HoB lowering curtain on subsid
House of Blues Entertainment may put a for-sale sign on its concerts division.
Global financial services firm UBS has been hired to assist in evaluating the potential sale of company subsidiary House of Blues Concerts, which is the second-largest concert promoter in the U.S., trailing only Clear Channel Entertainment.
A number of entities have pitched serious offers to House of Blues over the past year, and UBS will determine “whether we’ll have further conversations,” according to Greg Trojan, CEOof House of Blues Entertainment.
Trojan would not supply financial details on offers nor say where they were coming from, revealing only that “some are (other promoters), some aren’t.”
House of Blues Concerts owns and operates 10 venues, including the Universal Amphitheater, and has exclusive booking rights in 10 more. Subsid was created when HoB acquired Universal Concerts from Seagram for $190 million in September 1999.
“There are a lot more clubs to be built than amphitheaters,” Trojan said. “We still like running the venues, but we owe it to our shareholders to listen to offers.” House of Blues, created in 1992, is privately held and gained $110 million in recapitalization in May.
A decision on whether to sell should be made in early February, Trojan said. If it does shed the concert biz, House of Blues expects to continue booking some small theater shows — 2,000-3,000 seats — but would be out of the amphitheater and arena business. HoB currently books in 16 venues in California, for example, to which it does not have exclusive rights.
At the time House of Blues took the leap into the concert business beyond its club venues, it became No. 2 beyond SFX, which would soon sell to Clear Channel. Unlike Clear Channel, House of Blues has aggressively marketed its brand to draw audiences to its venues; in the past year, 50% of all House of Blues tickets have been sold online via HoB.com.
Trojan said the timing of the sale had nothing to do with the overall summer slump in the concert business.
“When priced right and aggressively marketed, people show up,” he said. “We still saw some impressive numbers this summer.”
House of Blues’ clubs, venues with a capacity of between 1,000 and 2,000, are located in New Orleans; Los Angeles; Chicago; Myrtle Beach, S.C.; Orlando, Fla.; Las Vegas; Anaheim, Calif.; and Cleveland, where a club just opened. A San Diego venue is slated to open in May; a Detroit site is slated for later in the year.