Endeavor Q2 Results Report – The Hollywood Reporter

In its second quarterly earnings report since its release in April, Endeavor reported revenue of $ 1.1 billion, narrowly missing Wall Street’s revenue expectations. Endeavor CEO Jason Lublin said three Endeavor Content shows were postponed to the third quarter and were responsible for some $ 90 million in revenue. And while the company made a modest profit in the first quarter, it recorded a net loss of $ 319 million in the second quarter.

Significantly, despite the Delta variant of COVID-19 causing uncertainty in some of Endeavor’s key areas (live events, sports, and TV and film production), the company says it is raising its forecast for the year to $ 4.80 billion to $ 4.85 billion, up from $ 4.76 billion to $ 4.83 billion.

Endeavor’s various lines of business continue to be affected by the pandemic, to varying degrees. The Delta variant, which has caused an increase in the number of cases and forced states and localities to issue new warrants for masks and vaccines, has only further darkened the situation in the short to medium term.

“We’ve had a few cancellations here and there, but overall we’re not too badly affected,” Endeavor chairman Mark Shapiro told The Hollywood Reporter on Monday. “The pent-up demand is electric right now. Consumers are going out in droves and spending more because they have the money. There is so much discretionary income right now. Don’t get me wrong, there are cancellations like the jazz festival in New Orleans, where we had artists performing, but then Lollapalooza in Chicago, where we also had artists performing, was bigger than foreseen. People want to go out. “

While its cash cow, the UFC, has continued to host live events in full arenas, the Delta variant and new mandates make it harder to predict future live events. Yet it was the success of the UFC and the gradual return of other events that spurred the shift in focus, as well as new opportunities sparked by the NCAA’s decision to allow student athletes to make deals. of name, image and likeness (NIL), which opens a new line of activity for the company.

“Talk about parting the Red Sea here, this space is wide open”, says Shapiro THR. “All of a sudden, we can get these college players to sign advertising and sponsorship deals. And if we do the right thing, at the end of the day, we sign them on the road for their contracts on the ground. The heavens opened over it.

Still, the company believes content will be its main center of growth with the remaining company, as CEO Ari Emanuel said on Monday’s earnings call, “platform agnostic.”

“Whether it’s Discovery and Warner Bros. or Amazon and MGM, they’re becoming great competitors like Netflix and Disney,” Emanuel said. “The competition for content and talent is at its highest level that I have seen in 26 years.”

The company had made a modest profit in the first quarter, mainly thanks to the UFC. Mixed martial arts outfit was Endeavor’s cash cow again in the second quarter, with the owned sports segment (which also includes Professional Bull Riders) up 70% year on year to 258.9 millions of dollars.

Likewise, as production of film and television projects has reached pre-pandemic levels, agencies like WME are grappling with a new streaming economy, which has been accelerated by the pandemic. These disputes, which largely took place behind closed doors, have come to public scrutiny in recent weeks after Black Widow Star Scarlett Johansson has sued The Walt Disney Co. over the decision to release the Marvel movie on Disney + Premier Access on the same day it hits theaters.

Shortly after, Cruel Star Emma Stone (who is being replaced by WME) has revealed a deal to star in a sequel to the film, which also debuted in Premier Access.

When calling for results, Shapiro noted the lawsuit and the agreement with Stone, adding that “we are getting the front-end for their clients for our clients for movies and TV, as we always get, more and more. plus, we buy the backend… the Netflix Model.

However, he also previewed the next fight for talent representation: the lifetime value of a streaming subscriber. Shapiro was used to the Disney example Jungle cruise, which debuted in theaters and on Disney + Premier Access on the same day. “Yes, that goes into the box office calculations in terms of the number of people paying for Jungle cruise, but if we have actors and actresses pushing you to subscribe, where’s their part of that? he said.

The company’s entertainment business also grew 70% year-on-year to $ 328.2 million, while its live events and experiences division saw revenue increase by more than $ 400 million. to $ 528.7 million.

Emanuel said talent bookings were up double digits from the same quarter in 2019, which was pre-COVID.