HIGHLIGHTS: Ariel Emanuel - CEO of TKO Group Holdings

0:00Hi, everybody. Tune in to this short version of the podcast, which we do every Friday. For the long version, tune in on Wednesdays. hi everyone i'm nicolaj tangen the ceo of the norwegian sovereign wealth fund and today i'm in really good company with super agent and media mogul ariel emmanuel he's represented some of the biggest names in hollywood and he's now the owner of companies such as ufc and wwe ari warm welcome hi how are you doing so how long has this been since you started doing this and why it's like three years you think it's going to be an interview you to me i'm going to interview you Let's see how it goes.

0:35So, Ari, when I was researching this, I was just astonished about how many things you do. So just in brief, what do you do? You know, I started out almost over 30 years ago representing writers, writer, director, actors. Then had a vision for where entertainment was going. started, you know, merged, quote unquote, with William Morris, and then bought IMG, and then realized half my life was representation, half my life was ownership. Almost like, I mean, I don't know what you're, I know that you're one of the largest investors in the world of every single country and every single company. But we realized when we were in the representation business of entertainment and entertainment call takes from podcasts to owning sports, events, music, writer, direct, everything.

1:34We could look at companies that we represented or people or things, and then we could move them, the thought process to an ownership position because we could extract greater value because we were global. And if, if a company was localized, but had a global possibility, we could extract a great deal of value. And as we're negotiating deals between IMG, negotiating all sports rights on an international basis, we added content to that, and then we sold that business for a billion dollars. We had a very big playing field. So, Ari, we're going to kind of unpack one thing after the other here, but let's go from the beginning with the endeavor.

2:13So you started in a creative artist agency, and how did you get the job? I gather you cold-called them quite a lot of times. Way, way, way before that, I started in New York with a kind of guy in the theater business by the name of Robbie Lance. After six months, I realized kind of the business. I had just moved back from Europe where I had been playing around. My father told me to come back. He was cutting off my bank account. And I went into the mailroom and I was making 15 cents a mile. That's how I made my living, dropping in the mailroom. dropping packages off, became an agent. And then I went to this company, Inner Talent, which was a small boutique that had started as a spinoff of some of the big guys.

2:58After three years, I think it was, they sold, they broke the company up. And I went to this company called ICM, which recently CA bought. And a crazy thing happened. I got hit by a car and I realized life was not a dress rehearsal. You can't just sit around and think it's going to figure itself out. So I just, after 18 months of surgery, rehab, surgery, I said, I want to be on my own and go for it. And so we started this company called Endeavor in 1995 on my birthday, March 29th. Who was your first client? It's between Amy Lipman. I think it was Amy Lipman and Greg Daniels. and then there was a bunch of others.

3:44Why did they choose you?

3:49I don't think they wanted me to keep on calling them to beat them up to sign with me, so they just gave in.

3:58You once said that agents are like cockroaches. What do you mean by that? Meaning you can't kill us. We're going to be around in this business forever. as much as people have tried to disintermediate agents. When I think I started in the business, we were just in the television business and a little bit of motion picture business. Now we're in Instagram people, podcasts. We're in so many different areas. And the agency business has constantly adapted and kind of transformed itself in what is required to be a good agent and representation. You got to have marketing in there. You got to have books in there.

4:40You got to have license and merchandising in there. And, you know, you just constantly are adapting your skill set, the agency at large, to actually perform the best for the clients. And I don't think a lot of agencies have done that. That's why they haven't survived. We have done that. And I think that's why we're thriving. Many would have seen the series Andrew Rush, which is loosely based on you, I believe. How spot on is that? In my early days, it was, I'm sad to say, too spot on. But I've mellowed. So, yeah, I mean, in the early days of, remember, when I started the business, you had four, no you had yeah you had four big agencies against us and you you weren't you there was no price differential that could distinguish you it was all the same price so you know i was um difficult well yeah i'm a lot i'm a lot nicer now you have a lot of different people in this process with different voices why is that important i i think it's important for leadership that if you are a good leader.

5:53One is you want a lot of voices inside the mix to come to the right conclusion and not make a decision that your opinion is the right opinion. So there are many executives that we sit around constantly going back and forth about deals, you know, what we can ask for, what we shouldn't ask for, places we should be growing the business. We have calls every week on the UFC, calls every week on the WWE, Jiu-Jitsu, bull riding. And I think that's, you know, important for leadership to get to the right conclusion. You always know you're going to make mistakes, but you want everybody that is running the operations for your company at every level to have a voice in it so that when the mistakes come, we can at least mitigate them a little bit and then have a path forward.

6:51And you constantly have to be reviewing this stuff as you, as, as you, as you operate your business. I don't know how other people do it. Running a sport is like anything else, but we have the added

7:09situation that you're on the WWE, they're employed, you know, their signed contracts on the, on the UFC, their independent contractors. That's why it's very difficult for a media company like a Disney, a Comcast, a Warner brothers and Netflix to own a sport. I think they would hurt the operate because it's, it's a very kind of fluid situation. Um, and that's why you need a lot of voices in that can tell you all the different things going on. because it's not only how you run the business, it's how your superstars and athletes are thinking about it. And that's a very dynamic situation to kind of constantly be reviewing as you're trying to run the business.

7:51What type of leadership does it take to run this type of fluid situation? A democratic dictatorship. And that's what you have? Well, we have multiple leaders in the democratic dictatorship. Yeah. On the, you know, Triple H runs WWE with Nick Khan. Dana runs, you know, kind of making the fights and everything, UFC. Mark and I run the business side of it with multiple people underneath us. And then there's that coordination between, you know, the people that are creating the storylines, creating the fights, and us about where we're going with it. Moving on to a different type of entertainment. You recently bought the Freeze Art Fair.

8:39Right. That's a new business. I started. Less violent. Well, here's what I concluded. So we took Endeavor Private. We spun UFC and PBR and On Location and IMG into TKO. Silver Lake, as we took Endeavor Private, they wanted it to just be a pure play representation business. we had bought over time about 700 different events i have a thesis that um you know we're down to four day work weeks maybe three day work weeks europe you know um with ai and a bunch of other stuff covid started it and so if that's the case there's going to be more free time than ever we're social animals human beings and they're either going to go to a sporting event you're going to get a dinner.

9:31You're going to watch entertainment. You're going to live music. And I also think you're going to do live events. So we've acquired the tennis business, the participatory sports in collectibles, Frees and Barrett Jackson, our food festivals, a bunch of assets. And we've raised money, about$2 billion in equity. And we've bought these assets and we're going to hopefully create like live nation is in music. We're going to create a mini version because they're a great company, but in live events, a global live events business as this world kind of transforms itself with AI and freezes apart of that and freezes apart.

10:22And I think live is more important than it's ever been. And that's the marketplace that we're going to try and go capture. Choose.