SFX Broadcasting has acquired Pace Entertainment. With the stroke of a pen, the $130 million deal makes SFX the industry’s leading promoter and producer of theatrical shows and motor sports events, as well as an owner or manager of the largest network of amphitheaters in the U.S.
The pact had been anticipated (Daily Variety, Dec. 6) and continues SFX’s fast-track expansion into the live entertainment business begun last year and thrown into high gear earlier this month with a quartet of expensive acquisitions.
SFX now counts among its holdings 42 venues in 22 markets and puts it in rarefied air once occupied by Pace and Universal, the latter of which has the construction of a trio of venues in the works, but now owns just 14.
The New York-based Pace, which presented and produced more than 5,000 events that attracted 14 million people in 1997, is also a principal in Pavilion Partners, an outfit jointly owned by Pace, Blockbuster Entertainment and Sony Music Entertainment. Pace’s share of the 11 venues owned and operated by the triumvirate now falls into SFX’s portfolio.
Deal adds to war chest
While industry insiders admit they are pleased that a highly regarded businessman like SFX chairman Robert Sillerman has recognized the value of the concert promotion industry, they privately express concern over the consolidation in the industry in the wake of the SFX deals and how it could further drive up the already rising cost of talent.
Because each firm bought by SFX owns or operates venues, it conceivably will permit one-stop shopping for acts and shows who can negotiate a national roadshow deal while ostensibly omitting the middleman: the regional concert promoter and/or venue owner.
On Dec. 15, SFX completed the acquisition of a trio of the concert industry’s top promoters, including Contemporary Group and the venerable Bill Graham Presents. It also nabbed industry publisher/research firm Network Magazine Group (Daily Variety, Dec. 16).
The $230 million deal was partially funded by the August purchase of SFX’s radio station holdings by Capstar Broadcasting and investment firm Hicks, Muse, Tate & Furst, which ponied up $1.1 billion for its 71 radio stations.
1998 bow planned
SFX said it will bow SFX Entertainment sometime in 1998, a spinoff of its live entertainment business from its broadcasting core. It will be run by SFX’s current management and Sillerman. Pace chairman/CEO Alan Becker is expected to remain in that firm’s post. (SFX has been inking long-term employment pacts with the principals of the acquired companies.)
SFX’s shopping spree began last year with the acquisition of Delsner/Slater Enterprises, a promoter for many major concert venues in New York, and leading Midwestern concert promoter Sunshine Promotions.