Los Angeles – In its May 23rd IPO registration with the Securities and Exchange Commission (SEC), the entertainment conglomerate Endeavor Group Holdings, Inc. inaccurately reported its client numbers, according to the Writers Guild of America (WGA).
Endeavor’s talent representation segment, including William Morris Endeavor (WME), is a core component of its business. Before April 13, WME represented numerous film and television writers belonging to the WGA. Since that date, however, 1,400 WGA writers have terminated their relationships with the agency. While Endeavor’s filing states that “the agency has received termination letters from a majority of its writer clients for the commissioning of writing representation services,” it hasn’t disclosed the actual number of writers who have left the agency, or adjusted its reported client base to reflect this substantial loss.
“In its IPO Registration Statement, Endeavor claims to represent over 6,000 clients including the ‘world’s most dynamic and engaging storytellers,'” said Laura Blum-Smith, WGA West Director of Research and Public Policy. “But as a result of Endeavor’s conflicted business practices, 1,400 writers have informed the agency that it no longer represents them, a fact that Endeavor fails adequately to disclose to potential investors. Endeavor’s reliance on clients and failure to address these conflicted practices make this offering a risky investment.”
In a letter sent today to William Hinman, Director of the SEC’s Division of Corporation Finance, the WGA states: “In the draft Form S-1 Registration Statement submitted to the SEC on February 14, 2019, Endeavor reports representing the same ‘over 6,000 clients’ reflected on its May 23 statement. But between these two dates, approximately 23% of this stated client base informed Endeavor that the agency no longer represents them for employment under WGA’s collective bargaining agreement. We believe this information is material to the risks of investing in Endeavor and must be disclosed.” Read the full letter.
The WGA is engaged in an historic campaign to end the conflicted business practices of talent agencies. These practices of the major agencies include demanding direct payment from the studios employing their clients, known as “packaging fees,” and leveraging their exclusive access to talent to become producers, making them, in effect, both their clients’ representatives and employers. More than seven thousand Hollywood writers represented by the WGA have left agencies that refuse to sign a new agreement with the union that realigns the economic interests of agents with those of their writer clients. Click here for the latest information on the campaign.
The Writers Guild of America West (WGAW) is a labor union representing writers of motion pictures, television, radio, and Internet programming, including news and documentaries. Founded in 1933, the Guild negotiates and administers contracts that protect the creative and economic rights of its members. It is involved in a wide range of programs that advance the interests of writers, and is active in public policy and legislative matters on the local, national, and international levels. For more information on the WGAW, please visit: www.wga.org.