Robert F.X. Sillerman’s SFX Entertainment Inc. announced Monday that it has agreements to buy five sports and entertainment firms, including Chicago Bulls star Michael Jordan’s representation, for a total price of $227 million.
The megadeal’s obvious highlight is Falk Associates Management Enterprises (FAME), which represents Jordan, the New York Knicks’ Patrick Ewing and three dozen other NBA members. The 6-year-old sports manager and marketer, which counts Nike Inc.’s “Air Jordan” concept among its many achievements, is going to SFX — historically a promoter, producer and venue operator — for $100 million.
New England concert promoter Blackstone Entertainment is getting about $80 million, while its Los Angeles counterpart, Avalon Attractions, has agreed to be bought for $27 million.
That leaves the Oakdale Theater of Wallingford, Conn., — both the original dome facility and the indoor 4,800-seater, for which SFX will pay $12 million — and Event Merchandising Inc., a seller of caps, T-shirts and other merchandise that has long-term contracts with 26 North American amphitheaters, including 13 already controlled by SFX Entertainment. SFX’s 80% stake in Event was valued at $8 million.
Last August, Sillerman struck a $2.1 billion deal to sell the publicly traded SFX Broadcasting radio group to a unit of Hicks, Muse, Tate & Furst Inc. While awaiting the consummation of the buyout later this month, SFX Broadcasting, which was 15% owned and completely controlled by Sillerman, and SFX Entertainment, which is in registration for a secondary offering, have been trading as separate entities.
Also reported on Monday was SFX Entertainment’s bid to acquire Marquee Group, the New York-based sports management and marketing consultancy in which Sillerman already has a 9% stake. Marquee acknowledged the proposal Monday and said it had formed a committee to weigh it against other alternatives.
As SFX Entertainment’s executive chairman, Sillerman designated each addition “an important strategic step.” The three venue operators — Don Law, Avalon and Oakdale — were cited for their “synergies” with SFX’s core business, Sillerman explained, while EMI, which SFX has long known as a “supplier,” was deemed a “natural expansion.”
FAME, a true departure for SFX Entertainment, was heralded by Sillerman as “a significant entry point for us into the high-growth sports entertainment business, an area of striking similarity to our other live entertainment interests.” Cited among FAME’s achievements were its repping an unprecedented six first-round NBA draft picks, its negotiating more than $400 million for free agents and its engineering four of the five largest deals in sports history.
SFX stock closed up 10%, at $39.38.