| Hollywood superagent Ari Emanuel spent the last decade buying dozens of companies to build an entertainment powerhouse that spans sports, Hollywood, fashion and gambling. But just two years after taking it public, Ari Emanuel has decided it's time to try something else. On Oct. 25, the chief executive officer of Endeavor Group Holdings Inc. said he was initiating a strategic review of the company, which represents stars like Emma Stone and Ryan Reynolds and owns businesses ranging from the Professional Bull Riders league to the Frieze art fairs. Emanuel blamed the "continued dislocation between Endeavor's public market value and the intrinsic value of Endeavor's underlying assets," which is Wall Street speak for "we think our stock price is too low." Despite recent moves that might have lifted the stock — acquiring World Wrestling Entertainment, a new dividend and a stock buyback — the shares sank below $18 a share this past week. Shares have jumped about $5 since the announcement of a strategic review. But even at $23 a share, Endeavor is trading at about a third below where it ought to be, according to Bloomberg Intelligence. Just take a look at this chart, created with help from my colleague Samantha Stewart: A strategic review often results in a sale of some or all of a company's assets. Emanuel's largest shareholder, the private equity firm Silver Lake Partners, said it isn't interested in selling anything. Silver Lake holds a controlling stake in Endeavor, which means nothing happens without its approval. It's possible that someone will come and offer a huge premium for Endeavor, which Silver Lake would have to consider. It's also possible they've just made this announcement so investors boost the stock price. But the most likely scenario is that Silver Lake will buy out the other shareholders and take the company private. Taking the company private just a couple of years after going public is a humbling moment for Emanuel, who spent a few years preparing his company for the public markets and convincing everyone Endeavor had the right vision and the right leader. Emanuel first made his name as a hotshot Hollywood agent, but Endeavor's CEO aspired to be more than an agent: He wanted to be a mogul like Rupert Murdoch or John Malone. He and Patrick Whitesell, Endeavor's executive chairman, raised money by selling a minority stake in his business to Silver Lake and then went on a buying spree. That started in 2013 with IMG, a sports agency that also had a large business representing the media rights to sporting events and marketing college sports. In the next few years, Emanuel and Whitesell acquired all or part of the Miss Universe Organization, the Barrett-Jackson collector-car auctioneer and a business providing data to sports betting sites. In 2016, they acquired UFC, which the agency had represented for years. While competitors often accused the company of overpaying and questioned how the pieces fit together, Emanuel insisted they would give Endeavor more power in the market and allow him to offer clients more options. The modern client, he said, no longer just wanted to just make movies. Emanuel quieted the skeptics by signing a $750 million media rights deal for the UFC and labored for years to bring Endeavor public before finally issuing shares in April 2021. Yet Wall Street never quite knew what to make of this collection of assets, and there are those who believe a talent agency should never be public. The share price has vexed company leadership for a long time, and Emanuel has expressed frustration publicly again and again (including to me at the Screentime conference earlier this month). The company is profitable, has plenty of cash and not a lot of debt. Previous asset sales failed to excite investors as well. Over the past two years, the company reached agreements to sell IMG Academy, Endeavor Content and a bunch of minor league baseball teams for more than $2 billion. "For the street, our Endeavor story was a little confusing," Emanuel told me. Two events over the past month and a half made the current state of play untenable. Emanuel and his deputy/successor Mark Shapiro planned to boost the shares by merging Endeavor's Ultimate Fighting Championship league with the publicly traded World Wrestling Entertainment. While investors didn't understand Endeavor's business, they do like the UFC and WWE. But shares of TKO Group, the resulting public company, plunged in late September after WWE signed a new TV deal for the weekly SmackDown show. The deal with NBCUniversal, at about $287 million a year, raised investor concerns about how much TKO would get for its other weekly show, Raw. Valued at a peak of $18.3 billion when the UFC/WWE deal closed in mid-September, TKO's market capitalization has shriveled by as much as 28%, taking Endeavor down with it. Then, in early September, French billionaire Francois-Henri Pinault bought a controlling stake in Creative Artists Agency, the competing talent-management company that reps Tom Hanks and Reese Witherspoon, in a deal that valued that business at $7 billion. Emanuel believed the eye-popping price would boost Endeavor shares — its original business after all is a talent agency with an equally buzzy roster of names. It didn't. Endeavor was down 19% in the month leading up to Emanuel's announcement of the strategic review. Given the current valuations of TKO and Endeavor, the street values WME, Emanuel's talent agency, at less than half of CAA. While Emanuel and Shapiro tried to rally investors in private meetings, the situation didn't improve. Investors won't bid up your share price jsut because you ask nicely. On the heels of Emanuel's announcement, Silver Lake, which holds a 71% voting stake in Endeavor, issued its own statement: "Silver Lake firmly believes in Endeavor's business and is not interested in selling its shares in Endeavor to a third party nor in entertaining bids for assets that are a part of Endeavor," the private equity group said. Like a number of media companies, Endeavor has multiple classes of stock, including shares with supervoting rights that are held by Silver Lake, Emanuel and Whitesell. Silver Lake is working on an offer to take the company private. It also made clear others should stay away. The private equity group must make an offer that's high enough to convince unaffiliated shareholders it's not trying to engineer a sweetheart deal. While one might assume Silver Lake would also try to divest some assets, the company has said it isn't interested in selling anything. (The company did quite well taking Dell private.) We know one move they won't be making. Endeavor had explored buying a 10% stake in the PGA Tour in exchange for a 10-year renewal on several commercial deals it had with the golf league. But those talks are over. Silver Lake co-CEO Egon Durban, who also serves as chairman of the Endeavor board, has funded Emanuel's ambition for a decade now. While Wall Street didn't buy into the vision, Durban says he's ready to write Emanuel his biggest check yet. Spotify added 23 million users last year and has added 118 million users in the last year. It's going to post its best year of user growth ever. Now, some of this is because Spotify has a free option. Most of its growth is coming via the free tier in markets like India and Indonesia. Spotify now has about 178 million customers in what it calls "rest of world" markets, which is everywhere that's not North America, Latin America or Europe. It's added about 100 million in those places in just the last two years. But it's not just free users. Spotify added six million paying subscribers last quarter and 31 million in the last 12 months. The company's paid service is adding more customers than any premium video service. (Caveat: It costs about a third as much as Netflix.) And in news that made Wall Street investors smile, the company also turned a quarterly profit for the first time in two years. Tech companies are making more money off your eyeballsThe economy is roaring and the (digital) advertising market is along with it. Alphabet Inc. (Google), Meta Platforms Inc. (Facebook), Amazon.com Inc. and even Snap Inc. reported stronger advertising sales than the street expected this past week. It wasn't all good news. Shares in Meta tanked after the company warned ad sales could slow in the future. TV advertising, meanwhile, is headed in the wrong direction. The No. 1 album in the world is…My guy Benito is back on top. Bad Bunny has the best-selling record in the US and the most popular album in the world on Spotify. He dethroned Drake. Taylor Swift is the real answer, but her album won't officially be on top until the end of the week. She has the top five songs in the world right now thanks to the new version of her seminal album 1989. The No. 1 video game in the world is...Spider-Man 2, which is one of the fastest-selling games in Sony history. (My colleague Jason Schreier wrote about the game's back story, including why the third game in this series is called number two.) The No. 1 movie in the world is…Five Nights at Freddy's. The horror film grossed $78 million in North America and $131 million worldwide this weekend. It delivered the biggest global opening of any movie ever released by producer Jason Blum. Deals, deals, dealsFor the past several years, the most divisive figure in the music business has been manager Merck Mercuriadis. Mercuriadis acquired tens of thousands of song copyrights, many under the banner of Hipgnosis, a royalty fund that is publicly traded in the UK. Mercuriadis paid prices that his rivals felt were obscene; they were convinced he was going to drive another company into bankruptcy (as they said he did with Sanctuary). But before long, other companies started to match his prices. Then the market for catalogs corrected itself, the cost of debt went up and Merck's reputation in the creative community suffered. Now Hipgnosis is at a crossroads. Its investors aren't happy and seem to want Mercuriadis out. But Mercuriadis has a lot of control over what they can do with his assets. They scuttled a proposed sale of about one-fifth of the catalog to Blackstone, which has sponsored another Mercuriadis venture. How does this end? Not well. I listened to new albums from three British artists over the last week -- Jorja Smith, Sampha and the Rolling Stones – as well as the work of Abba and Corinne Bailey Rae. My favorite discovery, however, was Mon Rovia, a self-described Afro-Appalachian artist who performed at a small club. Check him out wherever you listen to music. | 
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