$150m for ‘for-sale’ Pandora as Ticketfly up 25%

Ticketfly’s turnover increased 25% in the first financial quarter (Q1) of 2017, with ticketing once again proving the most consistent source of growth for troubled parent company Pandora.

Pandora’s ‘ticketing service’ revenues grew to US$27.8 million, roughly 9% of the internet radio/streaming giant’s total turnover of $316m – which grew 6.3% year on year, although losses also widened from $115.1m to $132.3m.

Primary ticketing platform Ticketfly, founded by Andrew Dreskin (ex-TicketWeb), grew revenue 25%, to $86.6m, in 2016 – its first full year as a division of Pandora Media.

The release of its latest set of financials comes amid the injection of $150m of new capital into Pandora by private-equity firm KKR (the same company which helped finance William Morris’s acquisition of Ultimate Fighting Championship). “We are excited to support the long-term growth of Pandora with this investment,” comments KKR’s Richard Sarnoff, who joins the company’s board. “A true pioneer in digital music, we believe that Pandora is uniquely positioned over the long term given the sheer size of its user base, the quality of its new subscription services and the fact that it has created one of the few scaled streaming-media businesses in the US.”

“We are excited to support the long-term growth of Pandora with this investment”

It has been speculated, however, that Pandora is targeting an acquisition within the next 30 days – before the KKR deal comes into force. “Sources familiar with the company’s thinking” tell CNBC that its leadership sees the investment as an “insurance policy of sorts that effectively gives the company a 30-day option to sell itself – which it thinks it can do.”

Pandora concurrently announced a restructuring of its board, setting up an independent committee chaired by independent director Tim Leiweke (the ex-AEG CEO who now runs Oak View Group) to identify “additional expertise and leadership as the company moves forward”.

At the time of writing, its share price had fallen to $9.90, from an all-time high of $37.42 in February 2014 – during which time its streaming business has been eclipsed by on-demand rivals such as Spotify and Apple Music, despite the recent launch of its own Premium platform.

Pandora last July rejected a takeover offer by Greg Maffei’s Liberty Media, which owns roughly a third of Live Nation. Reports suggested its board felt the company was worth closer to $20 per share, rather than the $15 offered by Liberty.

 

---

Get more stories like this in your inbox by signing up for IQ Index, IQ’s free email digest of essential live music industry news.