Endeavor CEO Ari Emanuel offered a roomful of Wall Street types his takes on several hot topics in media while also making a case for his privately held company’s progress in evolving from its traditional representation origins.
Speaking at the Goldman Sachs Communacopia conference in New York, Emanuel said at the start of this decade, the company made about 80% of its money through traditional representation. Today, that number is closer to 50%, he said, with Endeavor also owning events and sports leagues through a series of acquisitions in recent years, most notably its deal for IMG.
“People thought we overpaid,” Emanuel said of the $2.3 billion purchase of IMG in 2013. “But that’s the least expensive acquisition we have made” because of the new business it has opened up across sports, fashion, food and other categories.
One new arena for the company — financing and producing — has set off alarm bells and charges of conflict of interest from guilds and others in Hollywood. Hearing the moderator tee up that question, Emanuel began by sarcastically congratulating himself, “I didn’t completely roll my eyes there.” Turning more serious, he explained, “I am giving people an alternative to the walled guardians. I want to make sure that my clients have an alternative with different economics.”
Speaking of walled gardens, Emanuel predicts that is where the business as a whole is heading, as witnessed by Disney’s aggressive push into direct-to-consumer offerings. The result of this push, he said, will be a 50% decline in the broadcast TV business (in a time frame he did not specify) and about $30 billion of new money flooding the marketplace in the coming years.
All of the disruption that is redrawing the map of the media business is a positive for Endeavor, he said. By his estimate, there were just four U.S. TV network buyers of consequence in 1995, when Endeavor was founded, and about 30 around the world. Today, the U.S. number is at least 150, he said, and north of 1,000 worldwide.
“We’re in the perfect spot as people try to figure out, ‘Should we go direct [to consumer]? Should we not go direct? We’ve got all these legacy problems.’”
One of these new entrants is Apple, which remains somewhat of a mystery to Wall Street and Hollywood as to its exact road map with video programming. Emanuel predicted, “It’s going to be the same thing that they’ve had in music, with subscriptions,” noting that Endeavor has been involved in 11 of Apple’s 17 original shows to date, either as a financier or a seller.
“They’re a force,” he said. “They will have a viable business on the television and the movie side. I don’t know the pricing structure. I don’t know if that’s been worked out. But they’re buying the right brands to match up with Apple’s.”
As to whether they will license catalog series or movies, Emanuel said, “No signs of that.”