Last year, the growing popularity of electronic dance music, or E.D.M., brought out the deal-makers of the music industry as if drawn to the scent of prey. A handful of big dance promoters were sold, and one media mogul, Robert F.X. Sillerman, announced plans to build a $1 billion dance music empire. But the year ended without any big, market-defining deal.

That deal may be coming soon, however, with the possible sale of Insomniac Events, which puts on the huge Electric Daisy Carnival festival. Bidders for the company include Live Nation Entertainment and Mr. Sillerman’s company, SFX Entertainment. AEG Live and Red Light Management, an artist management firm with interests in music festivals like Bonnaroo, have also made offers but are not believed to be strong contenders in the auction, according to several people directly involved with the talks.

These companies — among the biggest players in live music — are valuing Insomniac at between $70 million and $100 million, and are looking to buy anywhere from 50 to 100 percent of the business, said these people, who spoke on condition of anonymity because the talks were ongoing.

Representatives of all the companies declined to comment.

Insomniac, founded 20 years ago by Pasquale Rotella, is the biggest promoter of electronic dance music in the country. The company sold more than one million tickets last year to dozens of events; its biggest, the Electric Daisy Carnival in Las Vegas, had more than 300,000 people in attendance over three days. The company did not report sales figures for that event, but a smaller Electric Daisy last year, in New Jersey — with only 100,000 in attendance — had $7.3 million in gross ticket sales, according to Pollstar, a concert industry trade publication.

The sale of Insomniac could shift the competitive landscape of the business. SFX, for example, which so far has made only a handful of deals, would instantly become a major player with Insomniac in its portfolio, while Live Nation, which puts on dozens of festivals around the world, could end up controlling many of the biggest dance events in the United States as well.

A deal for Insomniac could be particularly important for Mr. Sillerman, who wants to build a national media network around the disconnected dance audience. So far he has bought two promoters, and according to a report on Thursday in Miami New Times, SFX has also made an investment in a number of major nightclubs in Miami. That is a small empire compared with Live Nation, but Mr. Sillerman has been down this road before: in the 1990s, he established the core of what became Live Nation by buying up dozens of rock promoters around the country, much as he is attempting to do now in the world of E.D.M.

The people briefed on the talks said it was possible that the sale process could break down. One reason is that Mr. Rotella, like many promoters of his generation, built up his company gradually, on the fringes of the industry, and he may prefer to remain independent. Mr. Rotella has also spoken out against corporate deals in the past.

The dance world is also seen as risky by some investors, and the scene has never shaken its reputation as a drug haven. At Electric Daisy in Los Angeles three years ago, for example, a 15-year-old girl died of a drug overdose. Mr. Rotella has had other problems as well. Last year he was indicted by a California grand jury on charges related to the embezzlement of $2.5 million from the Los Angeles Memorial Coliseum. He has denied the charges.

Article source: http://mediadecoder.blogs.nytimes.com/2013/01/18/big-music-companies-are-said-to-pursue-a-top-dance-promoter/?partner=rss&emc=rss