I was fishing through the fallout from the Endeavor IPO pullback and it got me thinking about a lot of stuff…

Like, what does this say about live entertainment?
How will these trends effect folks?
What can we do to take advantage of this?

Dave Wakeman
by Dave Wakeman

So let me lay out 3 ideas for you really quickly and you tell me what you think in in the comments.

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Math wins

Endeavor had revenue, but so much debt that people couldn’t turn a blind eye.

Scott Galloway said something to the effect that WeWork showed a return to the idea that math wins in the markets. Well, Endeavor continues that trend.

The reality is that when you view the IPO through the context of how much debt that the business was servicing, something didn’t add up.

To put it in terms my finance loving friends would know, the debt of over $5B was like 8 times EBITA. No one is buying that.

Private Equity seems like it could be propping up a bunch of sports and tickets, or at least causing the rapid increase in prices:

Sports was listed an amazing 223 times in the S-1.

Wow!

In some way, Endeavor was tied to almost every sport we know: UFC, NFL, Miami Open, soccer, golf, and more.

What does all this mean?

It means a lot if you look at it through the lens of costs keep increasing for sports and attendance keeps dropping.

In trying to cull through everything that was listed in the filing, it was tough for me to pull everything out, but it did seem that many major sports and minor ones were tied up in the value proposition of the filing and that would lead us to believe that some of the rights fees might have been inflated by the promise of a future IPO filing and that so much of the out of control cost structure of sports and entertainment may have been tied in this as well.

When you are sitting on several billion dollars of debt…someone is going to have to pay that back, right?

The basics of marketing, sales, and value are likely something that need to be revisited in light of this IPO not taking off:

I’m with Scott Galloway, math eventually wins!

And, in light of this IPO, I also like to think that marketing, sales, and value also win.

The filing showed a definite leaning towards acquisition of assets and “platforms”.

This is all fine and well but assets don’t watch entertainment, people do.

What do people want?

Something to distract them.
Something they value.
Something that makes them feel unique.

What was at play in the Endeavor filing was a lot of me too kind of stuff that didn’t feel unique, valuable, or likely, relevant over the long term…at least in a competitive market.

Podcast, premium experiences, content, direct to consumer to name four…

All are great, but can be done poorly and have shown a tendency towards that.

Podcasts, looking at Endeavor’s model…name me a celebrity podcast that really has captured the cultural moment outside of Shaq or Michael Rappaport.

Premium experiences, are everywhere. And, often not done well.

Content, everyone is producing it and trying to do more of it. But most of it isn’t relevant or important or valuable.

Direct-to-consumer, exactly who is making that work.

The thing is that Endeavor has tremendous assets and partners, but they also have to get back into the business of operating under the basic fundamentals of business:

What is the value we are trying to create?
Who will buy this?
Where do we reach them?
In the end, my reading of the S-1 looked like it wasn’t really built around those 3 ideas.

What say you?

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This post originated on Davewakeman.com It has been republished here with permission. Wakeman is a branding and strategy expert who often opines about the ticketing world on his website and twitter. He can be reached via email at [email protected]