Monday, August 8, 2022
HomeMusicEndeavor Sued For Allegedly Stealing Marketing Ideas for IPO Effort – Billboard

Endeavor Sued For Allegedly Stealing Marketing Ideas for IPO Effort – Billboard

A consultant is suing Endeavor claiming he gave the company the blueprint to salvage its debut on the public market, which led to a successful $10.3 billion IPO, but he wasn’t compensated or given credit.

David Carde began his complaint, which was filed Thursday in L.A. County Superior Court, by comparing this alleged theft to when the founders of Endeavor left ICM in 1995 and in the middle of the night “stole a bunch of client files and stuffed them into a SUV parked by a freight elevator.”

“Following the embarrassment of the failed first IPO, Endeavor’s crushing debt became an existential threat after the COVID pandemic ground the Company’s business to a halt,” reads the complaint, which is embedded below. “However, once Endeavor stole and then embraced Mr. Carde’s approach of communicating about its business to the market a pathway to a successful IPO became apparent and was ultimately realized.”

The complaint also notes analyst criticism of Endeavor’s “spending spree” over the past decade plus. Carde specifically points to its acquisition of a what has been described as a “hodgepodge” of unrelated businesses, including mixed martial arts organization UFC, art fair company Frieze and Professional Bull Riders. He also emphasizes that the company lost $554 million in 2019 and had racked up $4.5 billion in long-term debt.

The company planned to hold its IPO in 2019 but pulled it amid skepticism from the market.

“Simply put, no one thought Endeavor had ‘structure’ to their Company,” writes attorney Devin McRae in the complaint. “No one thought Endeavor made any sense as an enterprise.”

No one except Carde, according to the lawsuit.

One week before Endeavor called off its first IPO, an attorney for Carde sent to CEO Ari Emanuel a copy of his blueprint that he says properly communicated Endeavor’s value to the market. He claims it illustrated how Endeavor’s infrastructure of supposedly unrelated businesses is actually good for the company because it drives network effects, which is the concept that the value of a product increases are more people use it.

Carde claims there was an enforceable implied contract because his attorney emailed Emanuel and WME president Ari Greenberg his analysis.

“In the Analysis itself, the document advises that Plaintiff is represented by a lawyer, Giordano, under the unambiguous heading “REPRESENTATION:” In the entertainment industry, it is axiomatic and a custom and practice that when ideas and intellectual property are submitted through representation, those materials may not be used by the recipient for free, but rather compensation will be required for any use,” writes McRae.

According to the suit, Carde’s analysis was used in the marketing materials for Endeavor’s second IPO by “each of the top 3 Endeavor executives who repeat Mr. Carde’s thesis and objective.”

Adds McRae, “After introductions which establish the contextual framework for the Company’s network effects, Endeavor then proceeds to co-opt Mr. Carde’s proprietary technical Diagram to generate the visual marketing materials which animate the Company’s network effects.”

WME does not accept submissions of any kind through its website, according to its terms of use. Anyone who does make an online submission grants the company “an irrevocable, perpetual, royalty-free license (including the right to sublicense to third parties) to exercise the intellectual property rights in any submissions.” The TOS doesn’t mention ideas submitted through email, but the major Hollywood agencies typically discourage unsolicited pitches.

The complaint, which seeks punitive damages, claims breach of implied contract and unjust enrichment.

Endeavor has not yet commented in response to the complaint.

This story was originally published by The Hollywood Reporter.

Cardes v. Endeavor by Billboard

Source link



Please enter your comment!
Please enter your name here

- Advertisment -
Google search engine

Most Popular

Recent Comments