Live Nation is close to finalizing a deal to buy a 50% stake in EDM promoter Insomniac Events, according to a report in the Wall Street Journal, which cited people familiar with the deal.
This information, including the speculative numbers (which valued this “about 50% stake” at $50 million), has been circulating throughout the music industry for months, with chatter peaking since Live Nation rival SFX Entertainmentinitially got in bed with Insomniac rival ID&T in January, eventually acquiring 75%of the Tomorrowland promoter (which was valued at $130 million total) in March. The first U.S. edition of the hit Belgian festival, dubbed TomorrowWorld, is set for September 27-29 in Atlanta.
In the past several weeks, Insomniac CEO Pasquale Rotella has reportedly been spotted with Live Nation president/CEO Michael Rapino at several events in Los Angeles. Live Nation failed with Identity Festival and are looking to secure their position in the market. The ownership stake in Insomniac is a perfect match.
What Rotella and Insomniac have had issues with in the past are legal problems. From bribery allegations a the L.A. Coliseum to be called out by the LA Times, Rotella can’t seem to get away from the people who want to label us all as drug fueled ravers.
Live Nation has the backend to support whatever kind of expansion Insomniac plans. They own venues across the world (full list), the House of Blues chain in America and not to mention distribution through Ticketmaster as well. More importantly, Live Nation has the high level relationships in place and legal team to support Insomniac in whatever market they choose to enter.
In 2012, Live Nation did $5.8 billion dollars in revenue (Billboard). They could have easily purchased Insomniac entirely, but instead they’re taking an equity stake in the company, this isn’t a buyout.
Live Nation has a vested interest in Rotella’s success and must believe in his vision.
So instead of worrying about the Electric Daisy Apocalypse, be happy that Pasquale Rotella was able to find a company that supports Insomniac and will provide the means for them to grow.
Gary Richards, founder of HARD Events, on working with Live Nation after being acquired,
“Everything that we do is going to stay the same. I just have more resources to work with – more people to help me produce the festival, help me with finances, taxes, contracts – all the stuff that you gotta deal with when producing large shows.
That’s not what I want to really be doing so by working with Live Nation, I can go out and be more creative and do more of the fun stuff and not have to get bogged down with a lot of that nonsense. Everything will still come out of my head; they are just going to help me piece it together a lot more efficiently and run it a lot better.”
Richards says Live Nation will make HARD more efficient than ever: “Before we had an old Chevy and now we have the Ferrari that’s rolling on all cylinders.” via Billboard