Endeavor CEO Ari Emanuel, who has long supported the benefits of the streaming boom, said he’s “not nervous” that Warner Bros Discovery might be putting on the brakes as it looks to compete with Netflix and Disney.
Discovery CEO David Zaslav, as Emanuel recalled during Endeavor’s fourth-quarter earnings report, recently said the company doesn’t want to “win the spending war” in streaming. That line, underlined by Discovery CFO Gunnar Wiedenfels this week at an investor conference, drew a lot of positive feedback from those on Wall Street who see streaming as an extremely expensive and risky business.
“I don’t get too nervous if he says he doesn’t want to spend,” Emanuel said of his friend Zaslav. “Everyone else spends. And look again, there are seven or eight players in the market.”
While Endeavor is known for owning WME, its portfolio is diversified, including sports, events, technology, and other areas. However, Emanuel, a former longtime agent, was not shy about characterizing streaming as a big tailwind for the company.
The CEO noted that total programming spending across all platforms will reach $140 billion this year, in large part due to the promotion of streaming. “[Zaslav] and I joke about how much money he would have to spend on me to compete,” he said. Despite any public promises of austerity, Emanuel insisted, “I don’t believe any of them aren’t spending money on content.”
Listing the key players – Amazon, Apple, Netflix, Discovery, Warner, Peacock, Roku, Disney, Hulu – Emanuel continued: “If one of them drops out or falls a little, it doesn’t affect us much. As I said, we are platform agnostic.”
The film business, he added, had only three active buyers during the pandemic. Today, “you now have a strong theatrical business.”
Emanuel has often talked about streaming, which eliminates the need for big contributors to make money once a movie hits a certain income threshold. In streaming, payments are made upfront on a cost-plus model that assumes the entire commercial life of the film, assuming each release is successful to some degree. This led one analyst to question whether the positive impact on Endeavor’s financials from streaming growth could be considered a “pull forward” — a business term for the benefits of moving forward into the current period, creating an artificial leap.
“There was no breakthrough,” Emanuel argued.
In the fourth quarter, Endeavor posted a net loss but higher-than-expected revenue with a major return to the representative unit following the 2020 Covid crisis.