SFX Gets More Cash

SFX Entertainment has received a financial boost from advertising giant WPP in the form of an investment, the British company announced March 18. The investment is believed to be worth some $10 million.

A few days later, SFX was on the verge of announcing it would buy a 75 percent stake in Dutch festival promoter ID&T for $102 million in cash and stock.

The purchase announcement was expected to be made March 21, according to the New York Times. ID&T owns Belgium’s Tomorrowland festival, which reportedly drew 180,000 last year. It also owns Sensation, an indoor event across 20 countries.

ID&T and SFX previously announced a joint venture to bring Tomorrowland to North America, albeit under a different name – Walt Disney Co. owns the name in the U.S.

“We are aligned with a festival operator who has been doing this for 20 years and has helped define quality and a great experience for fans,” SFX CEO Robert Sillerman told the Times. “It also gives us the global footprint to begin creating the worldwide community of dance fans.”

SFX continues to position itself as a rival to Live Nation for the attention – and money – of EDM fans around the world. It has bought a string of Miami nightclubs as well as dance-focused companies and festivals. Its latest acquisition spree kicked off with the $50 million purchase of download store Beatport.

It takes money and marketing to support those acquisitions, and SFX got a shot in the arm with the WPP investment.

WPP is a $20 billion company that includes agencies like JWT, Grey and Young & Rubicam under its wing, according to the Times.  Sillerman said he plans to build a $1 billion company centered on EDM and he’s well on his way in spending to that end.

Sillerman has also said he intends to use online media through marketing and advertising to connect the EDM market, and the investment certainly aids that goal.

“We recognize the value in what SFX is creating and believe we can help bring this valuable audience to our agencies’ global clients,” WPP CEO Martin Sorrell said.  “The challenge of navigating through digital and social media is daunting for clients and we believe this partnership can further develop WPP’s content capabilities, particularly in new media in the youth consumer segment.”

The investment will help SFX and WPP marketing efforts by focusing on sponsorship and branded entertainment, according to a statement.

“The investment from WPP is an exciting step for us as it underlines what we have believed from the start,” Sillerman said. “There is a huge, global fragmented audience of 16- to 34-year-old dance music consumers that is very difficult to reach.  In developing our global platform, we will be able to offer brands the opportunity to connect directly through events, festivals, online and mobile media.”