Endeavor Is “Well-Positioned” For A Potential Writers Strike, CEO Ari Emanuel Says

Endeavor CEO Ari Emanuel isn’t making many predictions or taking sides as the WGA deadline approaches.

But on the company’s fourth-quarter earnings call with Wall Street analysts, the exec said his company, parent of talent agency WME, is “well-positioned” in the event of a strike.

“We support our clients on both sides,” Emanuel said, noting he has “been through many strikes” during his career. “Compared with last time [in 2007-08,] it’s very different and we’re very different as a company.”

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The WGA and the AMPTP are getting set to begin negotiations on March 20, ahead of the May 1 expiration of the company’s current contract. Emanuel said if a strike does happen, it would likely take place in the second half of 2023.

Emanuel and his executive team have stressed for years how diversifying into areas like sports, fashion, live events and technology has helped decrease the vulnerability of the company to any pressure experienced by WME. That theme was a prominent one on the earnings call. CFO Jason Lublin noted that more than 50% of WME rev comes from non-film or TV activity.

Along with the strike threat, a cool wind is blowing through the media business as far as streaming spending. Even top player Netflix has reined things in and newer rivals are pledging to lower their outlays. Emanuel was asked about any potential impact of a pullback on the agency business. There are “some spending more, some spending less,” he mused. “Strategies change.” Beyond subscription streaming, though, sports rights and theatrical box office are poised for strong growth in 2023, which will provide a boost, in the company’s view.

At the time of the last writers strike, which lasted from November 2007 to February 2008, no Hollywood talent agency was part of a publicly held firm. Endeavor’s April 2021 IPO changed that, and also unlocked enormous wealth for Emanuel and senior management. The proceeds from the offering totaled $511 million on Day 1, but shares in the firm have spent the past year below the IPO price of $24.

Friction with the WGA and other guilds has occasionally prompted business changes even outside of contract negotiations. Endeavor Content, the former subsidiary that created friction with the WGA and other guilds, was sold to Korea’s CJ ENM last year and has been renamed Fifth Season. The transaction was necessitated by an agreement reached by agencies and the WGA, which labeled Endeavor Content and other production entities affiliated with agencies as self-dealing packagers or projects. Endeavor retained a 20% stake in Fifth Season, but CJ directly runs it.

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