Mark Shapiro, Endeavour’s President and COO, said the final resolution of the WGA strike will improve the company’s representation business.
“This is a growth opportunity for us,” Shapiro said while appearing at a media conference for Wall Street firm JP Morgan. “Once this is resolved, the authors will do better no matter how some of these issues are resolved. That’s just a fact. They don’t come back for lower or equal offers. You will do better economically. And since they are better off economically, it has an impact on the ecosystem. And then we, as the market leader in this space, WME, will take our fair share of this ecosystem.”
Shapiro also reiterated points made by Endeavor executives recently about the company’s diversification into fashion, digital, sports and other areas. According to the company, TV and film make up about half of the agency’s core revenue.
Endeavor is “in good shape,” Shapiro claimed, despite the current production shutdowns during the fourth week of the WGA stalemate and the near-expiring contracts for DGA and SAG-AFTRA. Compared to 2022, “our back ends are up significantly,” he said, with revenue from leftover inventory “curbing the trend.” Ultimately, Shapiro continued, the strike was “temporary”. That’s it. Is it two months? Is it three months? I don’t know. Will the debt ceiling be set before the deadline? These are negotiations that are happening and both sides are really tough and there are significant issues, but they are temporary.”
Recent cuts by media companies grappling with an advertising slowdown and a sluggish economy have compounded the perceived impact of the labor dispute, but Shapiro forecast a recovery. The strike “coincidentally comes at a time when content is shrinking. So when they’ve settled their case, the streaming gets going, and the content is coming back the other way, it’s going to come back in abundance,” he said. “The development is still ongoing and the demand for premium content will never decrease.”
Shapiro, who was an ESPN executive for a long time before joining Endeavor, also commented on ESPN’s sports rights, cable cutting and its consideration of a more comprehensive direct-to-consumer streaming offering. He said cable cuts will “normalize” at around 2% a year, meaning the pay-TV package will remain at 50 to 60 million homes for years to come.
“As the package erodes and you have to get more customers into streaming, where you have to charge higher prices, making it harder to make acquisitions, you’re going to need premium content,” he said. “There’s no getting around it.” That means there’s still a seller’s market when it comes to sports rights, Shapiro said. As evidence, he cited NBCUniversal’s decision to spend $110 million for exclusive rights to an upcoming NFL playoff game to be streamed on Peacock.
Returning to his alma mater, he said, “If ESPN+ wants to go from 25 million subscribers to 50 million and want to charge more than $9.99 a month, it’s not going to be tertiary or secondary content that will make the difference.” It will be the big ones.”
Of course, Shapiro acknowledged a bias in the analysis. Endeavor took full control of the UFC two years ago and has announced plans to merge the mixed martial arts field with WWE into a new entity in the coming months. As for the UFC’s rights prospects, he said that having a single media partner, Disney, has worked well so far. WWE and others have found it productive to merge partners and split rights across multiple media and streaming companies. “Different shots for different shots,” Shapiro shrugged.