Ari Emanuel & Endeavor Victorious In IPO Intellectual Property Theft Suit – Update
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UPDATE, 5:43 PM: Ari Emanuel has received an early Christmas present courtesy of a LA Superior Court judge.
Peeved at Wall Street, the Endeavor CEO may be evaluating “strategic alternatives” for the currently publicly traded entity but at least he won’t have to go to mattresses over “theft of …intellectual property” allegations out of the company’s eventual IPO in 2021.
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A December 15 unsealed ruling by Judge Gregory Keosian rejected any notion by plaintiff David Carde that there was “a valid implied-in-fact contract between himself and Endeavor over analysis and marketing strategies the consultant sent to the company unsolicited almost four years ago. “Mr. Carde is entitled to be recompensed for Endeavor’s unjust enrichment in an amount to be proven at trial,” declared his Early Sullivan Wright Gier & McRae LLP lawyers in their initial complaint of March 2022.
“Defendant Endeavor Group Holdings, Inc’s Motion for Summary Judgment is Granted,” the Judge ordered.
Case closed.
Kind of.
Carde “respectfully disagrees with the Court’s conclusion” on the issue of the plaintiff’s expectation of payment under applicable law. All of which means, Carde plans to appeal
“We are pleased with the court’s decision granting summary judgment in favor of our client, Endeavor, holding plaintiff’s idea theft claims absolutely meritless,” Latham & Watkins partner Jessica Stebbins Bina said in a statement to Deadline today. “As the court recognized, Endeavor does not accept unsolicited submissions, and never entered any contract of any kind with plaintiff.”
The matter was mistakenly sealed on December 12 and unsealed about 72 hours later. Again, case closed.
PREVIOUSLY, MARCH 4, 2022 PM: No one is ever going to say that Ari Emanuel doesn’t play rough, but a new lawsuit filed today accuses the Endeavor boss of having some very sticky fingers in his well compensated desire to turn his 2019 IPO dreams into a 2021 reality.
Seeking a jury trial over breach of implied contract and unjust enrichment, consultant David Carde is claiming Emanuel and Endeavor surreptitiously used an “11-page highly detailed analysis” they were cold emailed of “a detailed roadmap of how Endeavor could and should communicate its business value to the market.”
In a highly detailed, illustrated and often dramatically worded complaint filed in LA Superior Court today by attorneys at Early Sullivan Wright Gier & McRae LLP, Carde tosses around terms like “the theft of …intellectual property” pretty liberally (read it here).
“The circumstances of the delivery of the Analysis to Endeavor created an implied in fact contract that Mr. Carde would be paid if Endeavor used it,” the suit says of the early October 2019 unsolicited and unresponded to email from lawyer Michael Giordano to Emanuel, and then later WME president Ari Greenberg (who Carde claims he knew through charitable works). “In violation of this implied in fact contract, Endeavor then proceeded to steal Plaintiff’s ideas and intellectual property – without the required compensation – and put them to use in its communications with the market for the second IPO which convinced the market that Endeavor was an enterprise worth over $10 billion dollars,” the document adds.
“Mr. Carde is entitled to be recompensed for Endeavor’s unjust enrichment in an
amount to be proven at trial,” the complaint goes on to say. “In engaging in the misconduct alleged herein, Endeavor acted with behavior so depraved, thus entitling Plaintiff to an award of punitive damages, in order to make an example of Defendant and punish Endeavor’s pattern of despicable behavior and therefore deter such wrongful conduct in the future.”
While no dollar figure for those damages is given in the suit against Endeavor Group Holdings, Inc, it is pretty clear that Carde is likely looking for a court judgement or a settlement in the hundreds of millions.
“We believe these claims are without merit and Endeavor intends to defend itself vigorously,” an Endeavor spokesperson told Deadline of the Carde suit.
However, with the usual statement calling the suit meritless and promising to defend themselves to come, it is a fact that the 11th hour ditched first IPO in 2019 was an “embarrassment” to Endeavor, as Carde’s suit says.
It is also an undeniable fact that the tensions and stresses of that faceplant were made all the more bracing by the ravages of the Covid-19 pandemic on the world and the specifically in this case, the entertainment, events, and media business. Whether or not Carde’s “network effects” theories were enough to turn that ship around, if the material was, as he claims, appropriated for the second shot investors roadshow Emanuel and Patrick Whitesell went on …well, that seems to be a matter of perspective for the courts to determine.
“The introduction of Mr. Carde’s Analysis, including his thesis and objective, are lifted as the opening introductory remarks in the second IPO’s Roadshow Video by each of the top 3 Endeavor executives who repeat Mr. Carde’s thesis and objective,” the complaint explicitly alleges.
The interesting twist is Carde’s suit also explicitly acknowledges his own debt to the “Content Conversation” work of George Gilder and Bharat Anand — which might end up being a hefty swath of this case if and as it moves forward.
Now, for you students of industry history, Emanuel has long said that he was heavily influenced in his ambitions early in his agent career by Gilder’s 1990 “Life After Television” book. Correspondingly, Harvard Business School economist Anand has openly been a paid consultant/advisor to Emanuel and Whitesell over the years.
All of which creates a whole other timeline of where some of the “one-of-a-kind Company” notions in the marketing material for Endeavor’s IPO 2.0 could have originated from …but that’s for the court to figure out.
As many know, Endeavor finally went public in April 2021 after having bailed on a that previous IPO plan at literally the last minutes in 2019. The climate was more adverse for the company leading up to the prior attempt given its ownership of Endeavor Content and opposition from the Writers Guild and others in Hollywood over what many considered to be self-dealing. Endeavor reached a deal with Korea’s CJ ENM late last year to sell majority control of the content unit. Along with other agencies, it also signed a franchise agreement with the WGA, agreeing to a cap on its ownership of production.
The CJ transaction boosted the stock heading into the end of last year, but it has since drifted down near its initial price at the time of the IPO. In a market dipping overall because of geopolitical strife, Endeavor shares have shed 7% today to slip just below $27.
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