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IQ 125 out now: Peter Schwenkow, MVT, Gulf States

IQ 125, the latest issue of the international live music industry’s favourite magazine, is available to read online now.

The February/March edition sees DEAG founder Peter Schwenkow look back over 50 remarkable years as a live entertainment pioneer, while Derek Robertson talks to grassroots venue campaigners around the world as Music Venue Trust marks its tenth anniversary.

In addition, Lisa Henderson talks to female crew members and women backstage about the work they’re doing to pave the way for future generations, and Adam Woods shines a light on the burgeoning live entertainment markets in the Gulf States.

Elsewhere, we profile ten new festivals that are making their debut in 2024, and the full agenda for ILMC 36 is revealed.

For this edition’s comments and columns, IQ passes the mic to Cliff Fluet who previews his ILMC panel Artificial Intelligence: Moving at Light Speed, while ticketing guru Tim Chambers opines that the marriage between private equity and live entertainment has become too big to fail.

As always, the majority of the magazine’s content will appear online in some form in the next four weeks.

However, if you can’t wait for your fix of essential live music industry features, opinion and analysis, click here to subscribe to IQ from just £8 a month – or check out what you’re missing out on with the limited preview below:

 


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Silver Lake ‘locks in $1.1bn TEG dividend recap’

TEG’s owner Silver Lake has secured a A$1.1 billion (€663.8 million) dividend recapitalisation for the Australian live entertainment giant after attempts to sell the company stalled, according to recent media reports.

The Australian Financial Review listed KKR Credit Markets and Singapore government-owned investment firm Temasek as among the biggest backers in a joint proposal alongside The Canada Pension Plan Investment Board (CPPIB), with five lenders signing up overall as part of the debt refinancing package.

A dividend recap happens when a firm takes on new debt in order to pay a special dividend to private investors or shareholders. AFR sources say “the new debt facility includes a $950 million, five-year, covenant-lite loan at a margin of 550 basis points, and a $130 million revolver”.

The AFR describes the move as “a good outcome by any standards” for Silver Lake and co-owner Mercury Capital.

“KKR and Temasek investing together is the type of high-quality creditor you’d want in a debt stack while CPPIB oversees $600 billion in members’ money distributed via the type of global investment programme that AustralianSuper or Aware Super would love to emulate,” it notes.

Silicon Valley-based Silver Lake acquired the TEG Live and Ticketek parent from another investment company, Affinity Equity Partners, in 2019

While Temasek, KKR, Silver Lake and TEG declined to comment to Bloomberg on the report, The Edge Malaysia says the deal – which was locked in just before Christmas 2023 – will give Silver Lake Management a payout after talks to offload TEG proved unsuccessful.

Silicon Valley-based Silver Lake acquired the TEG Live and Ticketek parent from another investment company, Affinity Equity Partners, in 2019 in a reputed A$1.3bn deal and reportedly launched a sales process for TEG last year. However, Silver Lake’s asking price for TEG was believed to be around 50% higher than what the company was valued at by potential bidders.

TEG’s portfolio also includes TEG Sport, TEG Experiences, TEG Dainty, SXSW Sydney, TEG MJR, TEG Van Egmond, TEG Rockefeller, Qudos Bank Arena, Softix, TicketCharge, TicketWorld, Ticketek Singapore and Ovation.

Silver Lake also owns shares in Oak View Group, City Football Group and Madison Square Garden Sports, along with a 71% stake in WME owner Endeavor.

 


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TEG dividend recap mooted as sale talk cools

TEG’s owner is seeking a dividend recapitalisation as an alternative to selling the Aussie live entertainment giant, according to a new report.

Private-equity firm Silver Lake enlisted Jefferies’ bankers to launch a sales process for TEG earlier this year, but failed to agree a sale despite interest from fellow investment companies Blackstone and KKR, reports the Australian Financial Review.

Concert promotion, ticketing and technology firm TEG operates out of seven countries worldwide with offices in Australia, New Zealand, south-east Asia and the UK.

Silicon Valley-based Silver Lake acquired the business from another investment company, Affinity Equity Partners, in 2019 in a reputed A$1.3bn deal.

The AFR says Silver Lake’s asking price for TEG was believed to be around 50% higher than the company was valued at by potential bidders.

“The seller was understood to be seeking a circa $3 billion price tag, while the bidders saw TEG being worth more like $2bn”

“The seller was understood to be seeking a circa $3 billion price tag, while the bidders saw TEG being worth more like $2bn,” it notes. “In addition to the dividend recapitalisation, the possibility of a minority sale was thrown around.”

It adds that Silver Lake has now started “meeting with lenders for a dividend recapitalisation”, and is being advised on the process by Goldman Sachs. A dividend recap happens when a firm takes on new debt in order to pay a special dividend to private investors or shareholders.

TEG’s portfolio includes TEG Live, TEG Sport, TEG Experiences, TEG Dainty, SXSW Sydney, TEG MJR, TEG Van Egmond, TEG Rockefeller, Qudos Bank Arena, Ticketek, Softix, TicketCharge, TicketWorld, Ticketek Singapore and Ovation. Last year, it announced the formation of TEG Europe, consolidating the company’s UK-based operations into a single entity.

Silver Lake also owns shares in Oak View Group, City Football Group and Madison Square Garden Sports, along with a 71% stake in WME owner Endeavor. Last week, it revealed it was working towards a proposal to take the business private.

 


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Providence makes strategic investment in Wasserman

Private equity firm Providence has expanded its music portfolio with a strategic investment in agency giant Wasserman.

Providence’s investment will be used to provide capital to pursue growth initiatives and “fully redeem” RedBird and Madrone Capital Partners, who both exit as investors, while Wasserman chairman and CEO Casey Wasserman will retain a controlling ownership stake. Financial terms were not disclosed.

US sports representation firm Wasserman launched booking agency Wasserman Music in 2021 following the completion of the company’s acquisition of Paradigm’s North American live music business and went on to acquire Paradigm UK’s live music business earlier this year.

Providence, meanwhile, already backs UK-based live entertainment group Superstruct Entertainment, Ambassador Theatre Group and Tait (Towers), and also bought into Sweetwater, the leading US retailer of musical instruments and audio equipment, in 2021.

“There is no better partner to help us accelerate and scale this purpose-driven model than Providence”

“I am incredibly proud of the business, and more importantly the team we have built over the past 20 years,” says Casey Wasserman.

“Our prioritisation of client service and values has resulted in tangible business success and cultural rewards, and there is no better partner to help us accelerate and scale this purpose-driven model than Providence. Their long relationship with our executive management group plus their extensive experience and established investment approach across the sports, media and entertainment sectors, and a shared commitment to culture will help accelerate the next phase of Wasserman’s expansion.”

“Casey and his team have built a global leader and influential force in sports and music talent representation and marketing”

Founded in 2002, Wasserman operates across six continents, 23 countries and more than 40 cities worldwide. Its other recent moves include a significant investment in post-career services for clients through the acquisition of The Montag Group; a strategic focus on marketing to Gen Z consumers through the acquisition of Riddle & Bloom; and a continued expansion into global sports with the launch of Wasserman Rugby.

“Casey and his team have built a global leader and influential force in sports and music talent representation and marketing, and they have balanced their rapid expansion with maintaining a client-first approach and culture that cultivates dedicated, motivated and talented executives and agents,” adds Providence MD Scott Marimow. “Wasserman is a natural fit with our firm, and we look forward to partnering with Casey and the entire Wasserman team to help fuel the company’s next phase of growth and success.”

In July, “purpose-driven global investment organisation” EQT became the latest private equity firm to enter the international touring business by becoming a strategic investor in UTA. Other such companies with live music interests include Silverlake, Yucaipa and Waterland.

 


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EQT latest private equity firm to enter touring biz

EQT has become the latest private equity firm to enter the international touring business, following in the footsteps of companies like Silverlake, Yucaipa, Providence and Waterland.

The ‘purpose-driven global investment organisation’ today (19 July) announced that the EQT X fund has agreed to become a strategic investor in UTA.

Under the transaction, the UTA partnership and leadership continue to hold the controlling interest in the company, with EQT becoming the largest outside shareholder.

Investcorp, a global alternative investment firm that invested in UTA in 2018, will sell its full minority stake to EQT, and EQT will also purchase a portion of existing stakes from continuing shareholders including PSP Investments.

According to a release, EQT’s financial resources, expertise in capital markets, in-house digital team and global footprint will help fuel UTA’s next phase of investments in talent, innovation and international expansion.

Jeremy Zimmer, CEO of UTA, says: “EQT is the perfect partner for UTA’s next phase of growth. They have deep international capabilities, a strong balance sheet, and most importantly they truly appreciate and respect the culture that we have built at UTA.

“David Kramer and I led this process, and we made sure to listen to our instincts about who we felt would really help us drive growth while protecting our culture. We believe that we found the right partner to maintain that balance.”

“EQT is the perfect partner for UTA’s next phase of growth”

Kasper Knokgaard, EQT partner and global head of the services sector team, adds: “EQT invests in industry-leading platforms that are well situated for strong and sustained growth across economic cycles, are aligned with our values, and where we know we can create significant value –UTA checks all the boxes.

“We are excited to partner with Jeremy Zimmer and the entire team to accelerate UTA’s growth trajectory and enable more opportunities across entertainment and media.”

Dave Tayeh, head of private equity – North America at Investcorp, comments: “Our investment in UTA was highly successful and we are proud to have partnered with the UTA team as they achieved exceptional growth over the past four years. The company has strengthened its position as a market leader and we wish the team and EQT continued success.”

Martin Longchamps, MD at head of origination and execution at PSP Investments, says: “Since our original investment in 2018, PSP Investments and Investcorp have been working closely with Jeremy Zimmer and his management team to continue to strengthen UTA’s exceptional market position.

“During this time, UTA has proven its abilities to perform, innovate and diversify as a leading entertainment company. We are excited to continue this journey with UTA and to welcome EQT. Together, we will be a driving force in supporting UTA’s long-term growth.”

EQT has €77 billion in assets under management across 36 active funds. EQT funds have portfolio companies in Europe, Asia-Pacific and the Americas with total sales of approximately €29 billion and more than 280,000 employees.

 


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Patron Technology sold to PE firm Vector Capital

San Francisco-based private-equity firm Vector Capital has acquired Patron Technology, the company behind Greencopper, Marcato and several other familiar event technology products.

Vector, which specialises in investing in established technology businesses, says all Patron staff remain in place and will continue to operate the company on a day-to-day basis. Terms of the deal were not disclosed, but Vector manages nearly US$4 billion worth of investments.

“With Patron Technology, we saw an opportunity to back the leading platform and a seasoned management team as they successfully navigate unprecedented, Covid-induced market disruption in the live events industry,” comments Rob Amen, managing director of Vector Capital.

“Vector excels at investing during volatile times, and our thesis is that only the best products and most talented executives will survive this dislocation and emerge as market leaders. We are confident that our growth investment will enable Patron Technology to not only outlast this global pandemic but become stronger on the other side of it.”

Patron Technology, formerly known as PatronManager, has spent the past few years buying up various event technology companies, including app developers, ticket sellers and event management platforms. Its portfolio includes festival app company Greencopper, event management software developer Marcato, RFID provider Token and ticketing software firms ShowClix, Ticketleap, Ticketbooth and GrowTix.

“Vector excels at investing during volatile times”

The company was formerly majority owned by Providence Equity Partners (whose other live industry investments include Superstruct Entertainment, Tait Towers and Ambassador Theatre Group).

Marc Jenkins, CEO of Patron Technology, says: “This is an exciting and important day in our company’s history. It kicks off a fresh, new partnership alongside the thoughtful investment team at Vector. We are eager to work with them to propel the business through the age of social distancing and beyond.

“I’m extremely proud to be part of such an amazing team, past and present, that works tirelessly to serve our world-class clients.”

“With a great set of products, a strong balance sheet and an unparallelled management team, Patron Technology is well positioned to grow over the coming years,” adds Vector Capital vice-president Tom Smith.

“We look forward to partnering with Marc and his team as they continue to grow from this new position of strength and renewed investment.”

 


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PE firm Yucaipa invests in APA

Less than a month after buying into UK metal agency K2, the Yucaipa Companies, the private-equity group controlled by billionaire investor Ron Burkle, has made a strategic investment in Los Angeles-based APA.

APA, the former Agency for the Performing Arts, is headquartered in Hollywood and has offices in New York, Nashville, Atlanta, Toronto and London. Its roster includes Blondie, House of Pain, Fetty Wap, Nickelback, Azealia Banks, Rodriguez, Lil Xan, Gang of Four, King Crimson, Nick Carter, Doves and 50 Cent.

Yucaipa, meanwhile, has stakes in Paradigm’s European business (including X-ray Touring), Spanish festival Primavera Sound and US promoter Danny Wimmer Presents, and owns Artist Group International.

“Ron Burkle and Yucaipa share our philosophy for disciplined growth”

According to Variety, which first reported on the deal, Burkle’s investment in APA is a non-equity arrangement that sees Yucaipa take on APA debt in exchange for cash. Variety’s sources say the cash influx will allow APA to recruit agents and clients at a time when its corporate agency rivals are furloughing and laying off staff.

“With so much uncertainty in the entertainment industry, we’re very pleased to be collaborating with a person and a company so in sync with our vision for the future of our business,” says APA CEO Jim Gosnell. “Ron Burkle and Yucaipa share our philosophy for disciplined growth, and are 100% behind our strategy to expand upon our core business across all media platforms.”

In other APA news, the agency’s head of talent, Jim Osborne (pictured), has been named president, taking over the role from Gosnell.

 


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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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PE firm Crestview buys a third of ICM Partners

ICM Partners has sold a 33% stake in its business to New York-based investment firm Crestview Partners, becoming the latest major booking agency to take on private-equity investment.

The US$150 million investment from Crestview – whose other holdings include cable TV company Wow! and American Idol/So You Think You Can Dance producer Industrial Media – will “help accelerate domestic and international expansion strategy”, according to an ICM statement.

In partnering with Crestview, ICM joins CAA, WME and, most recently, UTA, in securing investment from private-equity and/or venture-capital funds. CAA is majority owned by TPG Capital, while WME is backed by Silver Lake Partners, Softbank and others. UTA recently sold minority stakes to Investcorp and PSP Investments.

“We are philosophically aligned and excited to take full advantage of the growth opportunities ahead”

“We have always dedicated ourselves first and foremost to our clients and are proud to be a singularly focused representation company,” says ICM managing director Chris Silbermann.

“As our team strategised about growing the agency to be the best it could for our clients, we believed Crestview, with its strong track record of backing media companies, was the ideal partner for us. We are philosophically aligned and excited to take full advantage of the growth opportunities ahead.”

ICM’s music roster includes the likes of Anderson Paak, Migos, Khalid (pictured), Ari Lennox, Boyz II Men, Teyana Taylor, J. Cole and Phantom Planet.

 


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TEG confirms Silver Lake acquisition

Confirming rumours that surfaced last week, private-equity firm Silver Lake Partners announced this morning (4 October) Australian time it has acquired Asia-Pacific live entertainment giant TEG.

Silicon Valley-based Silver Lake, which also holds stakes in Madison Square Garden CompanyOak View Group and WME/UFC parent company Endeavor, acquires TEG from Affinity Equity Partners, another investment firm, which bought TEG in 2015.

Financial terms of the transaction were not disclosed, though reports in the Australian financial press value the deal at around A$1 billion (US$675 million).

Sydney-based TEG’s live entertainment platform combines ticketing and event promotion, venue management, data analytics and marketing services. The company organises over 100 events annually through TEG Live and TEG Dainty, which have promoted shows including Hugh Jackman, Guns N’ Roses, Eminem, Katy Perry, Cirque du Soleil, Jerry Seinfeld and the Australian debut of Intel Extreme Masters esports.

The company is the parent of one of Australia’s “big two” ticket sellers, Ticketek, which sells 30m tickets annually, and also made moves into the European market earlier this year, acquiring UK-based promoter the MJR Group.

“The team at Affinity have been great partners for us over the last four years and have helped us to continue to scale our business,” says TEG chief executive Geoff Jones, commenting on the buy-out. “We are confident that Silver Lake is the right partner for the next stage of the company’s growth.

“High-quality live sports and entertainment content is more sought after now than ever, and represents a massive global addressable market”

“Silver Lake brings us deep technology expertise as well as important global entertainment content and live events expertise and relationships which will help us to accelerate the growth of our platform globally.”

Adds Silver Lake managing director Stephen Evans: “High-quality live sports and entertainment content is more sought after now than ever and represents a massive global addressable market for the company.  We believe TEG’s innovative and integrated ticketing, content, digital marketing and analytics platform is well positioned to continue to benefit from increasing consumer demand worldwide.

“We’re excited to partner with Geoff and the entire TEG team and invest further to leverage TEG’s platform and accelerate the company’s growth, both in Asia Pacific and globally.”

The transaction is expected to close later this year, subject to conditions including approval by the Australian Foreign Investment Review Board.

Read IQ’s recent exclusive interview with Jones (pictured), in which he discusses TEG’s plans for European growth, here.

‘Our main focus is the UK and Europe’: TEG boss talks MJR buy


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