The tent is up and the dealers are in town. And Frieze, the annual contemporary art show, is preparing to unleash a live donkey, a professional pickpocket and live snails on an art-hungry New York public. It’s also bringing, as a contemporary art show should, the scent of something new.

Ahead of the 5-8 May show on Randall’s Island in the East River, the UK-based art exhibitor announced a partnership with Hollywood agency giant WME-IMG. The deal raised a few eyebrows, and posed questions about the future of the tightly controlled gallery system that still rules much of the art world but has become increasingly dependent for sales on art fairs.

Though not the first such deal, WME-IMG’s agreement with Frieze underlines a trend in art. While the market is still minuscule in terms of active collectors, the business is scaling up in terms of visitors with shows such as Frieze and Miami’s Art Basel attracting huge crowds. If WME-IMG – which has its roots in Hollywood’s most venerable talent agency, William Morris – can manage golf and tennis tournaments, including Wimbledon, art should not pose too many problems, the thinking goes. Wimbledon, in June, counted half a million; Frieze in London, in October, 55,000 visitors.

The market may change further with what Frieze executives call the “under-explored” area of online art, including virtual reality. But that’s in the future. Despite investment in the digital sphere, including auctioneers Sotheby’s and Christie’s use of online video to introduce art sales and a handful of direct sales sites, art has been slow to find its online footing.

While Frieze has yet to outline the terms of the deal, the London-based firm was approached by WME-IMG’s Ari Emanuel, a former Hollywood talent agent (he’s the brother of Chicago’s embattled mayor Rahm Emanuel and the model for Ari Gold in HBO’s Entourage). He praised the fair as “an incredible offering for the global art community”.

The deal places Frieze, currently celebrating 25 years since it began publishing an arts magazine, in the company of top Hollywood stars and athletes, including Matt Damon and Serena Williams, as well as the Professional Bull Riders franchise and the Miss Universe pageant, formerly owned by Republican presidential contender Donald Trump.

Three years ago, Emanuel forged a $2.4bn deal merging William Morris (by then William Morris Endeavor) with IMG, a company known for representing sports stars and fashion models, as well as staging and TV licensing for sports events and 32 fashion weeks around the world.

Last week, Frieze executives Amanda Sharp and Matthew Slotover explained that the deal underscored the reality that the art fair now requires management expertise honed at sports or fashion market week events. The deal is one of the first since the agency sold a stake to Japan’s Softbank that valued the company at $5.5bn.

Sharp told the Guardian: “The deal came out of left field. They came to us. No one was expecting it.” Emanuel, Sharp adds, “treats us like artists, and he put us in the driving seat”.

The WME-IMG hook-up is advantageous in terms of leveraging existing service contracts and back-office organisation, but Frieze has also been coming under pressure from exhibitors to reduce their burden of the costs.

Gallerists frequently complain that while art fairs are important for sales and meeting new clients, they have also become financially onerous and distracting. If sales are only made at fairs, the thinking goes, costly gallery spaces begin to lose their purpose. Artists too find that they are under pressure to create new work for fairs, not as part of an exhibited body of work.

Sharp has heard this criticism that her fair is the tail that wags the dog, and that the expense of showing, especially for middle-market galleries, is burdensome. She anticipates that the new sponsorship deals through the agency – this year’s fair is supported, as it has been for five years, by Deutsche Bank – may “take some of the weight off exhibitors”.

But the larger purpose may be to push the experience of art deeper into the broad cultural realm, says Slotover. Frieze currently runs three fairs: Frieze and Frieze Masters, in London, and the New York fair this week. But the company is coy about further expansion plans. “Clearly over the last 50 years we’ve seen a huge expansion in the art world,” Slotover says. “It’s a long-term trend that we see continuing.”

A digital future?

Part of any expansion, Frieze anticipates, will be in the digital realm, where Slotover sees room for expansion – with access to WME-IMG’s deep pockets and digital experience. Agencies such as WME-IMG are already active in VR, and there’s no reason why techniques being developed for live-action, 360-degree virtual reality content couldn’t be applied to, say, performance art.

“Nobody has cracked the digital component in art. Many are trying, like Artsy and Paddle 8 [two online services for collectors and art fans], though they’re not really selling a lot online, maybe because art is physical,” Slotover says. Virtual reality, for instance, could begin to change that, or at least change the experience of viewing art through a computer. “Since we’ve got a magazine and an art fair, we need to improve what we’re doing online. It’s easy to spend money online and get little in return and they know how to get eyeballs.”

The Frieze/WME-IMG deal is not the first sign that Hollywood, hit hard by piracy and the collapse of the DVD market, is looking further afield for business. Art, by contrast, is now moving toward an events model more familiar to sports or music.

“We’ve done a good job, we have a small team and they have a huge events business,” says Slotover.

WME-IMG is not alone in looking toward the art sector, or introducing Hollywood agentry expertise to what has formerly been a relatively homespun business. Last year, Joshua Roth of United Talent Agency launched an in-house division that aims to represent artists looking to break into the movie business. The move was largely ridiculed by dealers and galleries, who see this as a heavy-handed attempt to encroach on their percentages. But the transition has clearly worked for some, including Oscar-winning British film director Steve McQueen, a major art star and Turner Prize winner before he turned to directing.

Still, Hollywood-styled expertise is calling – and not just art. In a parallel field, former ICM agent Matthew Moneypenny, armed with a multi-million investment from Waddell & Reed, and with the support of Thomas Tull, the investor behind Legendary Pictures (makers of The Dark Knight trilogy, The Hangover and its sequels), has been buying up fashion agencies representing stylists, photographers and make-up artists, as well as creating a fashion image catalogue business, Trunk Archive, representing Annie Leibovitz, Bruce Weber, Inez and Vinoodh.

Moneypenny has said that fashion, like art may under the Frieze/WME-IMG deal, could benefit from the kind of power plays, scaling and horse-trading typical to Hollywood agentry.

Despite fears of increased corporatization, the fashion world appears to be embracing the concept. Moneypenny’s company, Great Bowery, is looking to set multimillion-dollar fee guarantees for its photographer clients and recently signed celebrity stylist Grace Coddington who has sold film rights to her autobiography and launched a perfume called Grace in a display of entrepreneurial, cross-platform thinking.

While that may work for fashion, which Frieze’s Slotover says is looking at pay-scale declines as many brands, notably Prada and Burberry, struggle through a global luxury market downturn, the WME-IMG plan is not designed to squeeze or set up rivalry with the gallery system.

Despite Frieze’s own curatorial agenda, which includes talks and performance pieces, galleries are Frieze’s content providers; the deal is not, says Slotover, a backdoor for WME-IMG to acquire artists for representation. Still, a cut is a cut, and contemporary art is popular in Hollywood.

“Ari is very clear: he doesn’t want to compete with the gallery system,” said Slotover.

Still, both the art and fashion deals clearly identify market opportunity is in the disparity between the number of active art collectors – or fashion buyers – and the attention these fields receive in the media and through attendances at art fairs, galleries, museums show and so on. WME-IMG recently launched a 24-hour fashion cable channel M2M.

They are not alone in sensing a shift. Market rivals Sotheby’s and Christie’s are aggressively seeking new revenue streams, and Sotheby’s is now run by Tad Smith, formerly president and chief executive of New York’s Madison Square Garden, the sports and concerts group.

There will be no shortage of art at Frieze – exhibits this year include a live donkey – but under the surface the business of art is changing and, like fashion, looking to large-event expertise for direction. It’s 25 years since Sharp and Slotover started Frieze. “Remember, we come from a magazine background,” says Sharp. “We’re still a mom-and-pop shop. But on a much larger scale.”

• This article was amended on 27 April 2016. An earlier version incorrectly referred to Trunk Archive as Trunk Archives. This story was also corrected to reflect that Waddell & Reed, rather than Thomas Tull, provided investment to Great Bowery, and that Great Bowery did not represent Grace Coddington at the time of her film and perfume deal.