Marshall Switches DEAG for AEG

Barrie Marshall has bought back the half of the company he sold to the Berlin-based DEAG in 1999 and immediately resold most of it to Anschutz Entertainment Group.

It wasn’t possible to get comment from London-based Marshall Arts or AEG‘s Los Angeles headquarters at press time, but DEAG chief Peter Schwenkow said “generating cash” wasn’t the only reason his company sold its interest, prompting speculation that he and Marshall’s close business relationship had its best days behind it.

He said they remain friends and will likely work together again in the future, but the deal, which was announced the same day as DEAG revealed its German joint venture with AEG, looks to be the best solution for all three companies.

It provides DEAG with the liquidity to pay any bondholders who prefer receiving cash to shares when their investments mature. It also gives AEG a stronger foothold in the U.K. – reuniting Marshall Arts with former director (and current AEG senior international VP Rob Hallett) – and leaves the U.K. company free of its ties with Berlin.

Hallett worked at Marshall Arts for 10 years before quitting to join Mean Fiddler Music Group in 2001, moving on to AEG at the beginning of 2005.

Details of the deal haven’t been made public but the Investor Relations page of the deag.de Web site described the sale of 50 percent of Marshall Arts back to the original owners as being worth a “one digit million Euro amount.”

It also said Marshall immediately sold 49 percent of the company to AEG, meaning he’s a 51 percent shareholder in the new venture rather than having a 50-50 relationship with DEAG.

Schwenkow’s insistent that paying off the bondholders won’t use up all of that cash, leaving some for further acquisitions on the lines of the recent buy-out of Frankfurt-based promoter Hermjo Klein’s ACE Arena Tours.

The 1 million or so redeemable bonds Schwenkow personally holds will be switched to shares, which the German market appears to be seeing as a huge vote of confidence in his own company as DEAG shares have gone up from euro 1.3 to 1.71 since the announcement.

He said the sale of Marshall Arts doesn’t mark the end of his company’s involvement in the U.K. market, and expects to announce a strategic partnership with another major promoter within a few weeks.

– John Gammon