Endeavor, the Hollywood superagency formerly called WME-IMG, has acquired NeuLion for $250 million in cash, both companies announced this week.
You’ve probably never heard of NeuLion — but it is a significant addition to Endeavor. It gives Endeavor its own OTT business, at a time when the hottest race in video content is in live sports streaming. Amazon, YouTube, Facebook and Twitter are all in the mix.
Buying NeuLion also fits a recent pattern of acquisitive behavior by CEO Ari Emanuel: quiet M&A that is quickly growing Endeavor’s footprint in sports content.
William Morris Endeavor, the Hollywood agency founded in 2009 by Emanuel and his partner Patrick Whitesell, bought sports agency IMG in 2013 for $2.4 billion. The merged WME-IMG boasted an eye-popping list of clients on the Hollywood and the sports sides, including Matt Damon, Dwayne “The Rock” Johnson, Serena Williams, and Maria Sharapova.
The merged powerhouse began buying up sports properties. In 2015, it acquired, all in one year: Global Esports Management, an esports talent agency; Professional Bull Riders (PBR); and the Miss Universe and Miss USA pageants, formerly owned by President Donald Trump.
And in 2016, Endeavor made its biggest content move: it was the majority buyer in the $4 billion sale of Ultimate Fighting Championship, the most expensive purchase of an American sports organization ever.
Only two months later, Endeavor announced that 23 celebrity investors had signed on as part owners of the UFC: actors Ben Affleck, Sylvester Stallone, and Mark Wahlberg; musicians Calvin Harris, Anthony Kiedis and Flea of The Red Hot Chili Peppers, LL Cool J, Adam Levine, and The Weeknd; NFL quarterbacks Tom Brady and Cam Newton; New England Patriots owner Robert Kraft; TV personalities Jimmy Kimmel, Conan O’Brien, and Guy Fieri; Hollywood directors Michael Bay, Trey Parker, and Tyler Perry; tennis players Li Na, Maria Sharapova, and Serena and Venus Williams; and skateboarder Rob Dyrdek.
Unsurprisingly, 21 of those names are Endeavor clients, everyone but Tom Brady and Robert Kraft.
Buying NeuLion was the obvious next step. NeuLion powers back-end streaming video for the NFL (NFL Game Pass), NBA (NBA League Pass), EuroLeague (European pro basketball) and, most notably for Endeavor, the UFC. In 2016, UFC 200 was the first live pay-per-view event to stream in 4K video; NeuLion powered the streaming. The same year, UFC 205 was the first mixed martial arts fight in New York City after an almost 20-year ban; NeuLion powered the streaming.
But one competitor looms large: BAM Tech, the video streaming arm of MLBAM (Major League Baseball Advanced Media), which spun off last year and was quickly purchased by Disney. NeuLion was once the exclusive streaming partner of the NHL until 2015, when the NHL ditched NeuLion for BAM Tech. NeuLion’s stock tanked — but it didn’t kill the company.
NeuLion is certainly less flashy than BAM Tech, but maybe not for much longer. Now that Endeavor owns it, the door is open to start using NeuLion to stream a wide range of sports or non-sports projects by Endeavor’s star clients.
What looks like a boilerplate statement from Emanuel on the deal belies the clear fact that Endeavor seeks to keep aggressively expanding its sports holdings. “Through our content portfolio, client base, and broader network of rights holders, we’ve encountered many different platforms for distributing and monetizing content. NeuLion provides an ideal combination of technology and client services, and we’re excited for the value this brings to our existing partners and the foundation it provides for our future digital growth.”
NeuLion’s shares, traded on the Toronto Stock Exchange, will delist, and the company will become a subsidiary of Endeavor.