Ari Emanuel Says Endeavor Sitting Pretty In Era Of AVOD, Surging Sports Rights, Podcast Deals & Booming Live Events; Sees No Hit “At Any Point” From A Shift In Content Spend

Updates With comments from the post-earnings conference call: Attempt CEO Ari Emanueli TODAY told TODAY that if content spending continues to decline, his company is “not feeling it.” Now answering this question from Wall Street every quarter, he does all of Endeavor’s high-end deals across the entertainment spectrum.

“Effort is a proxy for material growth and a barometer for composite content, he said. dragon house Co-creator and showrunner Ryan Condall’s overall deal with HBO for a podcast by sportscaster Stephen A.Known Mercy with Stephen A. Smith) Keanu Reeves first television role (devil in the white city for Hulu). “And it’s going across the board. We don’t feel any reduction in spending.”

“Movies, television, sports rights” are the only way to keep people engaged, Emanuel said on a call after third-quarter financial reporting. And now the big players are moving to AVOD “where they have to add more content. Netflix has to go and live the games.”

Yes, big entertainment players have tried to appease the street by promising a fresh look at content costs and profits. “I understand what they have to say. But we are not seeing any reduction in our representation segment … and that is not happening at any point.”

On AVOD — With a new Netflix service and one coming to Disney, he hopes to renegotiate the contract but “we’re not there yet.”

“I would suspect there may be talks for a new revenue model at every turn of a new content platform. I don’t know what those threads are. But mostly [contracts] SVOD has rights, so if they want to take AVOD they have to come back.”

Netflix, which has been away from both live and sports for a long time, recently bid for Formula One, lost to ESPN, and is looking at other leagues, deals, and events. Emanuel first sees it being used abroad before moving to the domestic sphere. The streamer just announced its first live comedy show with Chris Rock.

With Apple, Amazon, YouTube, Paramount Global, Warner Bros. Discovery, Comcast, Fox and others, competition for game rights is “only increasing. I don’t see it going down in this environment either,” the Endeavor chief said.

Shares of Endeavor jumped nearly 6% after earnings, outpacing the market, after gaining nearly 5% during the session.

The company saw a surprising loss on minority investments last quarter, not just its core businesses, along with a tougher comp from the year-ago period that included results. effort materialA business that was mostly sold in January.

Sports properties owned by UFC Strong growth was seen in the form of talent representation. The division, called Events, Experience and Rights, was slow, impacted by last year’s events and some tough comps.

Starting in January, Endeavor Sports will add a fourth division called Data & Technology which includes OpenBet and IMG Arena.

before: Endeavor turned red last quarter with a loss of $12.5 million, which stemmed not from its core businesses but from a minority investment in struggling college sports marketing film Learfield and its remaining 20% ​​interest in Endeavor Content.

Endeavor sold a large amount of Endeavor content to CJ ENM of Korea in January, holding 20% ​​of the scripted business, non-scripted portions and some documentary and film sales and financing consulting services.

The company, run by CEO Ari Emanuel, posted a profit of $63 million in the year-ago quarter.

Learfield IMG College is a big collegiate sports marketing film with Endeavor and Silver Lake among its investors.

The total loss, $84.5 million net of tax, included write-downs, and resulted in an EPS loss of 4 cents per share, up from a positive 16 cents a year ago.

Endeavor’s revenue fell from $1.39 million to $1.22 million, but was in line with forecasts.

The company-owned sports property division led by UFC saw a 39% to $402 million in revenue driven by higher media rights fees and live event, partnership, consumer product and licensing revenue as well as an additional pay-per-view event and more. saw an increase. Program with live audience. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) increased 45% to $196 million.

Events, Experiences and Rights saw flat sales of $440.6 million (down 1%) on some media rights deals, with events not taking place annually, including the Ryder Cup, UEFA Euro Championship and CONCACAF World Cup qualifying games, over time. are not. Some of which were earlier in 2022 than in the prior year. It cited developments from Wimbledon, Frieze Seoul, Aer Lingus Classic and concerts. Adjusted EBITDA was $49.7 million, down 42% at the time of the events, insurance payments from a year earlier and higher personnel costs.

Revenue was down 42%, representing $388 million for the quarter, but largely because last year’s numbers included $334 million in sales of Endeavor Content. Excluding that, revenue increased by 17%. The company noted strong demand for talent, including the ongoing recovery of music and comedy touring, and increased corporate brand spending.

EBITDA of $133 million was down 6%. The prior year included $26.5 million from Endeavor Content.

“Despite the turbulent macroeconomic environment, our business performed well in the quarter,” Emanuel said. “Given our unique position relative to a set of highly resilient secular industry trends in premium sports and entertainment content and live events, we remain confident in our ability to continue our long-term growth strategy while being a sound manager of capital. Huh.”

The company said total debt stood at $5.427 billion at the end of September, up from $5.684 billion at June 30. It paid out $250 million last quarter and plans to do the same in the current fourth quarter.

Cash and cash equivalents totaled $970.8 million in September and $1.8 billion in June.