Robert Sillerman 1948-2019: My Surreal Day With The Man Who Changed The Live Business

Robin Marchant / Getty Images – History Repeats:
Robert F.X. Sillerman (right) and Afrojack (left) rang the Nasdaq closing bell on Oct. 9, 2013, in New York’s Times Square as SFX Entertainment’s second go-round as an electronic dance music company raised some $260 million in its IPO.

My most surreal day as a music business journalist was spent with the late Robert F.X. Sillerman and the Dutch DJ Afrojack at the Nasdaq stock exchange in New York City, where the odd duo rang the closing bell and then flipped the bird at photographers. It was Oct. 9, 2013, and for the second time, the audacious Sillerman, who profoundly changed the live music business, was taking SFX Entertainment public. This time, however, he was diving head first into the world of electronic music. Unfortunately – or fortunately, depending on your point of view – this IPO wouldn’t have nearly the same impact his first version of SFX did some 15 years earlier. Not even close.

When the first iteration of SFX Ent. had its IPO in 1998, Sillerman had already built a radio empire (begun with famed New York radio DJ Bruce “Cousin Brucie” Morrow) and had flipped it to Capstar for $2.1 billion, and he was trying to buy every major regional concert promotion company he could get his moneyed hands on. These companies had been led by concert industry legends like Ron Delsener, Bill Graham, Louis Messina, Jack Boyle, Larry Magid, Don Law and Chuck Morris – affectionately referred to as “pirates” – who had come up in a rough and tumble live business where bags of cash, suspicious powders and weapons at settlement weren’t entirely unknown.

In 1996, Sillerman picked up his first music promoter, New York-based Delsener/Slater Enterprises, which was initially thought of as a complement to his radio holdings. But then SFX went deeper into the live business, acquiring the more diversified Sunshine Promotions for $64 million in 1997 and Hartford Connecticut’s Meadows Music Theatre for $32 million soon after. The company launched its SFX Concerts division and rolled up Alex Cooley’s Atlanta-based Concerts/Southern Promotions for $17 million. By 1997’s end, SFX had acquired St. Louis-based Contemporary Productions for $91 million, Bill Graham Presents for $65 million, Network Magazine Group/SJS for $70 million and Gary Becker’s Houston-based PACE Entertainment (where Messina and Bob Roux both worked) for $130 million. SFX went public in April 1998, but those weren’t the final rollups.

By August 1998, Sillerman had added Boston’s Don Law Presents ($71 million), D.C.’s Cellar Door Productions ($106 million) and Avalon Attractions ($27 million). The next year, he picked up Michael Cohl’s The Next Adventure for an undisclosed amount. By 1999, SFX had spent more than $2 billion and owned or operated 120 venues.

At Pollstar’s February 1999 Concert Industry Consortium (the precursor to Pollstar Live!), Sillerman addressed the live industry for the first time. “In the words of Godzilla: Size is good. Size matters,” said Sillerman, according to Dean Budnick and Josh Baron’s book “Ticket Masters.” “There has to be a market leader in every business segment. And how you handle being that market leader – you either make things better for all your constituencies or you are abusive, or some combination – there’s no question in my mind and in the minds of 99% of the people that we’re making things better. I respect the fact that other people will be concerned about it. We have plenty of competition.”

At the time, some were upset Sillerman wasn’t specific about his intentions and operational plans for his live businesses. Then, roughly a year later, Sillerman sold SFX to Clear Channel Communications in February 2000 for a cool $4.4 billion. The live business would never be the same.

“The impact Sillerman had on the live business cannot be overstated,” said Ray Waddell, President of OVG Media & Conferences (which oversees Pollstar) and longtime live music business journalist, who had a front row seat to Sillerman’s 1990s rollup. “I was in the thick of it at the time, seemingly breaking a story about a new promoter acquisition every week, or more. It was like a hurricane blew through the business. Speculation and rumor were rampant. Nobody really knew what was happening, but everybody for sure knew that live as they knew it was over.

“Valuation on promoters and concert promotion companies historically was a moving target at best: They were only worth what they hoped they could do in the coming year, based on past success, and huge variables, including weather, the economy, fickle fans and the unpredictability of rock stars,” Waddell continued. “When promoters like Cellar Door and PACE got into the real estate game by building amphitheaters, that brought some reality to the equation, and those were the promoters that Sillerman primarily focused on. Silverman paid double digit multiples of an already optimistic valuation. Everybody was talking about the check. Who would get the next check? He made millionaires out of people who maybe were betting their house on a concert the week before.”

Henny Ray Abrams / AFP / Getty Images – Every Picture Tells A Story:
Robert Sillerman (right) and Rod Stewart at the New York Stock Exchange in June 1999.

Waddell pointed out that a confluence of events dramatically changed the live business’ stature. “The recording industry was being upended by piracy and Napster while the touring industry was being completely disrupted and the recorded content business went into a death spiral,” he said. “Suddenly, the live business, unpredictable as it was, asserted itself as ‘where the money is’ in the music business. Live went from being the stepchild of the music industry and the last seat at the table to being the leading revenue producer and focus of career building, and Sillerman’s consolidation helped legitimize that whole transition.”

Indeed, much of today’s corporatized live business traces back to SFX. The colorful pirates were replaced by, or sometimes transformed into, men in suits answering to boards, buying national tours, negotiating sponsorship deals, creating synergy, strategizing M&As and letting corporate communication departments handle the press – little of which existed before.

Ticket prices also rose – 82% between 1996 and 2003, according to “Ticket Masters.” Clear Channel spun off Live Nation in 2005, and, in 2010, it merged with Ticketmaster to become the most dominant business the industry has ever seen. Say what you will about corporate consolidation, 21 years later, the live industry has expanded exponentially, with more artists making more money performing for more fans who are seeing more concerts than ever.

What made that day in 2013 with Sillerman at Nasdaq’s Times Square headquarters so surreal was that he was rolling again. This time he would acquire or partner with EDM players including Disco Donnie Presents, Life in Color, Europe’s ID&T (Tomorrowland, TomorrowWorld and Mysteryland), MMG Nightlife (Miami’s LIV at the Fontainebleau Miami Beach and Story) and Made Event (Electric Zoo). For an estimated $50 million, SFX picked up Denver-based electronic music media platform Beatport.

It was wild to see Sillerman and the Grammy-winning Afrojack ring the stock exchange’s digital bell. Nearby execs included SFX vice chairmen Sheldon Finkel and Mitch Slater, and David Massey, then head of Afrojack’s label, Island Records. Ebullient, supremely confident and even a bit punk-rock, Sillerman posed for pictures and flipped the bird. Not something you’d expect at a corporate temple like Nasdaq.

At the time, Sillerman had health issues. An ailment made his voice gravelly and difficult to decipher, but he was affable, charismatic and clearly in his element at the center of the corporate storm. After taking pictures in Times Square, he invited me to a festival in Brazil on his jet; a month later, SFX picked up a 50% stake in the Rock In Rio Festival. As surreal a scene as this was, Sillerman’s assuredness and enthusiasm were contagious. It was easy to believe that this business impresario, who had changed this business once before, would do it again.

When I asked Sillerman, then 65, about the SFX stock dropping nearly 8.5% from its IPO, he was steadfast, saying he’d been through “nine or ten” IPOs. (He’d previously led CKX, Inc. – short for “Content Is King” – which bought Simon Fuller’s 19 Ent., including “American Idol,” and the rights to Elvis Presley and Muhammad Ali’s images.) “My job is to do the best possible job to bring this music and cultural phenomenon to as broad [an audience] as effectively as possible,” he said. “The stock price will take care of itself.”

This time that “cultural phenomenon” never quite materialized. In February 2016, SFX declared bankruptcy, which followed a year where Sillerman had abandoned a private takeover bid and the company’s stock had plunged by more than 95 percent. There was clearly a difference between rolling up regional live promoters with deep histories and acquiring newer dance music promoters and foreign festivals, which didn’t necessarily have the proofs of concept the live business “pirates” had established over decades.

In “Ticket Masters,” Sillerman, who died Nov. 24 at age 71, considered his place in history. “I want people to think that our generation, and me as an example of it, changed the world,” he said. “Because we did, make no mistake about it. We did change the world, and those of us that went into commerce recognized that we had a continuing responsibility to perpetuate that methodology.”

In the next paragraph, Contemporary Productions promoter Steve Shankman disagreed. “He may have changed the horizon, but he’ll never go down in the history books,” he said.

Years later, while many will debate Sillerman’s positive and negative impact on the concert business, his influence is indisputable.