Sunday, April 14, 2024

Robert F.X. Sillerman and the roots of concert consolidation

Robert Sillerman
Robert F.X. Sillerman

“Don’t waste my time telling me how great you are” – Robert F.X. Sillerman, to a banker, not a hip hop artist with the ability to sell a ton of tickets.

Sillerman started the consolidation of the North American concert market with money he made from selling SFX Broadcasting to Austin radio magnate Steve Hicks for $2.1 billion in 1996. That year Sillerman, who pocketed $250 million in the transaction, paid $27 million for Ron Delsener’s East Coast concert business (keeping legendary Delsener aboard as right hand man), then started snapping up just about every big promoter in the country, paying $68 million for Bill Graham Presents, $94 million for Nederlander, $190 million for Houston-based Pace Concerts and so on. Within two years he had spent about $2 billion on 11 regional concert promoters and 82 venues. Everybody in the business thought Sillerman was crazy, paying too much (except for the Delsener deal, which was a steal).

Besides promoters, Sillerman paid “too much” for talent, guaranteeing Rod Stewart $350,000 a show, for instance, more than twice what he was previously making. Sillerman personally negotiated the double bill of Bob Dylan and Paul Simon- two great American songwriters with no love for each other- which netted the pair $250,000 a night each, much more than they could earn separately. It didn’t take long for Sillerman to earn the nickname “the Sam Walton of pop music,” only Sillerman didn’t discount prices, he drove ticket costs (which had long been undervalued- hence scalpers) way up.

Sillerman’s genius, it turns out, was using the loyalty and passion of concert fans as a selling point to corporate sponsors. He packaged magic moments and sold them to national advertisers for millions and millions of dollars. He’s the reason for all the signage and logos you see at festivals today. Sillerman’s background was in radio, as he bought his first two stations in 1978 with “Cousin Brucie” Morrow, so he knew from “demographically desirable consumers.”

In 2000, just four years after he started paying big bucks for promoters and their sheds (amphitheaters), Sillerman sold SFX to San Antonio-based Clear Channel Entertainment for $4 billion. The radio giant’s concert division was named Live Nation in 2005. Five years later, Live Nation and Ticketmaster merged to create Live Nation Entertainment.

Live Nation has been buying up the country’s biggest festival promoters, including a majority interest in Austin-based C3 Presents in late 2014 for a reported $120 million, as well as, more recently, the company that promotes Bonnaroo. The marriage of consolidation and corporate sponsorship was officiated by Robert F.X. Sillerman almost two decades ago.

SFX Entertainment was reincarnated in 2012 as EDM promoters, buying chunks of Tomorrowland, Electric Zoo, Rock In Rio and the online DJ store Beatport.

Here’s more about Sillerman’s acquisition of radio stations and transition into the concert business.


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