Germany’s Goodlive cancels Melt festival and more
German promoter Goodlive has cancelled the 2021 editions of Melt, Splash, Full Force and Heroes, days after CTS Eventim announced that its stable of summer festivals are taking another year off.
Goodlive’s best-known festival Melt was scheduled to take place between 4 and 6 June 2021 at the Ferropolis open-air museum, in Gräfenhainichen, Saxony-Anhalt, featuring acts including Arlo Parks, FKA twigs and Jamie XX.
“After months and months of hard work, so many different ideas and concepts and hundreds of calls with other festivals, politicians and experts, we have to admit to ourselves that the decision is ultimately out of our hands,” reads a statement on Melt’s website.
“Believe us when we say that we have tried everything to meet you guys in Ferropolis this summer, but due to the current political situation, the uncertainty of the pandemic and lack of prospects we simply cannot continue planning the festival for 4–6 June 2021.”
“Due to the current political situation, the uncertainty of the pandemic and lack of prospects [Melt]i cannot continue planning”
Similar statements have appeared on the social media pages of Splash (originally scheduled for the weekends 8 July and 15 July in Ferropolis), Full Force (25–27 June, Ferropolis) and Heroes (18-19 June in Geiselwind and 23 July in Freiburg).
Each of the statements adds that the festival is “doing everything in our power to get together and have a party later this year, even if it might be in a different setting”.
Goodlive’s newest festival, Superbloom, is still scheduled to make its delayed debut outing at Munich’s Olympiapark and Olympiastadion (75,000-cap.) this September, at the time of writing.
Elsewhere in the German festival market, Superstruct-backed events Wacken Open Air and Parookaville have not yet given up on their 2021 editions.
“[Wacken Open Air’s] late date, on the last weekend in July, allows us to observe the further development of the situation”
“We sympathise with our colleagues, for whom this decision was certainly not an easy one,” said Thomas Jensen, co-founder of Wacken, regarding the cancellation of the CTS Eventim festivals.
“Our late date, on the last weekend in July, allows us to observe the further development of the situation – for example with regard to the progress of the vaccination campaign and upcoming decisions by the federal government – and allows us a longer preparation time,” explains Jensen. “We remain hopeful and continue planning.”
The 2021 edition of the German metal festival is scheduled to take place between 29 and 31 July in the village of Wacken, Schleswig-Holstein. The sold-out event will be headlined by Amon Amarth, Slipknot and Judas Priest.
The Parookaville team is considering postponing the electronic music festival from 16–18 July at Weeze airport to a weekend in September, saying they are “examining all possibilities”.
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Buying and selling for beginners: Mayland CEO talks industry M&A
Investments and takeovers are the core business of Matthias Just, CEO of Mayland AG. Before becoming a lawyer Just completed an apprenticeship as a banker, and his CV includes positions in the UK and US at companies including Deloitte and Touche Corporate Finance.
Since the end of 2005, he has been a member of the board of Mayland AG, a Dusseldorf-based company specialising in mergers and acquisitions – including the likes of the takeover of Parookaville by Superstruct, whose portfolio also includes Flow Festival, Sonar, Sziget and Wacken Open Air, and is backed by Providence Equity Partners, which manages more than $45 billion worth of investments.
IQ spoke to Just (pictured) about why the live music industry is increasingly attractive to institutional investors – as well as how external investment companies can offer a compelling alternative to the major multinational concert businesses…
IQ: What is the external perception of the live music industry in the financial sector?
Matthias Just: The live music industry is growing and a stabilisation of turnover and profitability figures can be seen across most companies. Besides this, there are always new festivals that draw attention to themselves through innovative concepts and designs and are able to assert themselves in the market. In general, demand is still very high, despite increasingly high ticket prices.
In recent years, we have noticed that consumers in the leisure and entertainment sector have seldom been price-sensitive and are prepared to pay higher ticket prices in order to spend a weekend at their favourite festival. This willingness to pay is what distinguishes this industry and makes it interesting for strategic investors, as well as financial investors and corporate holdings.
On the other hand, what is the current situation of the financial market in terms of potential investors and investments?
It was inevitable that Brexit, the [US-China] trade dispute and the signs of an imminent recession would not leave investors unscathed. Therefore, we can perceive a slight increase in uncertainty across the market as a whole, which will – should the signs of an economic downturn become clearer in the coming months – lead to a reallocation of investors’ investment focus.
In this sense, this means that companies in a sector that is independent of economic cycles – such as the events market – will be given preference over cyclical investments, which generally tend to be negatively affected in times of recession.
“This willingness to pay is what distinguishes this industry and makes it interesting for strategic investors”
What role does Mayland play in the M&A process?
We see ourselves both as consultants and coordinators. Within an M&A transaction, on which we act both on the buyer and seller side, we coordinate all necessary services in order to achieve a successful conclusion of the transaction. In addition to classic sell- or buy-side M&A advice, our range of services also include succession planning, financial advice, company valuation and strategic business development.
There are many in the concert industry who worry about the involvement of external investment companies. Are they right to be concerned?
These reservations about external investment stem from the public debates about the financial sector due to the financial crisis in 2008. Also, various companies have been forced to cut jobs after an investment company had joined them – and even today, some entrepreneurs still face a loss of control when taking an investment on – but this process is anything but inevitable.
While anyone who sells shares in a company loses some control, the manner in which this transfer of control takes place is an important factor that a seller can influence significantly before the transaction is completed – a crucial point at which we come into game and, together with the current owner and management of a company, determine how this transfer should be structured from the seller’s point of view.
There are many understandable motives for dealing with the topic of participation [from the investment sector] from the entrepreneur’s point of view. However, those who are not familiar with participation systems and legal framework conditions should take on professional support, even in the case of a first initial meeting with a potential buyer.
“Companies in a sector that is independent of economic cycles – such as the events market – will be given preference over cyclical investments”
In one sense, AEG, CTS Eventim and Live Nation are investors, too. Aren’t these companies the better investors than those who have little or no industry knowledge?
In terms of strategic fit, these players in the industry are certainly good candidates – concert companies or festivals can benefit from the networks of these companies and partially improve their operative business. On the other hand, these investors usually require a majority stake (usually more than 50% – ie a qualified majority with which they can enforce all strategic decisions), which means that the seller can lose control of his or her festival, at least in the legal sense.
For smaller companies that are looking for a strategic partner, but do not want to give up control over their business, other strategic investors or financial investors may be the better alternative.
Providence Equity, as a financier of Superstruct, is a prominent player in concert takeovers. Do you expect other big players from the private-equity sector to increasingly be interested in the live music industry in the future?
That’s quite possible. However, Providence Equity’s Superstruct vehicle and its managers [including CEO James Barton, ex-Creamfields/Live Nation] are industry experts who know the festival business very well and usually have experience as festival organisers themselves.
This expertise is particularly important in an industry such as live entertainment, because the structures are special and personal aspects play a meaningful role.
However, in addition to Providence, there are many other investment companies with a strong interest in the festival industry.
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Superstruct invests in Parookaville promoter Next Events
London-based Superstruct Entertainment has partnered with Next Events, the independent promoter behind Germany’s largest electronic music festival, Parookaville.
Financial terms of the deal – an “investment and partnership agreement” similar to the one signed with Norway’s Øya Festival last August – were not disclosed, and Next Events’ management team remains in place.
Founded in 2015, Parookaville (85,000-cap.) takes place in Weeze, North Rhine-Westphalia, over three days in July. Its 2019 edition – for which the Weeze Airport site was christened ‘Madness City’ – featured performances from Steve Aoki, Afrojack, Armin van Buuren, Richie Hawtin and Paul van Dyk, and sold out in record time, reporting more than 200,000 visits over the course of the event.
In a joint statement, Bernd Dicks, Georg van Wickeren and Norbert Bergers, co-founders of Next Events, say: “Through our partnership, we will join Superstruct’s network of high-calibre live entertainment brands and businesses, which will create opportunities for us to continue growing Parookaville.
“In just a few years, Next Events has grown Parookaville into one of the leading electronic music festivals on the global stage”
“With our great team, we will remain at the helm for the long term and focus on ensuring that we continue to promote a leading edge experience to our citizens, while staying true to our motto of promoting madness, love and pure happiness.”
James Barton, CEO of Superstruct, adds: “In just a few years, Next Events has grown Parookaville into one of the leading electronic music festivals on the global stage. We are delighted to partner with the team at Next Events and look forward to working together to make Parookaville even more impressive.”
Superstruct Entertainment, backed by private-equity firm Providence Equity Partners, also owns and operates Sziget (Hungary), Flow Festival (Finland), Sónar (Spain) and party promoter Elrow. Its most recent acquisitions are Down the Drain (Northside, Tinderbox) in Denmark and several UK events formerly owned by Global.
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