For the international contemporary live music industry

Man who changed the world as we knew it – Obituary

UNITED STATES               -
World News
December 16, 2019

HE ADMITTED he knew nothing about the concert business, but Robert FX Sillerman, who died on 26 November aged 71, knew about finance, acquisition and amalgamation.

He saw a fragmented music industry and, as he had done with US radio stations, an opportunity to build an empire, mould it together and hopefully sell it for a handsome profit.

In that aim, Sillerman succeeded spectacularly on first attempt, and his legacy is a globally transformed live music industry and multi-faceted behemoth Live Nation Entertainment, 

In 1997, still involved in radio with his SFX Broadcasting, Sillerman formed a subsidiary, SFX Entertainment, to focus on buying promoters and venues across America. His then partner, Steve Hicks, couldn’t see the symmetry between fixed radio stations and consolidated playlists, and the vagaries of live entertainment, so bought Sillerman’s radio interests.

An unfettered SFX Entertainment raised more than $2 billion and spent three years rolling-up major players across the US, Canada and into Europe.

Among purchases were US companies such as Delsener/Slater Enterprises, acquired for $26.8 million, Bill Graham Presents ($80.3m), Pavilion and PACE Entertainment ($240.7m), Don Law Company ($92.2m) and Cellar Door ($98.5m) 

In Europe, acquisitions included the UK’s Apollo Leisure Group and Barry Clayman Concerts for $254m, Sweden’s EMA Telstar ($27.9m) and the Netherlands’ Mojo Works/Mojo Concerts (80 per cent for $39.7m).

Sillerman also saw a bigger picture and acquired marketing companies and sponsorship brokers to exploit the potential of his burgeoning portfolio of venues and live events. More venues and events meant more people for sponsors to reach.

In 1999 alone, SFX concluded sponsorship deals worth $70m, up $30m on the previous year.

Company figures for 1998 claimed 58 million people attended 24,800 single events promoted and/or produced by SFX, including over 9,750 concerts.

The sell-off

At the end of the usual three-year turnaround for a venture capitalist, when the enterprise has been puffed-up as much as possible, Sillerman sold SFX Entertainment to radio stations and billboards giant Clear Channel Communications(CCC) for $4.4bn, making himself a reported $250m profit.

CCC didn’t have Steve Hicks’ doubts about radio and live – the company thought each could naturally promote the other.

Although his creation then lost value at an alarming rate, with Live Nation eventually spun-off five years later with around $400m of debt, he had transformed the live music business and there was no going back.

Sillerman got involved with other activities linked to entertainment, but in a second sortie into the world of promoting and festivals in mid-2012 , with a reincarnated SFX Entertainment, came unstuck.

Electronic dance music events were exciting and pulling large crowds around the world, but the sector was inherently unstable from a corporate standpoint.

Spending more than $1bn in a year, Sillerman acquired companies such as the Netherlands’ ID&T, with its Tomorrowland and Mysteryland (both 60,000) events and brands.

By April 2012, SFX was feeling the strain and its share value fell 20 per cent, after its 2013 accounts showed a net loss of $119m on revenue of $175m  But the roll-up continued.

In June 2015, Sillerman and his board tried to take the company private, but shareholders rejected the deals offered.

Eight months later, SFX filed for Chapter 11 bankruptcy protection and by December 2016, with various assets sold-off to raise money for creditor, a reconstruction emerged in the form of LiveStyle.

Sillerman was the most ambitious business player the live music sector has experienced and, despite his lack of interest in the core product, music, he dramatically transformed the industry and put a value on businesses that had largely been founded by music enthusiasts who had just got bigger.

Sillerman FX certainly left his mark in our world and if there is life after death, you can be sure he’s already looking for potential acquisitions for his next adventure.

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