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With concerns around belt-tightening at major entertainment companies, Hollywood has become concerned that the ever-growing demand for premium content is a bubble close to bursting.
“I am the arms dealer here, the largest arms dealer here across the whole platform,” Emanuel said at a Goldman Sachs conference Tuesday, noting Endeavor’s ownership of WME, and that WME’s representation business has grown double digits over the past 11 years, excluding 2020. “No, it is not slowing down. Sorry. Good for me.”
But he also explained his rationale in more detail. Films take 18 months to two years to make, while most TV shows take a year or more. With Endeavor’s representation of actors, writers and directors, the company is seeing the demand pipeline a full two years out. And while companies like Netflix, Disney and Warner Bros. Discovery may be becoming more selective with where they spend their cash, they still spend billions of dollars annually, and much of that still flows to A-list talent. Peacock and Paramount+, meanwhile, appear poised to increase their content spend.
And tech giants like Apple and Amazon are also significantly increasing their spend, while new players like Roku continue to enter the space.
“Premium content is a requirement for all of these services,” Emanuel said, adding that legacy entertainment companies “still need to defend” their broadcast and cable networks as they invest in streaming.
“If you don’t keep on having new programming, whether that be sports, or dramas or comedies or movies, you don’t get people on those services,” Emanuel added.
But that doesn’t mean everything is A-OK with Hollywood’s traditional business lines. Theatrical film distribution will change, with fewer titles in theaters and new windowing options, Emanuel said, adding that WME is negotiating with companies like Amazon and Netflix about how and when their films will see theatrical releases.
“We are having conversations with Amazon about, is it going to be 15 days, 25 days, day-and-date? There is no one way or another,” he said. “Certain movies even on Netflix now, they are going to do four weeks in theaters … There is no set model right now, because they are still figuring it out.”
And while UFC has some time left on its rights deal with Disney, Emanuel sounded confident that the combat sports giant could score a rich new deal when the time for renegotiation hits.
“I am feeling really really good. Really good,” he said, citing the latest NHL and soccer deals. “We don’t have a season, we do 42 fights per year; we can toggle up.”
As for what Endeavor is focusing on next, Emanuel says the company will be providing more granular details around its live events and sports betting lines of business in the coming quarters in its earnings reports.
And, of course, he was asked about Endeavor’s interest in new M&A.
“There is a lot of opportunity in the M&A space, but unless it is going to put a new category up or put a moat around our business, we don’t go after it,” he said. “If it can add to the events business or it can add to the betting business and add for owned sports or representation, we go after it.”
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