Endeavor Backs OpenBet Buyout in U.S. Restructuring Move

Endeavor CEO Ariel Emanuel has announced support for a management buyout (MBO) of OpenBet, involving CEO Jordan Levin and several other OpenBet executives. The deal, financed with cash and debt, will allow OpenBet’s leadership to gain direct ownership of the company and continue expanding its market presence. Endeavor, which also owns IMG Arena, is offering that business for sale to third parties during the transaction period.

Understanding the MBO Structure

In a management buyout, part or all of a company's management team purchases assets from its current owner, often with the goal of taking the company private. In this case, Levin and his team at OpenBet aim to continue leading the business independently. The buyout aligns with Endeavor’s broader strategy to streamline its assets, particularly as it approaches a $13 billion deal with private equity firm Silver Lake to go private. Endeavor’s decision to divest OpenBet is part of its effort to simplify operations and focus on other core businesses, allowing OpenBet’s management team to pursue its vision for market expansion and product innovation.

OpenBet is a major player in the global sports betting market, working with over 200 operators, including big names like FanDuel, PointsBet, and ESPN Bet. Recently, OpenBet expanded into Brazil through partnerships with Grupo Silvio Santos and BandBet, securing its role in emerging markets. With the MBO, CEO Levin is optimistic about the company's future, stating, “This MBO allows us to continue executing our vision for increased market expansion and product innovation.” The OpenBet team believes the company’s robust product offering and talented workforce provide a strong foundation for growth.

Endeavor’s Strategic Shift: Why Sell?

The sale is part of Endeavor’s restructuring as it prepares to go private through Silver Lake’s acquisition. News of the dual sale first surfaced in August, when Endeavor revealed that selling both OpenBet and IMG Arena was essential for finalizing the deal with Silver Lake. By offloading these assets, Endeavor aims to focus on high-growth, high-value sectors. This streamlining echoes Endeavor’s previous steps: it acquired OpenBet in 2022 for $800 million, which was $400 million below the original price and three months later than anticipated. The company also divested its lottery business in 2021, selling it to Brookfield Business Partners.

Since early this year, Endeavor integrated IMG Arena into OpenBet and conducted a strategic review to determine IMG Arena’s future. Despite the MBO, Endeavor remains open to other sales within the IMG portfolio, including events like the Miami Open and Madrid Open tennis tournaments. The MBO news follows Endeavor’s Q3 earnings report, which showed a substantial increase in revenue but a widening net loss. While revenue rose 66.6% year-over-year to $2.02 billion, heightened expenses erased those gains, increasing Endeavor’s net loss to $186.3 million. Additionally, discontinued operations, including OpenBet and IMG Arena, reported a net loss of $442.4 million.

With Silver Lake's planned acquisition marking the largest private equity buyout in a decade, Endeavor is positioning itself to make better use of its core assets while trimming less profitable ventures.

This MBO allows us to continue executing our vision for increased market expansion and product innovation.

Conclusion: Reshaping the Future for OpenBet and Endeavor

The OpenBet MBO could signal a new phase of growth for the company, backed by executives with a clear strategic vision. For Endeavor, this divestiture is a calculated move to streamline its portfolio and concentrate on high-performing divisions as it prepares for its private equity-backed future under Silver Lake.

Endeavor’s sale of OpenBet and its potential divestitures within the IMG portfolio underscore a shift towards core assets that will define the company’s future. As the MBO proceeds, OpenBet’s management team will drive market expansion, capitalizing on its unique positioning in global sports betting while Endeavor adapts to new ownership and strategic focus.