DEAG Makes Some Cash
DEAG chief Peter Schwenkow has never been less than bullish about his company’s future – even when it looked as if he had no reason to be – but the recent Q2 figures suggest it’s entering a period of sustainable growth.
During the same period in 2005, the Berlin-based promoter was announcing an EBIT of euro 500,000, which only just covered its Q1 losses, but this year’s figures show that has increased over fivefold with pre-tax earnings up to euro 2.8 million (US$3.6 million).
Preliminary figures show quarterly sales of euro 25.6 million, which is a 27 percent increase on Q2 2005.
The company looks to have risen out of the liquidity problems that have dogged it in the past and seems to embarking on a period of consolidated expansion.
“We love what we are doing,” Schwenkow told Pollstar, commenting on a six-month period that’s seen a few changes in the company’s structure.
The recent move that made the headlines was the departure of Barrie Marshall, who bought back the 50 percent of his company (Marshall Arts) that he sold to DEAG in ’99 and promptly sold 49 percent of it to the U.S.-based
Marshall hasn’t commented on the move, but Schwenkow’s assertion that “generating cash” wasn’t the only reason for the deal suggests their 7-year-old business relationship may have lost some of its sparkle.
The DEAG chairman and chief exec said the two remain friends and will work together in future, although the episode bears the hallmarks of an agreement that was hammered out between all three companies.
At the same time as Marshall’s switch from the Germans to the Americans was made public (July 4th), DEAG and AEG were themselves announcing that they formed a joint venture to expand their venue management interests.
On a personal staff level, it means Marshall and Rob Hallett are back in the same fold after five years.
Hallett worked at Marshall Arts for 10 years before quitting to join
However, the cash involved, which the DEAG Web site reported as being worth a “one digit million Euro amount,” will still help the company pay any fixed-term investors who want cash instead of shares when their bonds mature in the autumn.
Schwenkow has made his bullishness public again by saying the bonds he holds personally will be switched to stock.
When he said, “We love what we are doing,” he might have had an eye on a share price that’s risen from euro 1.3 to euro 1.81 over the last six weeks.
With the news of Marshall’s departure coming a few days before – and therefore having the potential to overshadow – some encouraging results, Schwenkow’s understandably keen to concentrate on the other major changes that have happened at DEAG in the last half-year.
“We’re in a stable position with enough cash and expertise for strong future growth,” he said. “Our partnerships and co-operations with Ticketmaster, Warner Music, Anschutz Entertainment Group and Ringier Publishing in Switzerland [DEAG’s financial partner in Andre Bechir’s Good News] show we’re working with people of the highest possible quality.”
On the live music front, where he appears to be trying to gather a team of top German promoters to rival CTS Eventim’s Medusa Group, he said: “With Johannes Wessels from Music Pool, Klaus Bönisch (KBK Konzerten), Carlos Fleischman (Creative Talent) and Hermjo Klein (Ace Arena Tours) we have strong, experienced and loyal partners for the rock/pop business. And our classical department shows more than 60 percent growth this year and will soon have daughter companies in other territories.”
As for changes in the boardroom, 33-year-old Christian Diekmann has been appointed DEAG’s Chief Operating Officer effective from August 1st.
He was the company’s manager director from 2001 to 2004 and has since acted as a consultant while concentrating on getting his Ph.D.
He also has two years’ industrial experience with Porsche and Volkswagen.
– John Gammon
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