Ari Emanuel Talks WME-IMG's China Strategy: "You Need Proper Partners"

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Neil Shen (left) and Martin Lau

The talent agency and sports-fashion powerhouse is boosting its presence in China with a new subsidiary, launched in partnership with private equity firm Sequoia Capital China and Tencent.

Business in China is all about guanxi, or relationships. It's a tip that WME-IMG has taken to heart. "If you want to handle this market properly, you need proper Chinese partners," says co-CEO Ari Emanuel. That's why the talent agency and sports-fashion powerhouse on June 9 revealed a new China-based subsidiary, majority owned by WME-IMG, with partners including leading venture capital and private equity firm Sequoia Capital China and, importantly, Tencent, one of the country's leading internet companies. (Fellow Chinese firms Focus Media and FountainVest Partners also are participating in the initial investment.)

WME-IMG, led by Emanuel and Patrick Whitesell, is boosting its presence in the territory via IMG's pre-existing footholds in sports and events — it runs Shenzhen Fashion Week, golf's WGC-HSBC Championship and tennis' Shenzhen Open and handles rights for the Chinese Super League, the country's top soccer division. "We've seen a huge step-up in economics as it relates to sports rights in China," Emanuel tells THR. Last year, China Media Capital paid $1.3 billion for CSL rights and Tencent paid $500 million to stream NBA games in five-year pacts. The state aims to quintuple its $170 billion sports industry, now about 0.6 percent of its GDP, by 2025.

Following sports, WME-IMG next will migrate its entertainment assets. Pointing to the performance of Legendary's Warcraft, which opened to more than $150 million in China's theaters, as an example of the country's huge upside, Emanuel says the agency will capitalize on the expertise of its Chinese partners. "[Tencent president] Martin Lau and his team have built the proper organization to handle entertainment, sports, gaming, etc.," says Emanuel, highlighting its dominance in the country's set-top box and social app markets. (THR has a content partnership with Tencent.) He also notes Sequoia has helped to bring Airbnb and LinkedIn to China under the leadership of managing partner Neil Shen.

The new subsidiary is about "the ability to help our clients understand how to capture that marketplace," Emanuel adds. "You'd better know what you're doing in China." To that end, the colorful superagent is brushing up on the local language: "I'm going to learn how to say 'F— you' in Chinese."

This story first appeared in the June 24 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.