PRO Tip Sheet: 5 Insights From This Week

This week we reported on the critical timing for the actors strike, ESPN’s financial situation, and talk of Endeavor selling assets and going private [5 Insights From WrapPRO]( The actors strike saga continued, as SAG-AFTRA contract talks with the studios entered the critical final weeks before the holidays. We delved into the writer’s guild’s difficult debate over whether to denounce the Hamas attack on Israel, analyzed ESPN’s challenging financial situation, looked at the unveiling of Apple’s theatrical movie plan with “Killers of the Flower Moon” and dove into Endeavor’s talk of selling assets and possibly taking the company private. [Read More on WrapPRO]( 1. [What’s Behind Endeavor’s Talk of Going Private, Selling Assets]( By Manfredi | Source: [WrapPRO]( - Endeavor Group Holdings, including entities like William Morris Endeavor, UFC, and WWE, is considering "strategic alternatives," possibly including selling parts or going private, with Silver Lake expressing interest in taking the company private. - Despite going public in 2021, Endeavor is deemed significantly undervalued at a market cap of $10.6 billion, potentially attributed to a lack of clear brand identity and challenges in communicating its value and synergies. - Endeavor faces challenges in a tough entertainment landscape, with actor and writer strikes impacting shares and a 19% stock price decline since going public in April 2021. - Analysts highlight the disconnect between public market valuation and the perceived value of Endeavor's assets, emphasizing the need for better communication and key performance indicators (KPIs) in forecasting diverse sports/entertainment holdings. - Endeavor's strategic review may lead to the sale of assets, and its potential privatization could provide flexibility and long-term focus, but challenges include finding financing for the deal and addressing the $5 billion debt load. [Keep Reading]( 2. [SAG-AFTRA Contract Talks Enter Their Critical Third Act]( By Jeremy Fuster | Source: [WrapPRO]( - Talks between Hollywood studios and SAG-AFTRA have restarted after a two-week hiatus, crucial for avoiding further damage to 2024 production schedules and award campaigns. - The strike's impact is evident with Paramount's "Mission: Impossible 8" postponed to May 2025, and other tentpole films like "Deadpool 3" facing challenges to meet their 2024 release dates. - Films scheduled for November and December releases require actors for promotional work, while the TV industry may struggle to salvage the 2023-24 season without a deal by early November. - The crux of negotiations revolves around streaming compensation, with the studios proposing a viewership bonus structure, similar to the Writers Guild, but facing resistance from SAG-AFTRA seeking broader changes to address actors' evolving roles in the streaming era. - SAG-AFTRA prioritizes a deal addressing financial instability for actors and protection against AI use. The guild seeks a contract reflecting the streaming-centric industry and pushes for changes beyond the proposed bonus structure, emphasizing the need for an updated agreement in line with the current entertainment business model. [Keep Reading]( 3. [ESPN Is a Disney Crown Jewel, but Its Financials Signal an Urgent Need for Direct to Consumer Pivot]( By Lucas Manfredi | Source: [WrapPRO]( - Disney's recent disclosure that ESPN generated $17.3 billion in revenue last year, constituting 21% of the company's total, underscores the sports network's vital role within the entertainment giant. - Despite ESPN's significant revenue, the loss of 19% of pay-TV subscribers since 2018 and escalating sports rights costs, reaching $9 billion in 2023, highlight the pressing need for Disney to aggressively shift ESPN towards a direct-to-consumer model. - Disney's sports division, including ESPN, ESPN+, and Star India, generated $2.7 billion operating profit and $17.3 billion revenue in fiscal year 2022. ESPN's operating profit declined from $2.9 billion in 2022 to $1.89 billion in the first nine months of 2023. - ESPN's standalone financial challenges have sparked considerations for strategic partnerships, with potential partners ranging from sports leagues to tech giants like Apple and Amazon, though the prospect of an Apple acquisition is met with skepticism. - ESPN faces challenges from cord-cutting trends and escalating sports-rights costs. Analysts anticipate difficulties in growing ESPN but note its stable base, especially with rising engagement levels, while strategic decisions on sports rights, cost cuts, and potential partnerships will shape its future trajectory. [Keep Reading]( 4.[‘Killers of the Flower Moon’ $23 Million Opening Kicks Off Apple’s Movie Master Plan]( By Jeremy Fuster | Source: [WrapPRO]( - Apple, partnering with legacy studios and renowned filmmakers like Ridley Scott and Matthew Vaughn, plans a theatrical release for its films, diverging from the typical streaming model, exemplified by the success of "Killers of the Flower Moon." - Apple, with substantial cash flow from non-media divisions, can afford big-budget productions and full theatrical runs, challenging the traditional box office norms and using the theatrical release as a robust marketing campaign for streaming. - Apple's approach mirrors Netflix's curtailed theatrical runs but contrasts with Amazon Studios, emphasizing a full theatrical release to increase interest in streaming, indicating shifts in how tech giants leverage their content. - Filmmakers like Scorsese and Scott, supporting the theatrical experience, find value in Apple's strategy, aiming to balance a successful theatrical run with streaming releases to enhance audience engagement. - Apple's willingness to invest in theatrical releases for original, non-franchise films may reshape the filmmaking landscape, providing a new avenue for wide-release films and potentially impacting how other streaming platforms approach theatrical partnerships. [Keep Reading]( 5. [Inside the Writers Guild’s Tortured Debate Over Denouncing Hamas Violence in Israel]( By Sharon Waxman | Source: [WrapPRO]( - The WGA faced internal discord over whether to denounce Hamas's recent terrorist attack on Israel, resulting in the president, Meredith Stiehm, acknowledging the inability to reach a consensus on the matter. - Prominent members, including Howard Gordon and Joel Fields, expressed frustration over the guild's decision not to make a formal declaration denouncing the massacre by Hamas, which other Hollywood guilds and major companies had done. - About 75 guild members held a Zoom meeting to discuss their frustrations, and some members found it incomprehensible that the board couldn't make a clear denunciation, with criticism directed at what was perceived as a lack of moral stance. - The difficulty arose from differing views among guild members, reflecting a broader progressive left sentiment, with some sympathizing primarily with the Palestinian plight and opposing any support for Israel. - An open letter, signed by 267 members of WGA, SAG-AFTRA, and the DGA, accused "high profile members" of the WGA of pressuring statements supporting Israel and highlighted the need to tread carefully when endorsing government actions accused of human rights violations. [Keep Reading]( With a focus on delivering actionable intelligence, the PRO Tip Sheet empowers readers to stay ahead of the game in the industry. Want to go deeper? [Explore WrapPRO today](. [Go to WrapPRO Members Hub]( TheWrap | 2034 Armacost Ave Los Angeles, CA 90025 [Unsubscribe](