As corporations hear the siren call of electronic dance music, the deals keep getting bigger.
On Thursday, SFX Entertainment will announce that it has bought 75 percent of IDT, a Dutch festival promoter, for $102 million in cash and stock. The deal, perhaps the biggest in the market so far, will give SFX a major foothold on the global festival circuit as it tries to build a $1 billion media empire centered on dance.
IDT puts on the annual Tomorrowland festival in Belgium, which last year drew 180,000 people, as well as Sensation, an indoor event held in 20 countries. IDT already formed a joint venture with SFX to bring a festival to North America, and on Wednesday the two companies revealed the details of that partnership: TomorrowWorld, an event for 150,000 people to be held in Chattahoochee Hills, Ga., from Sept. 27 to 29.
(Why not call the new one Tomorrowland? Disney owns that name in the United States, according to Duncan Stutterheim, one of IDT’s founders.)
“We are aligned with a festival operator who has been doing this for 20 years and has helped define quality and a great experience for fans,” Mr. Sillerman said in an interview. “It also gives us the global footprint to begin creating the worldwide community of dance fans.”
The deal values IDT at $136 million.
Mr. Sillerman, who corporatized the concert industry in the 1990s through a previous incarnation of SFX, revived the company last year to capitalize on the rise of electronic dance music, or E.D.M.
After decades on the cultural margins, dance has taken over the sound of Top 40 radio and drawn huge crowds to festivals around the world — and, in turn, the attention of Wall Street investors.
So far SFX has bought a string of Miami nightclubs and several festival and live-event companies. But its acquisition spree took off recently when it paid $50 million for Beatport, a download store that Mr. Sillerman wants to use as a hub to connect the disparate global dance audience, and therefore and attract advertising dollars from major brands. This week, SFX also announced an investment from the advertising giant WPP that has been estimated at $10 million.
Mr. Stutterheim said in an interview that SFX’s resources would help his festival franchises expand quickly around the world. This year, IDT events will take place in Brazil, South Africa and perhaps in Kenya, and Mr. Stutterheim said he was looking at various spots in Asia.
“I believe in this story, that this will build into a new worldwide electronic company,” he said of SFX. “This is a really big step, and we could never do it ourselves.”
Last year, IDT brought its Sensation event to the Barclays Center in Brooklyn in cooperation with Live Nation. But the SFX deal is a sign that corporate allegiances are being drawn at the top levels of the festival market. Live Nation, which has been building its own dance empire, is said to be in the advanced stages of takeover talks with Insomniac, the promoter behind the Electronic Daisy Carnival events.
Another power struggle is taking shape in Las Vegas, where top D.J.’s are booked to multimillion-dollar residencies at the nightclubs attached to major casinos. The Wynn casinos have built a lineup with dozens of D.J.’s; a nightclub branch of Hakkasan, a high-end restaurant chain, has arrived as a major competitor. The club, opening next month at the MGM Grand, has booked a number of star D.J.’s, like Tiësto, Deadmau5 and Steve Aoki, who have been associated with Wynn.
Mr. Stutterheim, like other entrepreneurs in the dance world, built his business and his festival brands as an independent company, and said that at first he was ambivalent about selling to a corporation whose goals were anything but indie.
“There was hesitation in the beginning, of course,” he said. “But for me the big change was when the agents came in with the big D.J.’s, the big, top-dollar stars that changed the game. Now it’s just the professional entertainment industry. I’m seeing possibilities, and I don’t have any hesitance now. That’s the way it’s going, so, O.K., let’s go that way.”
Article source: http://mediadecoder.blogs.nytimes.com/2013/03/21/sfx-entertainment-buys-major-stake-in-dutch-festival-promoter/?partner=rss&emc=rss
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