--:-- Kara Swisher: Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher. Today, we've got a bonus episode. It's my interview with Ari Emanuel, the CEO of Endeavor, from this year's Code Conference.
--:-- Ari Emanuel: I love spinning. Oh, do you like it? Oh, I do. I know, it's nice. You've never done this. I want this in my bedroom. So Ari just told me he loves spinning. I want this in my bedroom. So the reason he's not here, he wasn't here yesterday, is because he bought something for $1.2 billion. Yeah. So why don't you talk about that first, OpenBet. Okay. What's the thinking behind it?
--:-- Kara Swisher: Well, we're in the sports business. We are in the gaming business, in the data and the video feeds to the 470 bookies around the globe. And it was inside one of our verticals, which is events experiences. And we really weren't getting credit. We represent 150 sports. We own some sports that have gaming around them. It's an area that is growing significantly around the globe. And we have big competitors in that space. We've always said in our strategy in M&A that we would build moats around our business. This became available because of when they bought Scientific Games off of Mr. Perlman, they had to reduce some of the debt. And it just filled all the verticals that we needed, having a complete stack in this space, whether that be players, whether that be all the different things that you need in that when you go out to the bookies around the globe. And so it was a perfect fit with us. It puts us at the head of the line in that space. The businesses in 2025, I think they estimate the gaming business on a global basis would be $77 billion. The United States will be a 25% kegger of that. The globe is about 13. And we then took that out of events and experiences. We made a new vertical because the other thing we said to the street is that we're going to give clarity and more insight into our different businesses. And this does that.
--:-- Kara Swisher: Okay, that begs the question of what you didn't buy. Because another deal went down this week. Two agencies, CA and IMG, merged or bought. Why didn't you buy them? One of them. There was a rumor. But did you look at them?
--:-- Ari Emanuel: Well, I would say the following. Okay. In 2008, I didn't spend any money on merging with William Morris. I'm not sure what CA paid for ICM. And if you really, first of all, it kind of, they compete with William Morris, Endeavor. ICM was, it was really probably two and a half agencies of size, CAA, us, and UTA, kind of half. ICM has not been what it used to be back 15 years ago. When Suhail Rizvi bought it, we were looking at it when we were looking at William Morris. Right. He took all the value out when he took all the packaging economics out of the business. At the time, actually, CAA said, you know, we're going to grow organically. I appreciate them validating my strategy in 08. And past 08, between Mike Barkowitz, James Dixon, the Harry Walker Agency, Artist Voice out of Australia. And in the last six months, we've brought over about 20 agents. We have continued to grow our representation business to stay number one because our thesis was distribution was changing and expanding and you needed to be in more verticals to also help your clients grow their businesses. And that's what we've done. They're just coming at it 13 years late.
--:-- Kara Swisher: Okay, but what did they buy? Did you look at it?
--:-- Ari Emanuel: No. I think what they bought was five and maybe more. I just know the five incredible TV writers. They bought an operating pretty good music business, kind of not high-profile names, but they bought a very good book business. And they bought a soccer representation business out of Europe. Mazel tov. Okay. But one of the things they said was essentially talent first, talent first, talent first. And I think one of the questions many people asked me to ask you was, what does professional bull riding have to do with Brad Pitt?
--:-- Ari Emanuel: Well, let me just say the following. I would say the reverse. I have been talent first since 08 and growing different businesses for talent to expand in. So if Mark Wahlberg or Dwayne Johnson wants to do speaking, wants to do a licensing business, if Michael B. Jordan wants to start an advertising agency, which he did and we did with him, with our company 160 over 90, we have grown our clients' businesses throughout our platform and made sure that they get opportunities across it. So if Dwayne Johnson wants to do a live event, that's what we do. If he wants to do TV shows, if we gave him help when he wanted to buy XFL. That's how we grow our business. And we grow that because we have enough tentacles. What you're asking the question is, what are some of the other owned assets that we have do? Well, when you're doing business with CBS, with something that you own, and then you go into a negotiation with a client, that you have so much business with that company, it gives you leverage. as opposed to not having leverage and therefore suing, you negotiate deals and you make your clients a lot of money. I guess there's two different approaches. Why clients hire agents is to make deals and make them a lot of money and create opportunity for them. And certain people decide that they just want to sue people and that's how they do it. I'm not sure that's the job they were hired for, but it is what it is.
--:-- Kara Swisher: So when you think about the agency business and how it's changed, would you look at something like UTA?
--:-- Ari Emanuel: No. Why? We don't need it. We don't need it. We don't need it just to grow that way. No. And I'll tell you the other thing. I think back in 08, when we were starting looking at the world differently, seeing where the world was going, starting with expanding our business with William Morris and strengthening our platform, and then adding Silver Lake and then going after things, and understanding that you want to be not only in the representation business but the ownership business. We have continued, as I said, growing the representation business in a significant way. It's not like we stood still. We don't stand still, as indicated by yesterday. So I would say to you, we're the largest agency. We feel very good about what we do for a living in that business. I think we're the best representatives in the business. And we're growing businesses where other parts of the entertainment ecosystem is growing, as you saw yesterday. But your business is UFC now. It's not representation. I would say to you is our representation business for the last 10 or 11 years, take 2020 out, has grown double digits every year for 10 years. It is a very significant part of our business. And it is the core feeder for how our business grows. And we pay a great deal of attention to it. Also, the business is, which gives us leverage at Disney and other places, the UFC, at CBS, it's bull riding. On location is an experience business that gives us across the globe where we see the experience economy going. And now gaming, which is a global business, as I said, the economics. So we're in where the landscape of entertainment is. and the original premise was content and gaming content movies and television and people that create content on TikTok We in every aspect of the entertainment ecosystem.
--:-- Kara Swisher: So what's the modern agent look like then in terms of that?
--:-- Ari Emanuel: Well, one of our businesses being an agent, I mean, our agents realize that you have to understand multiple ends of where the environment of entertainment is going. So because clients demand in the representation of actors, writers, directors, DPs, they demand more services. And so if we're in the photography business, we're in the modeling business, we're in the makeup, they also want licensing for their products. They want to own brands, not only do endorsements. Our agents understand now the whole landscape of what a client wants. And we have provided services throughout our business for that. That kind of begs the question, what do they need you for? Because without us, without us. I'm going to point to some others, like Hello Sunshine or LeBron James is doing. We represent LeBron James. Right. In certain areas of his life. In certain areas. But the thing that everyone's looking at and thinking about buying is the thing he's doing with Maverick Carter. How do you, can't you see that?
--:-- Kara Swisher: Well, I would say to you, not that we are in that deal, but Maverick Carter has called, especially when he's trying to raise money. He says we've raised a lot of money and help trying to help him with certain people that he's are looking at his business because we have relationships with them. And we have help because we're good partners throughout that process. So you see a trend of these things happening, these individual branded multi-revenue channel companies owned by celebrities themselves. Well. Whichever kind of. I would say the following. About two and a half years ago, we saw celebrities getting involved with brands, as we can all see, even though the advertising dollars are going up on linear channels, because where are they going to put their money that much? Brands were coming to celebrities to not only do endorsements, but also... Which was traditional. Right, which was traditional. Also kind of get equity in the brands and use their social channels. And we started a business called Talent Ventures. I remember. And at the time, we did about four to six deals. This was about three years ago. I think it's now up to 45 deals from Naomi Osaka doing sunscreen and to Ryan Reynolds doing aviation gin, Mark Wahlberg doing a tequila. At the beginning, it was a lot of liquor. It's now moved from all the way into fintech to skincare. I mean, it's all over the place. One of our biggest growing areas. And one of the reasons we get this is because how many places we're in, we understand all in our marketing business. We bring all the influence of our marketing business and all of our different relationships to bear to make sure our clients get full value and full exposure. Do you worry about a day where they don't need you?
--:-- Ari Emanuel: No. Why? Because I think we actually add value to their dreams and desires, whether that be creating a production company, whether that be producing, whether that be representing endorsements, whether that be doing speaking. In a whole host of areas, we have expertise and we're number one in those areas.
--:-- Kara Swisher: We'll be back with more from Ari Emanuel after the break.
--:-- Kara Swisher: Welcome back to this bonus episode of Pivot. Here's more of my conversation with Endeavor CEO Ari Emanuel at this year's Code Conference. All right, let's talk about your IPO. Yes. First failed attempt. Yes. That's the gray hair on this side. Okay, let me talk about it. You know, I don't think about things as success or failure. I think about things as learning experiences. Okay. Because I've never been in a situation where something quote unquote failed and I didn't gain something for it. That's the next time around I did better. Not always, but I keep on, I'm still curious. I keep on pushing forward. And so we got a lot of information. One is we needed all of the UFC. Two is we needed more clarity in our verticals. There was a lot of things that we didn't have and do right. So it took... You pulled it at the last minute. It took about... Yeah, we pulled it at the last minute because I think we got caught in the wake of WeWorks and some others. And I think the economy turned at the last minute. And so, but what then we did is we worked really hard for eight months, negotiated the rest of the UFC into the company and clarified our verticals, listening to what the street told us. Worked very hard with the guys from Morgan Stanley that were incredible, Brian Stern and team. And I think it was successful, has been successful. And as this last transaction, we're continuing to clarify what we do for a living to give people true insight into all the things we touch in the entertainment business.
--:-- Kara Swisher: Another question. A lot of your employees were upset when you took a massive stock trove. Can you talk about that $160 million? You and your partners. I get that people pull money out. Well, I mean, I think. With the delay, and then you went public. Right. Well, here's what I would say. You know, everybody has throughout the time, we have set up tranches for people to take money out. It was, I had not taken money out the company for 26 years. I went through a personal situation that I needed the money. So I didn't want to, but I also permitted other people to take money out that they got. And last time I checked, I did found the company. I did invest in the business and didn't take a salary. when the company, as people who have started companies, went through very tough times. I financed the company. I've paid people very well. It is what it is. It is what it is. Yep. Would you have done anything different in the IPO? In the current IPO? Yeah. I thought it went off pretty well. All right. So when we're talking about... Made me feel guilty that it didn't go off well. Well, too bad. Okay. That's all right. You weren't WeWork, at least, right? Yeah, true. Yeah, and now you can make a movie about them. So plans for future acquisitions? I know you just made this big bet. What areas are you super interested in? Well, we think of M&A in two ways, as I said, and I've said several times now. One of the ways is like when we went public, we bought in IMG Arena, which is our other gaming asset. We bought FlightScope, which is a video capturing business. And in our academy business in Florida, we bought NSCA, which is kind of like what I would say is the LinkedIn of high school sports. We always look at how we can create bigger moats around our existing businesses. And then the second tranche is are there on locations UFC things that will kind of completely transform the company and where we see the world going So on both of them, you know me, I'm pretty curious. On both of them, we are looking at the world and seeing things that maybe other people don't see. And we will use stock and cash to do that. What about growing things organically? Well, we have. I said to you, we did talent ventures. We grew Endeavor. Which one's more important? We have our content. We've done a lot of things organically, and they've been very successful. And so we do all three. So, yeah. So of all your businesses right now, which one is most important? I love all my children. I understand that. And I have four. Which one is your richest child who gives you the most back? I don't look at it that way. I mean, I truly, I don't actually. I mean, I think the company is in incredible shape, As I've said in our last earnings call, we raised our guidance and the company is doing incredibly well. You see, we all see, you know, I said to somebody who was having a conversation up in Silicon Valley, what's the TAM on content? Might be infinite, right? I just went over what the TAM is on gaming. I think we have one of the only global sports in the UFC. We represent 150 sports, and the sports rights marketplace is going through the roof on a global basis. I love all my children. All right. So none of them is particular. Let's talk about USC then. Okay. Very badly hit by the pandemic. Are you talking about the UFC? UFC, excuse me. I only lost one fight night. Okay. All right. So it wasn't badly hit. All right. That was written correct. All right. So you created Fight Island. Yes. You used the opportunity to create a new business. Well, no. I mean, it's the UFC. I mean, we did what we did. You know, Dana is one of the incredible partners. He is a driven, driven man. He said to me, we have to figure out how to— Explain who that is for me. Dana White runs the UFC, and he said, we have to get to an island. We have to create a place so I can bring the European fighters in. One of our investors is Mubala of Abu Dhabi. They have Yaz Island. We had a conversation. We created that spot. We've done, we'll do in October, we'll do our third fight there. And then actually interesting, right before the pandemic, we bought the building next to our facility in Las Vegas. And we had already built out, because if we didn't do that, we would have never been able to put on fights. We built out a whole facility there and we own the whole area. and that permitted us to kind of have two locations to do fights. And we then just created a, I don't know, 40-page document. And we were the first sport up with bull riding that enabled the sports to go on and a whole protocol, which took a long time and a lot of work, to how to get a sport back up and running with all the protections that you need. And we did it, I think, both teams, the PBR team and the UFC, did an incredible job. and it's an indication that we only lost one fight night. One fight night. During this whole time. At the same time, your UFC president, who you just discussed, said the entire world had, quote, turned into pussies overnight, which more sounds like you, honestly. You know, that is so not nice. I understand it, but you have to live with your reputation. Okay, thanks. I live with mine, so you're going to need to live with yours. So when he said that, what did you think about that? I let Dana be Dana. I don't always agree with him. Okay. So Dana is a guy that makes sure that he delivers on the promise we made to ESPN. And he drove the whole organization to get up on its feet and deliver those fights. And I think at the time, it was actually important because I think the globe wanted a sport back. And he made sure that he was going to deliver it. And we all got up and kind of followed his lead. So how has the pandemic? I got, you know, one of the things we're not going to be canceling people because of what they say during a period of time. And that was a very tough period of time. First once in a century period of time. Okay. Still was a really stupid thing to say. How has the pandemic affected business in general? When you think about it, not just that business, but the movie business. What's been the washout of it now as it moves to solution? Well, I think, you know, we've had a drive by Disney, now Warners with Discovery, Peacock launching there, I mean, Comcast launching there, Paramount launching, Paramount Plus, and Pluto. You saw the expansion with Netflix and everything else. I mean, you know, again, there's been a huge amount of content because you're all sitting at home. If you're specifically, which I don't want to interpret, but I'll ask, if you're specifically talking about the movie business. Overall entertainment, movie and television. Okay, so if we'll just take the movie business. Right. I don't, you know, people are saying theater business is dead. That's me. Okay, you're wrong. Okay, so here's my- I think it's going to be an adorable little thing. No, here's, so the movie business pre-pandemic was a nine plus billion dollar business. Will it be nine plus billion? I'm not here in the predicting business. I listened to your Jeffrey Katzenberg business. There's Sony, Paramount, Warner Brothers, Comcast, and Disney. I don't believe they're giving up $9 billion. And I think there's two things we have to realize. Do you cook at home? Yes. And you go out for dinner. Sure. Okay. So that will be the movie business. And so the other thing that I think is true about the movie business, and we just saw it in the list, Marvel movie that just came out, record numbers, record. For that movie. Hold on, hold on. Record numbers. Okay. The minute you and I are comfortable sharing an armrest, the movie business is back. In full form. People want more. If on location is an indication of people wanting to hang out with other people experiences, the movie business, based on that movie, and those are the movies that are coming out, will be back in full life. Will there be some movies that are right for direct-to-consumer? Yeah. Will there some movies be right day and date? Yeah. Even Netflix, and I'm in the middle of it with Adam McKay's movie and Leonardo DiCaprio, don't look up. there's going to be, I think it's 12 days. I'm not sure the exact 170 theaters. They're going to the theater business. So does the window change from 45 to 25, 17? I'm not sure. I'm not in the, I'm not going to be in the prediction, but the movie business is not going away. You and I are going to share an armchair. Never, never, never. Okay, so I'll share that with you anytime. All But that's not going away. On the television side, the linear business, cable and ABC and CBS, I think it's a $150 billion ecosystem between subs and advertising. They have to have that business. I think people still get to the Internet through AOL. They still use their Gmail accounts. Let's not be flyover people here. So the linear business will still exist. And the SVOD business will exist. Will it be the same that it is? No. But if you remember, there was a show that came out. The first show on Netflix came out while Game of Thrones came out. Same time. HBO had every week and Netflix. Arts. Right? You could have all 13 at once. Both did very, very well. Well, one might argue that the pandemic has been the biggest experiment for the Internet companies in moving people and accelerating trends that were happening. Restaurants are in trouble. Commerce is in trouble. You're not going to go to a restaurant again? I am, but I have to say, movie theaters, not so much. My son, absolutely. We're going to all come back here in about three, two years, a year and a half, and she'll have gone to three movies in a movie theater. Three, probably. I wrote a column today about it in the Times. I'm going to go to the Bond movie. Okay. I bet you only went to three when there wasn't COVID. No, not so. Oh, stop. No, not so. You're lying. Okay. Okay. So I think it's been a terrible consumer experience. They've been abusing. Oh, I'm not saying that it hasn't been, but I don't believe it is going away. That was the question. All right You want to not talk about moving to the experience as opposed to whether it going to exist Okay That a different conversation I think it going to be a little like say Broadway theater It an important thing but not the only thing that people have gotten used to streaming Has Broadway gone away? No. Okay, is it going away? But it's smaller. It's smaller. I said, is it a $9 billion business? No, it's probably a little bit less. Okay. All right. Let's talk about streaming, though. All these companies are now calling themselves streaming companies. Wall Street's rewarding them for this. You yourself said, we're going to make a lot of money in streaming. Well, I think the TAM on content is infinite. All right. What happens to the ecosystem if all the economics change? And what are the economics that you're most interested in? Here's the only thing I care about. Do my clients get to do what they want to do and get paid properly for it? Right. And let me just tell you something. They are like crazy numbers right now. As I said to you, the representation business right now is growing at double digits over the last 10 years. And just remember the following. We started out with the radio. You had the movie business. You had television. You had DVDs. You had cable. Technology has always come into the business, and talent has always been paid and been paid very well. And now you have six behemoths, right, with some smaller players like Roku and Paramount. And they all need, which they've all said, Ted talked about the South Korean. I have a different South Korean show that I like called My Mr., which is incredible. They all need more content. And there's a voracious appetite for more content. So from where I sit and where I sit in the ecosystem, my clients are doing really, really well and will continue to do really, really well. because when I started this business 26 years ago, there was four networks going to six, three or four cable channels, and a certain amount of people creating content. That distribution model has quadrupled and the same amount of people making content. The asset is the people that are making content and they are going to get paid and they're getting paid very, very well. And they're going to continue to get paid very, very well with all these guys, trillion, trillion. But how does the economics change? It's not backend, it's not- No, no, no. So what you're having started with Netflix. You know, probably if you had a slate of movies at Warner Brothers, 10% of them would hit a back end on the movie side. Right. It's a small amount. Right. Now they're paying each one of those 12 movies as if they've all hit back ends. And we saw it with Warner's, as Jason was here. He paid out $200 million in back ends. Right? Not every movie would have made that. So instead of making 10%, the clients, all the clients, it's at 100%. And that's through Netflix is doing that. Apple's doing that. Amazon's doing that. Disney's doing that, Warners is doing that, then Peacock will do that. So it's a very, it's great time. So it's good for art. Yeah, yeah. So when- No, it's good for my clients. We'll be back in a moment. Stay tuned.
--:-- Kara Swisher: Welcome back to this bonus episode of Pivot. Here's more of my conversation with Endeavor CEO Ari Emanuel at this year's Code Conference. All right, let's talk about streaming, though. All these companies are now calling themselves streaming companies. Wall Street's rewarding them for this. You yourself said, we're going to make a lot of money in streaming. Well, I think the TAM on content is infinite. All right. What happens to the ecosystem if all the economics change? And what are the economics that you're most interested in? Here's the only thing I care about. Do my clients get to do what they want to do and get paid properly for it? Right. And let me just tell you something. They are like crazy numbers right now. As I said to you, the representation business right now is growing at double digits over the last 10 years. And just remember the following. We started out with the radio. You had the movie business. You had television. You had DVDs. You had cable. Technology has always come into the business, and talent has always been paid and been paid very well. And now you have six behemoths, right, with some smaller players like Roku and Paramount. And they all need, which they've all said, Ted talked about the South Korean. I have a different South Korean show that I like called My Mr., which is incredible. They all need more content. And there's a voracious appetite for more content. So from where I sit and where I sit in the ecosystem, my clients are doing really, really well and will continue to do really, really well. because when I started this business 26 years ago, there was four networks going to six, three or four cable channels, and a certain amount of people creating content. That distribution model has quadrupled and the same amount of people making content. The asset is the people that are making content and they are going to get paid and they're getting paid very, very well. And they're going to continue to get paid very, very well with all these guys, trillion, trillion. But how does the economics change? It's not backend, it's not- No, no, no. So what you're having started with Netflix. You know, probably if you had a slate of movies at Warner Brothers, 10% of them would hit a back end on the movie side. Right. It's a small amount. Right. Now they're paying each one of those 12 movies as if they've all hit back ends. And we saw it with Warner's, as Jason was here. He paid out $200 million in back ends. Right? Not every movie would have made that. So instead of making 10%, the clients, all the clients, it's at 100%. And that's through Netflix is doing that. Apple's doing that. Amazon's doing that. Disney's doing that, Warners is doing that, then Peacock will do that. So it's a very, it's great time. So it's good for art. Yeah, yeah. So when- No, it's good for my clients. We'll be back in a moment. Stay tuned.
--:-- Kara Swisher: Welcome back to this bonus episode of Pivot. Here's more of my conversation with Endeavor CEO Ari Emanuel at this year's Code Conference. All right, let's talk about streaming, though. All these companies are now calling themselves streaming companies. Wall Street's rewarding them for this. You yourself said, we're going to make a lot of money in streaming. Well, I think the TAM on content is infinite. All right. What happens to the ecosystem if all the economics change? And what are the economics that you're most interested in? Here's the only thing I care about. Do my clients get to do what they want to do and get paid properly for it? Right. And let me just tell you something. They are like crazy numbers right now. As I said to you, the representation business right now is growing at double digits over the last 10 years. And just remember the following. We started out with the radio. You had the movie business. You had television. You had DVDs. You had cable. Technology has always come into the business, and talent has always been paid and been paid very well. And now you have six behemoths, right, with some smaller players like Roku and Paramount. And they all need, which they've all said, Ted talked about the South Korean. I have a different South Korean show that I like called My Mr., which is incredible. They all need more content. And there's a voracious appetite for more content. So from where I sit and where I sit in the ecosystem, my clients are doing really, really well and will continue to do really, really well. because when I started this business 26 years ago, there was four networks going to six, three or four cable channels, and a certain amount of people creating content. That distribution model has quadrupled and the same amount of people making content. The asset is the people that are making content and they are going to get paid and they're getting paid very, very well. And they're going to continue to get paid very, very well with all these guys, trillion, trillion. But how does the economics change? It's not backend, it's not- No, no, no. So what you're having started with Netflix. You know, probably if you had a slate of movies at Warner Brothers, 10% of them would hit a back end on the movie side. Right. It's a small amount. Right. Now they're paying each one of those 12 movies as if they've all hit back ends. And we saw it with Warner's, as Jason was here. He paid out $200 million in back ends. Right? Not every movie would have made that. So instead of making 10%, the clients, all the clients, it's at 100%. And that's through Netflix is doing that. Apple's doing that. Amazon's doing that. Disney's doing that, Warners is doing that, then Peacock will do that. So it's a very, it's great time. So it's good for art. Yeah, yeah. So when- No, it's good for my clients. We'll be back in a moment. Stay tuned.
--:-- Kara Swisher: Welcome back to this bonus episode of Pivot. Here's more of my conversation with Endeavor CEO Ari Emanuel at this year's Code Conference. All right, let's talk about streaming, though. All these companies are now calling themselves streaming companies. Wall Street's rewarding them for this. You yourself said, we're going to make a lot of money in streaming. Well, I think the TAM on content is infinite. All right. What happens to the ecosystem if all the economics change? And what are the economics that you're most interested in? Here's the only thing I care about. Do my clients get to do what they want to do and get paid properly for it? Right. And let me just tell you something. They are like crazy numbers right now. As I said to you, the representation business right now is growing at double digits over the last 10 years. And just remember the following. We started out with the radio. You had the movie business. You had television. You had DVDs. You had cable. Technology has always come into the business, and talent has always been paid and been paid very well. And now you have six behemoths, right, with some smaller players like Roku and Paramount. And they all need, which they've all said, Ted talked about the South Korean. I have a different South Korean show that I like called My Mr., which is incredible. They all need more content. And there's a voracious appetite for more content. So from where I sit and where I sit in the ecosystem, my clients are doing really, really well and will continue to do really, really well. because when I started this business 26 years ago, there was four networks going to six, three or four cable channels, and a certain amount of people creating content. That distribution model has quadrupled and the same amount of people making content. The asset is the people that are making content and they are going to get paid
