Believe buys Indian event production company Entco
French digital music distributor and artist services startup Believe has acquired Mumbai-based live event production company Entco, as the Parisian business strengthens its foothold in India.
Entco creates live events for brands and consumers across India, the Middle East, Southeast Asia and the United States. The acquisition aims to align Entco’s events with Believe’s growing artist services operations, music distribution and label services.
The acquired company, which will continue to be based in Mumbai, will be rebranded as Believe Entertainment. The company’s founders, Subramanian Iyer and Warren de Sylva, will stay on to lead operations.
“This strategic move will bring our artists and brands unprecedented access to the expertise and scale of Believe’s 44 global offices and more than 1,000 professionals,” says Iyer, co-founder and managing director of Entco.
“Our vision is to inspire audiences through extraordinary live music experiences and this new step is the perfect opportunity for us to scale up and expand our offering,” adds Entco creative director De Sylva.
“We have been growing quickly to a leadership position in the Indian market and with Entco’s expertise, Believe will have unparalleled ability to help creators in India”
“Believe will amplify what we’re able to provide through the power of one of the true global leaders bringing together technology and services to connect audiences with music.”
Denis Ladegaillerie, chief executive of Believe comments that, “Subramanian and Warren have uniquely brought live music experiences that bring artists, brands and consumers together.
“We have been growing quickly to a leadership position in the Indian market and with Entco’s expertise, Believe will have unparalleled ability to help creators in India build audiences, careers and revenue opportunities.”
According to figures supplied to IQ by PricewaterhouseCoopers (PwC), the live music industry was worth US$100 million in 2018, with a projected value of $110m for 2019. PwC estimates that the live market will continue to grow at a compound annual growth rate (CAGR) of 7.74% from 2018 to 2023, to $145m.
Pictured (l to r): Believe India director Vivek Raina, Believe Entertainment CCO Warren De Sylva, APAC-LATAM Believe director Sylvain Delange, Believe Entertainment CEO Subramanian Iyer.
Global hails successful festival debut as profits rise
Global, the UK’s second-largest festival operator, recorded its eighth consecutive year of growth in 2016–17, increasing earnings before interest, taxes, depreciation and amortisation (EBITDA) 4.4% to £74.5 million.
Through its subsidiaries Global Festivals Ltd and Global Live Ltd, Global – formed by Ashley Tabor in 2007, and known primarily for most of its existence as Britain’s largest commercial radio operator – made several acquisitions of festival promoters in the year ending 31 March 2017, cementing its status as Live Nation’s nearest competitor for control of the UK festival market.
They were: Count of Ten (100% stake), on 4 June 2016; Broadwick Live, on 31 May 2016 (49% stake) and 20 September 2016 (a further 7.6%); Lock’n’Load Ltd (75.7%) and Waxarch Ltd (80.6%), both on 3 October 2016 (full story here); Victorious Festivals Ltd (65.5%), on 17 October 2016; and Lakeside Creatives Ltd (66%), The Hideout Festivals LLP (80%) and Moving Music Ltd (75%), all on 21 February 2017.
Global Festivals Ltd also absorbed Global 05699567 Ltd, a holding company formerly known as Ugly Duckling Investments Ltd, on 21 February.
The combined success of its radio business and its “successful entry in the festival sector” represented an “extremely successful year” for Global
The main reason for the increase in profitability was growth in commercial revenues. While Global director and CFO Darren Singer, in his preface to the Global group’s 2016/17 accounts, writes that the “full financial impact of these acquisitions will be reflected in the group’s 2017/18 financial results, because the majority of the acquired festivals took place before the group had acquired the festival entities”, the combined success of its radio business and its “successful entry in the festival sector” represented an “extremely successful year” for Global.
The accounts also reveal that one of Global’s motivations for getting into festivals is a weak advertising market, with a portfolio of music events allowing the company to offer “tailored solutions to advertisers, […] enhanced during the year with the addition of a number of music festivals.”
Total 2016/17 revenue was also up, to £302.6m – an increase of 9.6% on 2015/2016’s £276.2m – although Singer notes that the company “continues to make a statutory loss”.
IQ revealed last September that Global is scaling back its Global Live touring operation to focus on its festivals business, which holds an 8% marketshare in the UK less than two years after launch.
Global scales back touring business as live team joins LN
Global Entertainment, the UK’s second-largest festival operator, is downsizing its touring business in favour of a renewed focus on its portfolio of festivals, following former Global Live chief Sam Bush and promoter Joe Schiavon’s move to rival Live Nation, IQ has learnt.
While some sources tell IQ Global’s decision came as a result of Bush and Schiavon’s departure, the company says the reorientation is down to “significant growth” in its festivals division, with the business now holding 8% marketshare in the UK less than two years after its launch.
“Two years after we made our first move into the festivals business, we’re the second largest operator in the UK, and we’re seeing significant growth,” says the spokesperson. “We’ve therefore made the decision to focus on this part of the business, and while we will still do some touring, we’re prioritising growing our festivals business. As a result, Sam and Joe have moved on, and we wish them all the best.
“We’re continuing to expand the festivals business in the UK and internationally. All the festivals have their own established bookers, who will continue to programme the festivals and book acts.”
Global Live launched as a division of Global Entertainment in April 2015, with Bush, formerly head of live music at AEG UK, as director. Global Entertainment – which also includes music publishing and management divisions – was initially headed up by former AEG CEO Randy Phillips, although he exited after seven months, with his role being absorbed by Global founder Ashley Tabor (Phillips later turned up at SFX Entertainment successor LiveStyle).
“While we will still do some touring, we’re prioritising growing our festivals business”
The company entered the festival business in June 2015, buying into Broadwick Live (Festival №6, Snowbombing, Boardmasters), and recently grew its portfolio to a total of 17 events by by acquiring majority stakes in Hideout Festival in Croatia and Victorious Festival in the UK.
Bush, who is now Live Nation’s president of UK touring, and Schiavon, who continues in a national promoter role, join Live Nation UK after a record summer for the company, with more than three million people attending its events, including a string of sell-out stadium shows and several successful festivals.
They are joined by new promoters Kamran Haq – who cut his teeth as a local promoter in Manchester, before moving on to work with acts such as Frank Carter & the Rattlesnakes, Creeper, Neck Deep, State Champs and Basement – and Sean Ryman, who joins from Academy Music Group, where he promoted nationally shows by Taking Back Sunday, Slaves, Less than Jake and The Used.
All four new hirings underscore Live Nation UK’s “commitment to invest in and develop new talent”, says the company. Recent LNUK artist break-outs include Dua Lipa, Giggs, Pvris, Creeper, Mura Masa and Nothing but Thieves, while upcoming shows by emerging artists include Sigrid, Stefflon Don, Blackbear, Lil Peep, Tom Tripp, Greta Van Fleet and Rolling Blackouts.
Andy Copping, Live Nation executive president of touring, UK, comments: “It is with great pleasure that I welcome Sam, Joe, Kamran and Sean to Live Nation. Following our partnership with Metropolis Music this year and the addition of these hires, we have further strengthened a formidable promotions team who are dedicated to breaking artists, building careers and bringing even more incredible live experiences to fans in the UK.”
Global’s Ian Hanson named MelodyVR director
British music VR start-up MelodyVR has appointed Ian Hanson, chief operating officer of Global, as a non-executive director.
Hanson joined commercial radio giant Global – now also the UK’s second-biggest festival promoter – from Evenbase Recruitment, and was previously group operations director of Daily Mail and General Trust and COO of EMI. He replaces Peter Read on the board of MelodyVR parent EVR Holdings.
London-based MelodyVR has partnerships with both Universal Music Group and Warner Music group to develop “virtual-reality music experiences” featuring artists from the major labels’ respective rosters.
“MelodyVR occupies a unique position in a rapidly expanding VR marketplace”
Hanson comments: “I’m very excited to be joining the EVR board and to be a part of a very exciting journey.
“MelodyVR occupies a unique position in a rapidly expanding VR marketplace, and that, together with an impressive management team led by Anthony Matchett, [means] the company is very well placed to grow significantly and to further establish a market-leading position.”
The rise of virtual reality was one of the key talking points of the music business in 2016, with several festivals, promoters and streaming services partnering with VR companies amid wider consumer adoption of the technology.
Global poaches LN’s Ward for brand partnerships
The battle for UK festival dominance is heating up.
Fresh from last week’s acquisition of Victorious and Hideout Festivals, London-headquartered Global Entertainment has appointed a seven-strong commercial team to develop brand partnerships for its growing portfolio of 17 festivals in the UK, Europe and Canada.
Overseeing the new division is Debbie Ward, formerly vice-president of marketing partnerships at Live Nation. She joined MAMA Festivals – acquired by Live Nation in August 2015 – in 2008 as head of brand partnerships, where she brokered commercial partnerships between festivals including Lovebox and Wilderness and brands such as Mulberry, Laurent-Perrier, Corona, Jack Daniels and HTC.
Other new hires are brand partnership directors Wayne Mensah, who moved from youth entertainment channel The Hook, and Amy Oldham, who also joins from Live Nation. The team will also include a brand manager and three account managers.
“In just 12 months, Global has become the second-biggest player in the UK festival market, which is why we needed to find the best commercial talent to support our investment in this sector”
Live Nation – the UK’s biggest festival promoter, leading second-placed Global – itself recently acquired a majority interest in Isle of Wight Festival, bringing its total to 85+ events internationally.
Global chief commercial officer Mike Gordon comments: “In just 12 months, Global has become the second-biggest player in the UK festival market, which is why we needed to find the best commercial talent to support our investment in this sector. I’m delighted that Debbie has joined Global, given her very impressive industry credentials, having created some of the most talked-about festival partnerships.
“With an enviable portfolio of festivals, access to Global’s talent management and events expertise and, of course, an audience of 30 million people every week through our media brands, our festival offering is truly unique.”
Ward adds: “The opportunity to join Global and lead the commercial side of their festivals business is incredibly exciting. We are perfectly placed to deliver some of the world’s most exciting campaigns for brands, and I’m looking forward to working with new clients to build some memorable experiences at our festivals.”
Opportunities in consolidation
Last year saw more than 30 million people attend music festivals in the UK. With market value forecast to rise as high as £3.5 billion by 2020, the sector presents a phenomenal opportunity for owners, promoters and investors.
The number of events has increased from 496 in 2007 to 1,070 in 2016 – one particularly welcome result of the rise is the corresponding increase in merger and acquisition (M&A) activity. As we enter 2017 festival season, we are likely to see an increase in the number of deals being done, led by buyers with a series of objectives in mind, the first being consolidation.
Several significant deals have completed in recent months, including Live Nation’s acquisition of MAMA Group, Parklife and Isle of Wight Festival, Universal’s acquisition of an equity stake in jazz festival Love Supreme and several acquisitions by Global Entertainment, including Y Not, Rewind and, most recently, Victorious Festival and Hideout Festival. These deals are testament to festival owners who built enviable concepts that attract the crowds year in, year out.
Growth in the festival portfolios of the larger players provides them with increased opportunity to secure talent on exclusive live music deals, along with benefitting from income synergies through other related activities, such as ticketing and corporate sponsorship. Acquisitions also allow cost savings across a portfolio through both knowledge sharing and ability to drive economies of scale, reducing overall expenses.
There is also, of course, the desire to have the next must-have asset, with some events attracting a premium based on their brand alone.
Buyers are interested not only in festivals which provide consistently high-quality experiences for its attendees, but fundamentally their ability to generate profits
To date, we’ve seen the majority of M&A and consolidation activity from the larger corporate live music stalwarts. However, where there is money to be made and sizeable festival empires to grow, private equity investment can’t be far behind, joining some of the venture capitalists seeking to benefit from these positive market trends.
With M&A activity and consolidation changing the dynamics within the market, owners and promoters must ensure that their events continue to innovate and compete successfully.
The most crucial challenge is securing the all-important talent. Securing popular artists remains a fundamental principle in delivering successful live music festivals, but consolidation in the sector has resulted in larger groups requesting that artists sign up to their portfolio of festivals and tours exclusively. Conversely, the devolution of recorded music means that artists are relying to a greater extent on festivals and live music to make their money – a dynamic that has helped to encourage the proliferation of events. Promoters will need to work harder and faster to secure the desired artists and negotiate favourable terms for both parties.
This aspect of consolidation doesn’t affect the entire market. Independent festivals will continue to thrive, given that they aren’t competing head on for major festival artists but are instead booking specialist artists in a particular genre, benefitting from a different set of pull factors for consumers – namely atmosphere, experience and exclusivity. The same applies for secondary touring markets: the trend towards live music has seen artists seeking alternative ways to reach new fans, dictating the rise in live music in regional non-mainstream locations and festivals, such as, for example, the Manchester International Festival.
As the sector continues to perform well and expand further, we expect M&A activity to increase in accordance. Owners and promoters would be sensible to ensure that their brand is fit for the future, and in a strong position to capitalise on potential interest, whether from a competitor or private equity or venture capital investment, being mindful of core valuation drivers that, combined, see that festival assets are sold for a strategic premium.
With M&A activity and consolidation changing the dynamics within the market, owners and promoters must ensure that their events continue to innovate and compete successfully
The first is the delivery of profitability over a consistent period – buyers are interested not only in festivals which provide consistently high-quality experiences for its attendees, but fundamentally their ability to generate profits. From a potential buyer’s perspective, the best performing festivals will be delivering consistent year-on-year growth in both revenues and profits. Profit margin is crucial, and shouldn’t be ignored in favour of focusing on revenue and attendee growth. Even from the early days, as the festival grows, decisions should be taken to drive profitability, not just increase attendee numbers. Where possible, the security of revenue and/or profit should also be safeguarded through relevant and appropriate insurance.
This isn’t to say that demonstrating year-on-year growth in attendees isn’t important; merely not the sole requirement. Being able to demonstrate and plot historic growth and potential future growth will be of huge interest to prospective bidders. Festival owners should try to plan ahead if capacity constraints are going to restrict this growth – it may mean relocating at the appropriate time, or expanding through additional dates at existing sites.
Last but not least is the ability to provide timely production of quality management information. How did ticket sales compare to the same period the previous year? What is the average per-head spend on F&B and how does this vary for each day of the festival? What percentage of paying adults purchased merchandise and how does this compare to the previous year? Having access to this information not only protects value during a sales process, but drives it upwards by providing the buyer with confidence that targets can be achieved.
By delivering on these core points, owners and promoters can ensure that – whether looking for investment or open to a sale – they’re as well-equipped as possible to deal with the challenges and opportunities in 2017 and beyond.
James Fieldhouse is corporate finance director at accountancy and business advisory firm BDO.
Global acquires Victorious and Hideout Festivals
Just four days after IQ revealed the UK’s largest festival promoter, Live Nation, had acquired Isle of Wight Festival, the second-largest – Ashley Tabor’s Global Entertainment – has made two buys of its own.
With the acquisition of majority stakes in Victorious Festival, a family-friendly festival in Portsmouth, in southern England, and Hideout Festival, an electronic music event on the Croatian island of Pag, Global’s festival portfolio now stands at a total of 17 events, cementing its position as a major player in the increasingly consolidated international festival market.
Global Entertainment, initially headed up by ex-AEG CEO Randy Phillips (now at LiveStyle, the former SFX) entered the festival business in 2015 following the acquisition of Broadwick Live.
“We are continuing to grow our portfolio, with more to come”
Global acquired UK festivals South West Four, Field Day, Boardmasters, Rewind, Y Not and Truck last October. It also promotes Austrian music/ski festival Snowbombing – which will expand to North America this year with the inaugural Snowbombing Canada – and Welsh boutique event Festival №6, as well as Standon Calling, Glass Butter Beach, Lost Village and former Hideout rival Electric Elephant.
In addition to its Entertainment division, which includes music publishing, management and live and touring operations, Global is one of the UK’s largest commercial broadcasters through Global Radio (Heart, Capital, Smooth, Classic FM) and Global Television (Capital TV, Heart TV).
“We are excited to welcome Victorious and Hideout Festival to the family,” says Global COO Ian Hanson. “Each of them is a renowned music festival with a strong and loyal following, and we look forward to working with the festivals’ management teams to grow them to the next level. We are continuing to grow our portfolio, with more to come.”
Randy Phillips confirmed for SFX 2.0
After months of speculation, it has been has confirmed that former AEG Live CEO Randy Phillips will take over the running of SFX Entertainment when it emerges from bankruptcy in early 2017.
Buried in a mammoth 241-page court document, filed on Friday, is the news that Phillips (pictured) – listed under his real name, Brandon Phillips – will become SFX’s new CEO and president, with Global Entertainment alumni Charles Ciongoli named executive vice-president and chief financial officer, Alan Walter – presumably rival Insomniac’s current senior vice-president of finance, who also previously served at Global – becoming senior vice-president and Jason Barr remaining as senior vice-president, general counsel and corporate secretary.
The new board of directors for what the court calls the “Reorganized [sic] SFXE” is named as Phillips, Ciongoli (appointed by Phillips) and three money men: Axar Capital Management’s Andrew Axelrod, Allianz Global Investors’ Douglas Forsyth and Carlyle Group’s Nils Larsen.
A hearing to approve the new board and reorganisation plan will take place this Wednesday
Adam Richman, festival director of Electric Zoo, will take a senior role in SFX’s festival divisions as senior vice-president of EZ Festivals and Made Event, while Florida nightclub promoter David Grutman will continue as CEO of SFX Nightlife.
A hearing to consider the new board and reorganisation plan will take place this Wednesday (9 November) at 10am eastern time (15.00 GMT).
Also of note is that Viagogo – which is seeking US$1.6 million from SFX for alleged breach of contract – will be given a vote on the plan of reorganisation. While both parties are clear neither accepts the other’s grievances, Viagogo will nevertheless be eligible to cast a ballot: $1 worth.
Global bulks up festival business with new buys
Global has expanded its UK festival footprint to a total of 11 events with the acquisition of South West Four, Field Day, Boardmasters, Rewind, Y Not and Truck festivals, and purchased a further stake in Snowbombing/Festival №6 promoter Broadwick Live.
With Broadwick Live, Global – comprising Global Radio (Heart, Capital, Smooth, Classic FM), Global Television (Capital TV, Heart TV) and Global Entertainment, which includes music publishing, management and live and touring divisions – already promotes, in addition to Austrian music and ski festival Snowbombing and Welsh boutique event Festival №6, Standon Calling, Glass Butter Beach and Lost Village, as well Croatian electronic festival Electric Elephant.
The company declined to provide details on its new holding in Broadwick Live, although the original deal, announced last July, was described as involving a “significant strategic stake”.
“Working with Global … we have a strong partner that offers us unbelievable support and shares our goal to build an international festival business”
Global says a focus for it and Broadwick Live (which have a “stronger partnership” following today’s deal) will be to export their festivals, in partnership with big-name international brands, to new markets, following the template of Snowbombing, which will hold its first Canadian edition, sponsored by Coors, next year.
Sam Bush, director of Global’s live and touring division, says: “We took a stake in Broadwick Live just over a year ago. We’ve had an incredible first year working together, working hard to bring in some of Europe’s leading music festivals, as well as some of the most innovative and well-loved up-and-coming festivals. We have a shared ambition to grow the portfolio, and we look forward to doing this with Gareth and the team at Broadwick Live, as well as the founders and managers of the festivals we have acquired.”
Gareth Cooper, CEO of Broadwick Live, adds: “These are exciting times. Working with Global has helped us to realise our ambitions and then some. We have a strong partner that offers us unbelievable support and shares our goal to build an international festivals business, starting with our first venture in North America [Snowbombing Canada] next year. What we have announced today is just the beginning.”
Global launched Global Entertainment, headed up initially by former AEG CEO Randy Phillips, in February 2015.