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Endeavor CEO Ari Emanuel: Content Boom to Boost 2022 Earnings

The Hollywood Reporter
The Hollywood Reporter
 2022-03-16
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Endeavor reported Q4 and full-year 2021 earnings Wednesday that reflected a resurgent talent representation business, though it swung back to a loss after recording a profit in Q3.

The company had revenue of $1.5 billion in Q4, and a net loss of $16.7 million, after posting a profit of $64 million in the prior quarter. For the full year, Endeavor beat Wall Street expectations and its own guidance, hitting revenue of $5.1 billion, though it had a net loss for the year of $467.5 million. 2021 was Endeavor’s first year as a public company, with the company going public in an IPO last April.

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Notably, the company also released bullish 2022 guidance, with revenue expected to be between $5.2 billion-$5.45 billion. And those revenue numbers are without Endeavor Content, which contributed about $700 million to the company’s 2021 revenue haul, and which was sold to South Korea’s CJ ENM last year (Endeavor retained a 20 percent stake, as well as EC’s nonscripted business).

Endeavor CEO Ari Emanuel told analysts on the company’s earnings call that the company sits at the “c enter of sports and entertainment” and that secular trends in the content business are part of the reason that the company is so bullish on 2022 and beyond.

“As the definition of content to continue to expand … this only presents more opportunity for our clients and our owned assets going forward,” Emanuel said. “No matter what form content takes, we will be there every step of the way.”

He specifically cited podcasts and NFTs, two digital products that have seen a rapid rise in recent years.

“Those are the areas where, when we define content, most people look at TV and movies, we look at the full scale of the media landscape,” Emanuel added. “They have halo effects across the platform.”

That doesn’t mean TV and film are dying, however. When asked about the impending WarnerMedia-Discovery merger, Emanuel said: “[Discovery CEO] David [Zaslav] and I joke about how much money he is going to have to spend with me.” But, when pressed whether he has concerns that Zaslav could trim budgets to save money, Emanuel added: “I’m not nervous if he decides he doesn’t want to spend, because everyone else is spending.”

Among Endeavor’s three divisions, its WME /talent representation segment stood out, delivering $717.9 million in the quarter and $2 billion for the year, up over 100 percent compared to the same quarters a year ago, but also up double-digits compared to the same quarters in 2019, pre-COVID. Emanuel told analysts that the WME business helps inform the rest of the company’s segments by giving an early indication into future entertainment or sports trends.

Its owned sports properties, which include UFC and PBR, had revenue of $277.3 million in the quarter and $1.1 billion for the year, up 3 percent and 16 percent respectively, compared to the year prior. The company said that the UFC “delivered its best financial year in its 28-year history.”

Endeavor’s events, experiences and rights segment had revenue of $516.7 million in Q4 and $2 billion for the year, up 23 percent and 28 percent respectively compared to the year prior, as the situation around the COVID-19 pandemic continued to ease.

The company expects to add a fourth segment later this year when it closes its acquisition of the sports betting platform OpenBet. The company now expects that to happen in Q3 of 2022.

And sports betting may be a target for future M&A. Calling the company “very curious” Emanuel said they are regularly looking for companies that can fit into its segments, including betting. “You will continue to see us moving in those directions,” he said.

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