AUDIE CORNISH, HOST:
In Hollywood, a powerhouse firm called Endeavor is preparing to go public. The company is best known for its talent agency that represents a wide range of stars, from The Rock to Oprah. But in recent years, CEO Ari Emanuel has expanded Endeavor's business well beyond just the talent agency and taken on a lot of debt in the process. As Ben Bergman reports from Los Angeles, that has investors wary.
BEN BERGMAN, BYLINE: Ari Emanuel was immortalized on the HBO show "Entourage" as Ari Gold - brilliant, ruthless, profane.
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JEREMY PIVEN: (As Ari Gold) You don't have to say anything. You know why? Because you pick up all your stuff because you're [expletive] fired.
BERGMAN: Just like in reality, on "Entourage," Ari wanted to grow its business beyond just representing talent.
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PIVEN: (As Ari Gold) This is now the biggest agency in the world, which makes me the biggest agent in the world. Now, can anyone tell me why I chose to be the biggest agent in the world? It's so I can stop being a [expletive] agent.
BERGMAN: The real Ari Emanuel still spends some of his time being an agent - negotiating deals for clients in exchange for a 10% fee. But he figured that could only bring in so much money. Endeavor declined to make Emanuel or anyone else available for this story because of the pre-IPO quiet period. But he explained at a Fortune magazine conference four years ago that he's gone on a major shopping spree.
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ARI EMANUEL: Buying businesses that we can own and operate, as opposed to represent, is crucial to kind of how we're going to create the mix of things we do.
BERGMAN: Endeavor now owns everything from the Miss Universe pageant - bought from former client Donald Trump...
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FRANCESCA HUNG: I believe there is not one single definition of beauty, but embracing one's difference is what truly makes you beautiful.
BERGMAN: ...To the mixed martial arts, UFC...
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UNIDENTIFIED ANNOUNCER #1: ...Getting knocked out.
UNIDENTIFIED ANNOUNCER #2: Oh, my goodness.
BERGMAN: ...And even professional bull riding.
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UNIDENTIFIED ANNOUNCER #3: It's so hard for a bull to get that kind of air. Watch how he breaks off that ground.
BERGMAN: Emanuel says assets like this offer global scale to advertisers like Visa and InBev, and they can come to Endeavor for one-stop shopping. They can sponsor lots of different events and get endorsements, too - a good way to reach consumers as people watch less traditional TV.
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EMANUEL: As we talk about the end of the 30-second spot, and advertisers want to come to a company, we have the ability to kind of deliver on multiple different fronts.
BERGMAN: But analysts like Matthew Kennedy of Renaissance Capital are skeptical such a mishmash of assets will pay off for investors.
MATTHEW KENNEDY: I know I've heard that they say that they'll turn bull riders into underwear models and stuff like that. But my sense of it is just this is another thing that is unknown about the business.
BERGMAN: Buying all those assets has also been expensive; Endeavor is weighed down by more than $4.5 billion of debt and has rarely turned a profit. Gene Del Vecchio, who teaches business at USC and wrote the book "Creating Blockbusters," says Endeavor was dominant in the agency business.
GENE DEL VECCHIO: They were the whales in their little pond. What's happened, however, is because of private equity money, they've been venturing out into this broader part of the entertainment world. But in that context, they become almost a guppy in this giant industry that's really dominated by these sharks.
BERGMAN: Sharks like Disney and Netflix. And by going from agent to producer, Endeavor has also made enemies of Hollywood writers, who say agencies are no longer acting in their best interest. In April, the Writers Guild ordered its members to fire their agents, and 1,400 writers left Endeavor. The guild's policy director, Laura Blum-Smith, says the IPO should be put on hold until the standoff is resolved.
LAURA BLUM-SMITH: The company's own registration statement even says that this dispute could alter the commercial landscape of agent representation of writers, and that any such change could have an adverse effect on their business. But they seem to just be charging ahead anyway.
BERGMAN: Charging ahead is exactly what Endeavor is doing; it's not in Ari Emanuel's nature to do anything else. For NPR News, I'm Ben Bergman, in Los Angeles Transcript provided by NPR, Copyright NPR.
