Endeavor Returns $400 Million Saudi Investment. Should Penske Media Do The Same?

In the past 24 hours, there have been stories in several publications reporting Endeavor's decision to return $400 million worth of financing it obtained last spring from Saudi Arabia’s Public Investment Fund. As the NY Times reports, the decision was made by Ariel Emanuel, the chief executive of the talent agency, who was unhappy with that country's involvement with the murder last October of the Saudi journalist Jamal Khashoggi.

At an industry event in Cannes, France, on Oct. 15, Emanuel called the Khashoggi disappearance, about which many details had not yet emerged, "very, very concerning, really concerning. It’s upsetting."

Privately, Mr. Emanuel informed officials with the Saudi fund that he intended to return the $400 million that it had invested. Worried about the Saudi reaction, he began traveling at times with bodyguards, according to a person briefed on the matter.

A couple of details about this story jumped out at me. First, I wonder how people repped by Endeavor felt about the company taking the money from Saudi Arabia in the first place? Secondly, who are these mysterious people who covered the $400 million investment so Endeavor could return the full amount to Saudi Arabia?

Mr. Emanuel canvassed other investors, including some who already had put money into Endeavor, to help fill the void that would be left when the firm returned the Saudi money, according to the two people familiar with the talks, including one who is an Endeavor investor.

The process wrapped up in the past few weeks, with Endeavor investors kicking in money and the company repaying Saudi Arabia.

Also, let's not forget that the primary reason this story received any publicity is that Endeavor seems to have made sure the story was told to reporters, albeit by other parties to the deal.

And just as a sidenote, The Saudi Arabian Public Investment Fund, also known as PIF, is run by Crown Prince Mohammed bin Salman. They have invested in a number of companies, including Penske Media Corporation. That media company owns a number of publications, including the Hollywood trade outlets Variety, TV Line, Deadline and Indie Wire.

So if Endeavor is willing to walk away from $400 million worth of Saudi money, should Penske Media be willing to do the same? While owner Jay Penske never confirmed the exact amount of the Saudi investment, news reports from February 2018 suggest the amount was in the range of $200 million for a minority interest in Penske Media, with another $25 million being invested in a joint venture in the Middle East and North African region.