TOKYO: Japan’s Softbank has invested $250 million in WME-IMG, which values the talent and sports agency at $5.5 billion, the companies announced today.
Private equity firm Silver Lake is the biggest shareholder in WME-IMG, having invested $200m for a 31% stake back in 2012. The valuation from the Softbank deal would rep a major increase in the company’s overall value. In 2014, WME co-toppers Ari Emanuel and Patrick Whitesell bought leading sports agency IMG for $2.4 billion. While some analysts at the time commented that WME had overpaid for the company, synergies have begun to bear fruit for WME.
“SoftBank brings a unique industry perspective and a commitment to help us deliver valuable new opportunities to our clients and partners in markets around the world,” the WME-IMG co-CEOs said in today’s announcement. The agency says it will use the additional cash for investments and to fuel expansion initiatives.
That will represent “the next phase of its growth,” further developing and driving its client and content offerings,” says SoftBank Director Ron Fisher, who managed the investment.
In some ways, the deal is not a surprise. Softbank’s key media investment advisor is Raine Group, itself a boutique merchant bank launched in 2009 by former Goldman Sachs banker Joe Ravitch and closely aligned with WME. Raine played a key role in the Endeavor-William Morris merger that led to the creation of WME. It is expected that Softbank’s capital injection will be used to finance further expansion and corporate acquisitions.
Softbank has been increasingly active in the media space, led by vice chairman Nikesh Arora, formerly Google’s top sales exec. Under Arora, Softbank has alternately invested $250 million in Legendary Entertainment, acquired video streaming service DramaFever and wireless provider Sprint, as well as purchasing of a $627M stake in fast-growing Indian online marketplace Snapdeal. Softbank also kicked the tyres of Dreamworks Animation back in 2014 and also made an unsuccessful play for Universal Music Group back in 2013.
