United States securities and exchange commission logo
March 17, 2021
Ariel Emanuel
Chief Executive Officer
Endeavor Group Holdings, Inc.
9601 Wilshire Boulevard, 3rd Floor
Beverly Hills, CA 90210
Re: Endeavor Group
Holdings, Inc.
Draft Registration
Statement on Form S-1
Submited February
16, 2021
CIK No. 0001766363
Dear Mr. Emanuel:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form S-1 submited February 16, 2021
Prospectus Summary, page 1
1. As part of your
offering, we note that you are buying 49% of UFC, that you are engaging
in a Up-C transaction
and that you are engaging in a simultaneous private
placement. Please
revise your prospectus summary to quantify and describe any
payments, compensation,
equity or other value that your principal stockholders, directors
or executive officers
received or will receive in connection with this offering and in the
transactions in
connection with this offering.
Ariel Emanuel
FirstName LastNameAriel
Endeavor Group Holdings, Emanuel
Inc.
Comapany
March NameEndeavor Group Holdings, Inc.
17, 2021
March2 17, 2021 Page 2
Page
FirstName LastName
2. In the portion of the table on page 2 labelled "Global Presence,"
please add percentages
for revenue from and assets located in each of these areas.
3. You state that your business has delivered strong financial
performance prior to the impact
of COVID-19. However, we note from page F-7 that you incurred losses
from continuing
operations before income taxes and equity earnings (losses) of
affiliates for each of the
years in the two year period ending December 31, 2018. Please revise
or advise, as
appropriate, and balance the summary by adding a discussion of the
financial challenges
you face, such as your history of net losses and your long-term debt.
UFC Buyout, page 10
4. In connection with your reference to the Transaction Agreement on page
11 you
state: "The Transaction Agreement has been filed solely to provide
investors and security
holders with information relating to its terms. It is not intended to
be a source of financial,
business or operational information about us, UFC Parent or our
subsidiaries. The
representations, warranties and covenants contained in the Transaction
Agreement are
made only for the purposes of the Transaction Agreement and are made
as of specific
dates and are solely for the benefit of the parties to the Transaction
Agreement." Please
revise to remove any potential implication that the referenced
agreement, or any
descriptions of its terms, does not constitute public disclosure under
the federal securities
laws on which investors are entitled to rely and for you which your
are responsible.
Redemption rights , page 23
5. In connection with their redemption rights, here or in appropriate
place in your prospectus,
please identify the members of the Endeavor Operating Company, holders
of the
Endeavor Profits Units, and the members of Endeavor Manager.
Management's Discussion and Analysis of Financial Condition and Results of
Operations, page
107
6. Please revise this section to analyze and explain the downward trend
(net losses) in your
results for fiscal year ended 2019 and the nine months ended September
30, 2020. In
doing so, please discuss any known trends that may be impacting this
measure with a view
to understanding how and whether such trend may impact your ability to
be profitable in
the future. In addition, please disclose this trend in the summary.
Management's Discussion and Analysis
Results of Operations, page 115
7. We note you include a section on non-GAAP financial measures prior to
discussing and
analyzing your results of operations at the segment level. Please
revise to discuss and
analyze results by reportable segment for both revenue and allocated
expenses prior to the
section on non-GAAP financial measures so the non-GAAP measures are
not more
prominently presented. Refer to non-GAAP C&DI Question 102.10. Please
also revise
Ariel Emanuel
FirstName LastNameAriel
Endeavor Group Holdings, Emanuel
Inc.
Comapany
March NameEndeavor Group Holdings, Inc.
17, 2021
March3 17, 2021 Page 3
Page
FirstName LastName
segment-level disclosures to identify, quantify, and analyze each
material factor
underlying changes in results, including when such factors offset each
other. For
example, we note from page F-51 that the mix of revenue in your Owned
Sports
Properties segment changed significantly between Events and
Performance and Media
Rights from 2018 to 2019.
8. You disclose on page 116 that direct operating expenses for the nine
months ended
September 30, 2020 decreased in part due to deferred media rights
fees. Please disclose
the expected impact from these and future deferrals, if any, on your
results of operations,
cash flows, and liquidity.
Non-GAAP Financial Measures
Adjusted EBITDA, page 121
9. We note your disclosure of the non-GAAP measures Adjusted EBITDA
Margin on page
30 but your historical financial data does not present a margin
percentage calculated in
accordance with GAAP. Please balance your presentation of Adjusted
EBITDA margin
with a margin percentage for the most directly comparable GAAP measure
here and
elsewhere in the filing where Adjusted EBITDA margin is presented.
Refer to Item
10(e)(1)(i)(A) of Regulation S-K.
COVID-19 related costs
Note 8, page 123
10. Your non-GAAP results include adjustments for "COVID-19 related
costs". Please
explain in detail how the amount of the adjustment directly related to
COVID-19 was
objectively determinable and why it could not be partially attributed
to other market
factors and conditions. In your response, tell us the components of
the costs included in
the adjustment and for each cost address the following:
how the adjustment directly attributable to COVID-19;
how the adjustment is incremental to normal operations; and
is the adjustment based on actual vs. hypothetical amounts?
Liquidity and Capital Resources
Cash Flows Overviews
September 30, 2020 Compared to September 30, 2019 , page 134
11. Please clarify your analysis in regard to how the factors disclosed
directly affect cash
regarding the variance in net cash flows of operating activities.
References to results of
operations, which are prepared on the accrual basis of accounting,
noncash items and
working capital items may not provide a sufficient basis for an
investor to fully
understand comparative changes in cash flows of operating activities
in terms of cash.
Your disclosure should discuss and quantify the factors that directly
affected cash of
operating activities for each and between comparative periods
presented, and address the
drivers underlying each factor cited. Refer to Section IV.B.1 of
Interpretation:
Ariel Emanuel
Endeavor Group Holdings, Inc.
March 17, 2021
Page 4
Commission Guidance Regarding Management's Discussion and Analysis of
Financial
Condition and Results of Operations available on our website at
http://www.sec.gov/rules/interp/33-8350.htm for guidance.
Concurrent Private Placements, page 231
12. We note under your concurrent private placements that the Company has
the option to
designate certain of your Private Placement Investors to purchase
Class A common stock
directly from certain of your existing investors that sign a joinder
to the Subscription
Agreement at a price per share of $24.00. Please clarify your
disclosure as to whether
those "existing investors" may include principal stockholders,
directors or executive
officers.
Financial Statements, page F-1
13. Please update your financial statements in accordance with Rule 3-12
of Regulation S-X.
Endeavor Operating Company,LLC, page F-5
14. You disclose that you will be treated as a taxable entity for income
tax purposes after
consummation of the offering. Please revise to present pro forma
income taxes, net
income and earnings per unit on the face of the historical statement
of operations for each
period presented as if income taxes had been computed for those
periods. Include a note to
the historical financial statements that provides the basis for this
pro forma presentation.
You may contact Patrick Kuhn at 202-551-3308 or Lyn Shenk at
202-551-3380 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Scott Anderegg at 202-551-3342 or Dietrich King at 202-551-8071 with
any other
questions.
FirstName LastNameAriel Emanuel Sincerely,
Comapany NameEndeavor Group Holdings, Inc.
Division of
Corporation Finance
March 17, 2021 Page 4 Office of Trade
& Services
FirstName LastName