April 3, 2024

Read in Browser [[link removed]]

POWERED BY

Disney completes a decisive victory in its shareholder proxy fight against activist investor Nelson Peltz. … Endeavor’s move to become a private company will fuel the formation of a new media company targeting sports. … Football helmet manufacturer Riddell lands a major investment. … Plus: More on LSU star Angel Reese, the UFL, Manchester United, and the Big 12.

— Eric Fisher [[link removed]] and David Rumsey [[link removed]]

Disney Wins Shareholder Proxy Battle, ESPN Stay on Iger-Led Path [[link removed]]

Gary A. Vasquez-USA TODAY Sports

Disney has secured a critical victory in its shareholder proxy fight against billionaire activist investor Nelson Peltz, allowing the ESPN parent to continue largely on its current strategy of navigating an unprecedented wave of media disruption.

Following months of accelerating run-up [[link removed]], Disney shareholders firmly rejected a bid Wednesday by Peltz to gain two board seats, affirming the company’s entire recommended slate of 12 directors, including current CEO Bob Iger (above), by what Disney termed “a substantial margin.” The board, as a result, stays populated by Iger-friendly directors, and all but one were appointed on his watch.

Peltz had argued Disney needs to be far more aggressive on multiple business fronts, such as a succession [[link removed]] plan for Iger, clarifying ESPN’s digital strategy, overhauling the company’s TV and movie business, and bundling [[link removed]] ESPN+ and Netflix. Instead, the shareholder vote marks a strong affirmation for the company’s existing plan, which includes Iger stepping down at the end of 2026.

For ESPN, that existing plan also includes the development of a stand-alone, direct-to-consumer version of the network debuting [[link removed]] next year, a new sports betting partnership [[link removed]] with Penn Entertainment, a potential partial equity sale [[link removed]], and a much-debated streaming joint venture [[link removed]] with Fox and Warner Bros. Discovery. That DTC version of ESPN will also be made available through Disney+, the company said in its annual shareholder meeting.

“With the distracting proxy contest now behind us, we’re eager to focus 100% of our attention to our most important priorities: growth and value creation for our shareholders and creative excellence for our consumers,” Iger said.

Disney Arguments

Strongly boosting the case for Iger and Disney’s current strategy is a marked escalation in the company’s stock, which is up by more than a third so far this year. But that momentum did not continue Wednesday as shares closed down more than 3% to $118.98 each.

Despite the loss, Peltz and his Trian Fund Management still claimed some credit for influencing Disney’s current trajectory.

“We are proud of the impact we have had in refocusing the company on value creation and good governance,” Trian said.

Iger, meanwhile, also lauded the ongoing rise of women’s sports, citing record viewership [[link removed]] generated Monday on ESPN for March Madness, and said he’s “never been more bullish” on women’s sports than he is now.

Endeavor’s Move to Go Private Will Form a New Media Company [[link removed]]

NYSE

Endeavor’s move [[link removed]] to become a private company is additionally creating a new media entity, in part targeting the sports industry, that will be run by one of the company’s key leaders.

Patrick Whitesell, Endeavor executive chairman, will be starting and leading a separate company that will receive $250 million in seed equity from Silver Lake, the private equity giant that is leading the Endeavor privatization. The business, according to a filing made Wednesday with the U.S. Securities and Exchange Commission, is “(a) investing in and providing services to companies in the entertainment, media and sports industries, (b) developing, producing, financing and exploiting film, television and digital audio visual content, (c) talent management and (d) consulting with other entertainment companies.”

Whitesell will retain his role with Endeavor, and particularly the WME agency it controls, while also leading this new venture. But the filing provides a further window into the lengths that Endeavor and its key leaders are going to create additional value in and around the company, as well as additional terms of the Silver Lake deal. A lack of full recognition from investors in what Endeavor has built in recent years helped prompt the move to go private.

Among the other elements contained in the latest Endeavor SEC filing:

CEO Ari Emanuel is set to receive a $25 million “asset sale bonus” as part of the deal and also will get quarterly royalty payments equal to 2.5% of quarterly net cash profits for WME. He will get a company plane, as well as reimbursement for costs related to usage of it. Additionally, Emanuel will receive a series of equity awards in the newly private Endeavor. Endeavor president and COO Mark Shapiro will see his base salary more than double from $3 million to $7 million, and he is also now eligible for a guaranteed annual bonus of $15 million for every year he is with the newly private company, as well as a bonus of up to $100 million upon completion of certain qualifying asset sales. If Endeavor enters into a “superior proposal” than the Silver Lake deal, it will pay a breakup fee of $288.5 million. If Silver Lake fails to complete the agreement, it will pay a $705 million termination fee.

Endeavor is the majority owner of UFC and WWE parent TKO Group Holdings, and is also the corporate parent of assets such as IMG, On Location, and Professional Bull Riders.

SPONSORED BY ACURA

Energy That Drives

[[link removed]]

Acura [[link removed]] has been a challenger since its beginning—raising the bar, rebelling against the norms, and redefining what it means to drive since 1986. Now, Acura’s making that same energy, electric.

Introducing the all-electric Acura ZDX [[link removed]]. Crafted using the same formula that brought us electrified supercars, the ZDX features a Bang & Olufsen® sound system, DC Fast Charging capability, and a high-performance Type S model with an estimated 500 horsepower, making the ZDX Acura’s most powerful SUV to date.

Unlock the energy [[link removed]].

ONE BIG FIG Making Headway

Kirby Lee-USA TODAY Sports

$400 million

Amount being invested in football helmet maker Riddell by BC Partners, according to Bloomberg News [[link removed]]. More than $300 million of it is being earmarked for returning capital to shareholders, including Fenway Partners, while a smaller portion is being allocated for debt repayment. Bloomberg also notes the deal is part of a trend in which buyout firms are using direct lenders to give money back to investors when they can’t sell off companies they’ve owned for a long time. It allows Fenway to cash out of an older investment in Riddell, which it purchased in 2003 [[link removed]]. Riddell hasn’t attracted many buyers, largely due to legal issues related to concussions caused by its football helmets.

AWARDS

Every year, Front Office Sports’ awards program recognizes the best and most accomplished in the business of sports.

The 2024 Best Venues Award celebrates the venues that have met and exceeded the evolving demands of fans and that set the new industry standard for success.

🏆 Nominations are open through April 8. Submit your venue [[link removed]] now.

STATUS REPORT One Up, One Push, Two Down

Gregory Fisher-USA TODAY Sports

WNBA fans ⬆ LSU women’s basketball star Angel Reese (above) announced she is declaring for the draft. Reese is believed to have name, image, and likeness deals worth about $1.8 million, but she has said they are for multiple years, and she would still earn money from them if she turned professional. Reese had one year of eligibility remaining.

UFL ⬆⬇ The new spring football league drew [[link removed]] an average TV audience of 1.04 million viewers for its opening weekend on ESPN and Fox. That’s down from Week 1 of the revamped USFL’s debut in 2022, which drew an average of 1.57 million viewers, and the XFL’s relaunch last year, which drew 1.3 million. However, the UFL’s Week 1 rating is up from the combined average of USFL and XFL games last year of 865,000.

Manchester United ⬇ The Premier League club has canceled the corporate credit cards of senior officials as part of a cost review process instigated by new minority owner Jim Ratcliffe to help the club comply with profit and sustainability regulations, sources told ESPN [[link removed]]. Manchester United was fined $323,000 last year following a breach of UEFA’s financial sustainability regulations.

Big 12 ⬇ The conference announced it is delaying its plans to play games from several sports in Mexico until 2025. Unveiled last summer, “ Big 12 Mexico [[link removed]]” was supposed to launch with a set of men’s and women’s basketball games in December in Mexico City.

FRONT OFFICE SPORTS AWARDS

Rising 25 Nominations Are Here!

Rising 25 is back, and it’s time to nominate an up-and-coming young professional changing the game in the business of sports.

The Front Office Sports Rising 25 Award [[link removed]] celebrates the careers of the brightest young stars in the business of sports. To date, we’ve honored 175 individuals and we’re looking for our next group of young stars.

Nominations are open now through Friday, May 17. Winners will be announced in June.

Nominate [[link removed]] today.

Conversation Starters Worthy of the crown: Lindsey Harding, coach of the Stockton Kings, has made history by becoming the first woman [[link removed]] to win the NBA G League Coach of the Year award. The NHL, in partnership with Warner Bros. Games and TNT Sports, is launching “MultiVersus NHL Face-Off,” where on April 14, Avalanche and Golden Knights players will be animated in real time as characters like Bugs Bunny, Batman, Superman, Wonder Woman, Velma, and Shaggy. Check it out [[link removed]]. Iowa-LSU’s 12.3 million viewers exceeded the viewership of almost all women’s college basketball, ESPN college basketball, MLB, NHL, MLS games last season, and most NBA and college football regular-season games. Did you watch it? Let us know [[link removed]]. Editors’ Picks A’s Could Be Inching Toward Sacramento Move After Week of Local Meetings [[link removed]]by Alex Schiffer [[link removed]]Oakland wants the A’s to pay top dollar on their way out. Ronda Rousey Accuses Top WWE Trainer of Inappropriate Behavior [[link removed]]by Tim Marchman [[link removed]]“Nobody around me acted as if it was abnormal,” she said. NCAA Exec Wants to Move Up Review of Women’s Tournament [[link removed]]by Margaret Fleming [[link removed]]The women’s tournament could use all neutral sites by next March. Advertise [[link removed]] Awards [[link removed]] Learning [[link removed]] Video [[link removed]] Podcast [[link removed]] Sports Careers [[link removed]] Written by Eric Fisher [[link removed]], David Rumsey [[link removed]] Edited by Matthew Tabeek [[link removed]], Catherine Chen [[link removed]]

If this email was forwarded to you, you can subscribe here [[link removed]].

Update your preferences [link removed] / Unsubscribe [link removed]

Copyright © 2024 Front Office Sports. All rights reserved.

460 Park Avenue South, 7th Floor, New York NY, 10016