Endeavor CEO Ari Emanuel, who has long espoused the benefits of streaming’s boom times, said he’s “not nervous” about Warner Bros Discovery possibly pumping the brakes as it looks to take on Netflix and Disney.
Discovery chief David Zaslav, as Emanuel was reminded during Endeavor’s fourth-quarter earnings call, recently declared the company doesn’t want to “win the spending war” in streaming. That line, amplified by Discovery CFO Gunnar Wiedenfels this week at an investor conference, prompted a lot of head-nods among those on Wall Street who view streaming as a hugely expensive, risky business.
“I’m not really nervous if he says he doesn’t want to spend,” Emanuel said of his friend Zaslav. “Everyone else is spending. And again, look, there are seven, eight players in the marketplace.”
While Endeavor is known for owning WME, its portfolio is a diversified one, spanning sports, events, technology and other areas. Even so, Emanuel, a former longtime agent, wasn’t shy about characterizing streaming as a big tailwind for the company.
Total spending on programming across all platforms is expected to hit $140 billion this year, the CEO noted, in large part due to the push into streaming. “[Zaslav] and I joke about how much money he’s going to have to spend with me to compete,” he said. Despite any public vows of austerity, Emanuel insisted, “I don’t believe any of them are not spending money on content.”
Rattling off the key players — Amazon, Apple, Netflix, Discovery, Warner, Peacock, Roku, Disney, Hulu — Emanuel continued: “If one of them drops out or goes down a little, it doesn’t really affect us. Like I said, we’re platform-agnostic.”
In the movie business, he added, during the pandemic there were just three active buyers. Today, “you now have a robust theatrical business.”
Emanuel often has talked of streaming eliminating the need for gross participants to make money after a film reaches certain revenue thresholds. In streaming, payments are made up front, in a “cost-plus” model that assumes the total commercial life of a film, presuming that every release is successful to a degree. That led one analyst to ask if the positive impact on Endeavor’s financials from the rise of streaming could be considered a “pull-forward,” a business term meaning benefits from a future period pulled forward into a current one, creating an artificial bump.
“There’s been no pull-forward,” Emanuel maintained.
In the fourth quarter, Endeavor posted a net loss but better-than-expected revenue, with a major comeback in its representation division after the doldrums of Covid in 2020.
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