It should be noted there is no indication that UTA is for sale, regardless of any potential interest by anyone.
Joking that he appreciated CAA for “validating my strategy in 2008” of wanting to grow “organically,” Emanuel noted with a verbal shiv that “ICM has not been what it used to be 15 years ago.” Leaning in, he also countered the perception that WME is a minor player in Endeavor’s overall business “Our representation business has grown double digits every year,” he said, putting the pandemic year of 2020 aside. “It is the core feeder for how our business has grown.”
The reference to 13 years ago is of course when Emanuel and Patrick Whitesell began their march to merge their David of the 1995 formed Endeavor Talent Agency with the Goliath of the 1898 founded William Morris Agency. The two became WME in 2009 with Emanuel and Whitesell soon not paying out any cash, as the former pointed out tonight, and soon seeing the WMA leadership out the door.
A veteran on the red chair sit-down with Kara Swisher, the often-pugilistic Endeavor boss’ latest appearance comes one day after the Hollywood agency landscape saw a seismic shift with CAA’s purchase of ICM Partners becoming public.
“I think what they bought was five incredible TV writers,” Emanuel quipped to Swisher when the New York Times columnist asked what CAA actually got out of the multimillion-dollar deal. “They bought a very good book business and a very good soccer representation business out of Europe,” he added.
Even as the Emanuel co-founded WME faces a newly scaled up rival in the talent representation realm, parent company Endeavor made it clear its is centering on a bigger environment. Never one to willingly lose a news cycle, it snagged it own fair share of headlines Monday with the $1.2 billion in cash and stock purchase of sports betting provider OpenBet.
“We’re in the sports business and we are in the gaming business,” Emanuel said of the impetus behind the OpenBet deal. “It is an arena that is growing significantly around the globe and we have big competitors in that space…it was a perfect fit for us,” he adding, noting the metrics of the $77 billion global sports betting business.
The last of the big agencies to declare “uncle” in the legal and PR battle with the WGA over the union’s successful campaign to end the lucrative practice of packaging, WME’s time in the labor octagon was a match worthy of the Endeavor-owned UFC. Also this week, domestic and international film sales and film financing consulting services WME Independent was created as the sale of a majority stake in Endeavor Content moves forward to meet the WGA requirements of phasing out of packaging.
In that context, Emanuel on Tuesday downplayed the belief that Swisher and many have that the past year saw the inevitable shift in the big-screen business away from cinemas to hybrid releases, or straight to streaming. “The moment you and I are comfortable sharing an armrest, the movie business is back,” the exec proclaimed, while repeating “I’m not in the predicting business.”
Looking at the stock market, Endeavor’s had a pretty decent run since going public in late April. Nothing flashy, shares jumped with the OpenBet news yesterday and popped today – up 6% in a terrible market. The response from the Street makes sense as the company has been focusing heavily on sports/sports betting and will combine OpenBet with IMG Arena and start breaking that out as a fourth reporting segment in its quarterly earnings (along with Owned Sports Properties; Events, Experiences & Rights; and Representation).
“I think it went off pretty well,” Emanuel said of the company’s second IPO effort, after having pulled the plug at the eleventh hour previously. “I still give a sh*t,” he admitted of staying in the game after all these years.
In that vein, Emanuel spoke of his company and the industry needing to do more and better in terms of inclusion. “If we don’t adapt and change for the right reasons, not just the financial reasons, we’d be foolish,” Emanuel said when asked by Black List founder Franklin Leonard of the gulf between the makeup of WME and the demographics of the entertainment industry audience.
The former agent to Donald Trump declared he would not represent the former Celebrity Apprentice host now.
Overall, Endeavor is taking a bit of a different direction from a combined CAA-ICM Partners, a deal that seems to make representation the focus. Emanuel really wanted an IPO to have a currency for deals, and he’s using it. He has insisted the tactic be utilized judiciously because the company’s debt still needs to de-leverage. In that vein, Emanuel on Monday called the OpenBet deal “transformational.”
Some free-floating enthusiasm regarding agency M&A after yesterday’s news may be boosting Endeavor shares as well. They closed Tuesday up almost 6% at $28.89, despite major indexes being down.
The Code Conference continues through tomorrow.
Jill Goldsmith contributed to this report.