AEG Facilities and SMG, the two biggest players in the management of sports and entertainment venues, announced today they have formed a definitive merger. The name of the new entity is ASM Global.
Financial terms were not disclosed. AEG Facilities and Onex, a private equity firm that acquired SMG for $1 billion in 2017, will each own 50 percent of the new company.
All told, between the two companies, the agreement covers more than 300 facilities worldwide, including multiple NBA and NHL arenas and six NFL stadiums.
Bob Newman, current president of AEG Facilities, will be named president and CEO of ASM Global. Wes Westley, SMG’s CEO, will join the new firm’s board of directors. Wesley will retire pending completion of the merger, SMG officials confirmed.
Newman and Westley declined comment.
The agreement covers venue management services, plus content provided by AEG Presents, the world’s second-biggest concert promoter, and AEG Global Partnerships. Those two subsidiaries will operate across all ASM Global properties, sources said.
In addition, SMG, through senior vice president of entertainment Jim McCue, brings its own content division to the table.
On its own, AEG retains ownership of its venues and entertainment districts in Los Angeles, including Staples Center and L.A. Live, as well as London, Hamburg and Berlin.
The transaction is subject to regulatory approvals. Competitors in the facility management space include Spectra, VenuWorks and Oak View Group, parent company of Pollstar and VenuesNow.
“Our lawyers are studying this and we’ll let them figure out whether this is anti-competitive,” said Tim Leiweke, Oak View Group’s co-founder and CEO.
“That said, we have a different model and I’ll let OVG’s progress in the next few months speak for itself,” Leiweke said. “The big question here will be if this is an antitrust issue.”
The announcement came as a surprise to industry observers, but one veteran facility manager could see it coming after SMG went through a sales process two years ago. Officials with Live Nation, which attempted to acquire SMG in 2017, would not comment.
“We know that Live Nation was attempting to [buy SMG] in 2017 and it ended up not happening,” said Brad Mayne, president and CEO of the International Association of Venue Managers, a trade group representing public assembly facilities.
“It’s interesting, you’ve got companies that have changed ownership and you’ve got owners that are hungry for growth in their organizations. It doesn’t surprise me something like this took place,” Mayne said. “Having done business development for private management firm Ogden back in the day, it’s a smart move to bring two of the behemoths together. As it relates to competition, it gives you more leverage to go after open accounts and renew accounts. It will be interesting to see what the organization is going to look like as they merge the two together.”
A key question is whether ASM Global continue AEG’s business model of investing money in facility development. SMG, by comparison, historically has not put equity into arenas, stadiums and convention centers. Instead, its model is tied to collecting management fees to run those venues.
“OVG entered into managing facilities as well as putting their own equity in the venues and diversifying by offering services similar to what Tim [Leiweke] did with AEG,” Mayne said. “Obviously, it caught the attention of the industry. There’s a lot of benefits to having control over the project from start to finish.”