Ari Emanuel's Milestone Frieze Acquisition, Explained
Emanuel, the former chief executive and co-founder of Endeavor, said in a statement that Frieze 'represents a strategic cornerstone' in his as-yet-unnamed firm, backed by asset managers Apollo Global Management and RedBird Capital Partners. Although the terms of the transaction were undisclosed, the deal values Frieze at nearly $200 million, according to a report in the Financial Times citing sources with direct knowledge of the matter.
The question now becomes: what does the acquisition mean for Frieze, Emanuel's new venture and the future of the art business against the backdrop of a struggling market and an uncertain global economy? BoF deciphers the deal and its ripple effects.
Why is Endeavor selling Frieze?
The move is an offshoot of a much bigger transaction. Endeavor agreed to be acquired in a take-private deal with the private equity colossus Silver Lake Management in March 2024. That pact, which closed less than two months ago, placed a $25 billion total enterprise valuation on Endeavor and its holdings, making it the largest such transaction ever completed in the media and entertainment sector, according to the parties involved.
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Yet not every asset in Endeavor's portfolio fit Silver Lake's plans. Endeavor announced in October 2024 that it was exploring a potential sale of select properties from its live events holdings, including Frieze and the Miami Open and Madrid Open tennis tournaments.
This is not to say that Silver Lake wanted Endeavor completely out of the live-events sector. One of the latter's most tantalising assets was its controlling stake in TKO Group Holdings, Inc, the publicly traded sports and entertainment company built around the Ultimate Fighting Championship and World Wrestling Entertainment. The success of those events has translated to a $32.3 billion market cap for TKO, of which Silver Lake (via Endeavor) owns 51 percent.
Still, if the UFC and WWE are the templates for the types of live events Silver Lake believes will continue to drive returns, it's obvious why a pair of tennis tournaments, let alone an art fair and media brand, might be considered expendable.
Does the deal align with industry expectations?
The acquisition has already surprised industry insiders in two ways, even considering how little is currently known of the terms.
A Frieze spokesperson confirmed to BoF that the sale to Emanuel's company only involves Frieze, encompassing the brand's seven annual art fairs on three continents; No. 9 Cork Street, its gallery premises in London where dealers and non-profit art entities can rent temporary exhibition space; and the eponymous flagship publication with which the company started.
Barring any later changes, however, this structure differs from Endeavor's original plan to solicit bids for Frieze and the Miami and Madrid Opens as a package. In November, Bloomberg cited sources with direct knowledge to report that 'several parties [had] already expressed interest in all three assets.' The apparent decision to peel off Frieze into a standalone transaction suggests Endeavor and its advisors altered their strategy after getting a clearer sense of the market during the closed auction process.
The second surprise is the reported valuation of almost $200 million. Within the art trade last autumn, the most persistent financial rumour about a Frieze sale was that Endeavor was seeking $80 million, a price several art professionals considered too ambitious. That Emanuel's firm is said to have paid almost two and a half times that amount is a stunning development. At the same time, since Frieze's business performance was generally subsumed into the larger accounting for all live-event properties in Endeavor's public regulatory filings, few outside those companies ever had access to the full array of metrics typically used in setting valuations.
Why is Emanuel's company buying Frieze?
The famed Hollywood dealmaker said in a statement that Frieze 'has always been a source of inspiration for [him] — both professionally and personally.' Almost a decade of evidence backs up his rhetoric, including tens of millions more dollars spent prior to this latest transaction.
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It was during Emanuel's tenure as chief executive that Endeavor acquired a 70 percent stake in Denmark Street Limited, Frieze's holding company, in April 2016; oversaw the founding of Frieze Los Angeles in 2019 and Frieze Seoul in 2022; bought out the brand's co-founders, Amanda Sharp and Matthew Slotover for a reported $16.5 million in May 2023; and struck deals to add two more regional art fairs, Expo Chicago and New York's Armory Show, under the Frieze banner just two months later. A regulatory filing by the Vornado Realty Trust, the Armory Show's previous owner, shows that Frieze paid $24.4 million for that fair.
Emanuel, a longtime evangelist for the value of live events in an increasingly digital world, may be motivated by a belief that no other company like Frieze is likely to become available. The only moderately comparable asset is its chief rival Art Basel, which stages lavishly produced art fairs for hundreds of galleries in its namesake Swiss city, Miami Beach, Hong Kong and Paris each year while also operating an editorial platform, a growing portfolio of technology products and a live-events consultancy, among other ventures. But the two companies also differ substantially in their geographical spread, long-term assets (such as real estate, equipment and technology), liabilities and other factors, making it unreliable to model the value of Frieze after the value of Art Basel (and vice versa).
Regardless, Art Basel's parent company, MCH Group, completed a deal making Lupa Systems, the investment vehicle of the media scion James Murdoch its largest shareholder in 2020. Together, Lupa Systems and the canton of Basel-Stadt controlled around 76 percent of MCH Group's equity as of 2023, effectively making the company and its subsidiaries takeover-proof.
In this context, it may be somewhat less surprising that Emanuel would pay what many in the art trade perceive as a sizeable premium to regain control of Frieze. Similar to the old adage about the wisdom of investing in land, they simply aren't making companies like this anymore. (That said, it seems fair to wonder whether he could have negotiated a more favourable price had he waited longer in an economy growing less seller-friendly by the day.)
What does the sale mean for Frieze?
Little is set to change at the company for now. Frieze's leadership team, headed by chief executive Simon Fox, will remain in place, according to Endeavor's announcement of the sale. Beyond ensuring continuity, the decision is also true to history; Fox was appointed to his current position on Emanuel's watch in 2020, and the two appeared to work together harmoniously for the roughly half-decade preceding Silver Lake's acquisition of Endeavor.
'Financially, we are insignificant to Endeavor overall,' Fox said of Frieze in a 2024 Vanity Fair interview. 'We are taken very seriously by Ari and the team, disproportionately to our financial contribution.' That Emanuel so vigorously supported Frieze before, despite the latter's apparent inability to post big profits, suggests he will be inclined to take a similarly long-term approach again.
What are the implications for the wider art industry?
The art fair sector has been under mounting pressure since before the Covid-19 pandemic, as dealers continue to grapple with spiralling costs to show at these events and, in many cases, diminishing returns from doing so. The latest edition of the Art Basel and UBS Art Market Report found that art-fair expenses ranked in the top three concerns among surveyed dealers and that their share of sales made at fairs declined from 42 percent in 2019 to 31 percent in 2024.
The news that Endeavor was trying to offload Frieze fuelled speculation among some art insiders that the brand might be next in line for a culling. The co-founders were gone. The wider economic climate was dour. Emanuel, its in-house champion, was headed for the exits. (He stepped down as chief executive of Endeavor to become the executive chairman of WME, its talent agency, once the take-private deal with Silver Lake was finalised.) Perhaps Frieze would be sold off for parts or simply shuttered if no buyer emerged with an enticing offer quickly enough.
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The sale to Emanuel and his well-capitalised firm neutralises these concerns, at least temporarily. Against the backdrop of the art market's struggles, the odds have increased that the fair sector continues consolidating, with Frieze and Art Basel its international anchors.
Still, it would be naive to expect Emanuel, one of the most insatiable entrepreneurs of the past 50 years, to allow his new asset to simply stand pat until lower-level competition falls away over time. Maybe his financing and relentlessness will enable Frieze to roll up more regional fairs, or to secure venues that will allow the brand to scale up its smallest events (Frieze New York, which opens to VIPs at The Shed on 7 May, is at capacity with fewer than 70 exhibitors this year) or to find lucrative synergies with other experiential properties yet to be acquired.
Emanuel said in yesterday's statement that Frieze is 'positioned for further growth.' Even if the specific strategies for achieving this remain mysterious right now, his general ambitions are openly on the table.
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