campaign against the practice of the same company producing a film or series and also representing its talent, calling it an anti-competitive conflict of interest. It persuaded major talent agencies to sign a franchise agreement imposing a 20% cap on the amount of a production entity that can be owned by an agency.
The divestiture had been expected for months and followed expressions of interest from numerous parties.
Business-wise, the divestiture of most of Endeavor Content will help trim Endeavor’s debt load, which has concerned some Wall Streeters since its initial public offering in 2021.
Ari Emanuel, CEO of Endeavor Group Holdings, has longstanding ties with CJ Group vice chair Miky Lee dating back to 1995. An agent at that time, Emanuel helped broker the company’s $300 million investment in DreamWorks SKG, a deal spearheaded by Lee.
Parasite, which grossed $259 million worldwide, was a milestone for CJ and the Endeavor deal represents a step-up of its activities in Hollywood. CJ is also known for its distribution and exhibition businesses across Asia.
The CJ-Endeavor mega-deal was among our nine international trends to look out for in 2022.
Andreas Wiseman contributed to this report.