WME-IMG's recent acquisition of the UFC represents a "new and even more audacious strategic strike that aims to challenge the core assumptions of the entertainment industry," according to a deep profile of the company by Nicole Laporte of FAST COMPANY. Instead of "just helping others create projects," WME-IMG co-CEOs Ari Emanuel and Patrick Whitesell have "made a major, multibillion-dollar leap into owning content themselves." Whitesell "believes that the collection of assets that he and Emanuel now control give them the best possible tools to navigate every shift roiling their industry." WME-IMG not only represents "Hollywood luminaries ... but also sports stars, fashion designers and models, and chefs." As such, the company "sees potential in using IMG’s business selling media rights to events such as Wimbledon and Chinese soccer to sell TV shows around the world without having to go to a studio to do it for them." WME-IMG's portfolio -- which includes several fashion weeks and art fairs across the globe, the PBR, UFC and ELeague, an e-sports league via a joint venture with Turner Broadcasting -- gives it a "stake in the booming live-event business." Everything "holds appeal for major brands looking to reach customers in new ways." Laporte notes those pieces "may seem eclectic and even random," but to Whitesell and Emanuel, "there’s a unifying theme: They all can be entertainment." Whitesell: "They all have that connective tissue." The PBR and UFC "might seem a world away from controlling, say, Pixar, Marvel, and Lucasfilm." However, it is the "textbook definition of disruption to start with something people consider to be folly and work your way up." While not "every part of WME-IMG’s burgeoning empire is successful, growth is under way." Sources said WME-IMG could go public next year, and that would mean all the moves "will have added up." Emanuel: "Now 50% of our business we own, and it’s ours to lose. We can only f--- it up. We can no longer say, ‘The client didn’t do that. The buyer didn’t do that.’ It’s ours. We either win, or we lose." Laporte reports a name change for the agency is "in the works."
USING ITS RESOURCES: WME-IMG is "actively looking for how it can create more mashups across its business." The company last year arranged for country music singer Brad Paisley, a client, to "tour colleges that it sells sports rights for, performing concerts during football weekends to enhance the experience and introduce the singer to a younger audience." The PBR Built Ford Tough series in Nashville this past August included a concert by fellow client Steven Tyler. That event also "featured a screening of the Netflix rodeo documentary series 'Fearless,' which was packaged by WME and features PBR riders." Whitesell: "We’re just scratching the surface of what a weekend around an [event] can be. And we have everything: music, fashion, celebrities, food."
ADDING VALUE: One of WME-IMG's "ripe possibilities came with UFC, which owns Fight Pass, the Netflix of MMA fighting." When the company acquired UFC, the $9.99-a-month network had "just 450,000 subscribers." WWE, by contrast, "has almost 2 million" subscribers for its OTT network. But WME-IMG "represents the WWE, and it has tapped its content-strategy team to improve Fight Pass’s programming." By expanding Fight Pass, they "add direct value." If the streaming service "accrues as many subscribers" as WWE Network, that would result in $240M in annual revenue. An expanded Fight Pass "also gives WME-IMG more leverage with broadcasters when it renegotiates UFC’s TV rights." UFC’s U.S. TV deal currently averages $115M "annually from Fox Sports." UFC has "reportedly told investors that it could quadruple when the next contract begins" in '19 (FAST COMPANY, 12/ '16 issue).
