Tencent Forms China Venture With Hollywood Talent Agency WMEby
WME IMG already represents athletes, manages events in China
Sequoia Capital is leading the investment in new venture
Tencent Holdings Ltd., Asia’s biggest Internet company, is forming a joint venture with the Hollywood superagency William Morris Endeavor and Sequoia Capital to develop sports and entertainment businesses in China.
Sequoia Capital China, the private-equity company, is leading the investment, which is being joined by Tencent and FountainVest Partners, a China-focused investment firm, according to a statement Thursday. Financial terms weren’t revealed.
The investment will allow WME-IMG, the parent of William Morris Endeavor and the owner of media properties including the Miami Open tennis tournament, to accelerate its growth in China. The company already has a presence in the market, representing athletes including Li Na and managing events such as the World Golf Championships-HSBC Champions tournament.
“With the incredible growth they have been experiencing domestically, we saw this as a perfect opportunity to help them replicate that success in China within both sports and entertainment,” Neil Shen, founding and managing partner of Sequoia Capital China, said in a statement.
Click here to read about Walt Disney’s plans to make Disney-branded movies in China.
Increasing the company’s presence outside the U.S. has been a priority for co-Chief Executive Officers Ari Emanuel and Patrick Whitesell since they acquired IMG for $2.4 billion in 2014. With that deal, Emanuel and Whitesell moved from leading a large talent agency for movie stars, directors and musicians into global sports and media businesses with interests in college sports marketing, media rights and fashion events.
WME-IMG has since acquired 15 companies, including Professional Bull Riders Inc. and the stylist and make-up artist agency the Wall Group, and formed a joint venture with Time Warner Inc.’s Turner Broadcasting in e-sports. The company can sell advertising and make TV deals for many of those businesses through IMG, which has offices in more than 30 countries.
To fund its ambitions, WME-IMG has continued to raise money, including $55 million from Fidelity Management & Research Co. in April and $250 million from SoftBank Group Corp. in March.
China has become a focus for Hollywood in recent years given its burgeoning middle class and appetite for entertainment. The country is the second-biggest market for movies in the world, following the U.S., and many analysts project it will become No. 1 in the next few years.
Walt Disney Co. plans to make Disney-branded movies in China, Chief Executive Officer Bob Iger said in an interview Thursday with Bloomberg TV.
Chinese companies are also investing in U.S. entertainment. Dalian Wanda Group Co., owner of AMC Entertainment Holdings Inc., the second-largest theater chain in the U.S., acquired Hollywood filmmaker Legendary Entertainment, the producer of “Pacific Rim” and “The Hangover,” in January for as much as $3.5 billion.
Creative Artists Agency, WME’s largest rival in Hollywood, has an office in Beijing, and in January joined with iRENA International on a hospitality and event management venture in the country.