Live Nation To Buy Stake In Insomniac Events
Live Nation Entertainment is close to finalizing a deal to acquire about a 50% stake in Insomniac Events for $50 million, according to people familiar with the matter.
Insomniac Events, which produces electronic-dance-music festivals and is known for its Electric Daisy Carnival, which drew more than 300,000 fans to Las Vegas last year, would be a coup for Live Nation, the nation’s biggest concert promoter.
Live Nation had been competing over the past year with bidders including SFX Entertainment’s Robert Sillerman, who has helped consolidate both the radio and live-entertainment industries and has been snapping up a variety companies that specialize in DJ-driven music called EDM.
Live Nation and Insomniac each declined to comment.
SFX had offered at least $100 million for Insomniac, according to people familiar with the matter. Behind the fight over Insomniac is a scramble to capitalize on the growing popularity of EDM as technology drives interest in music created on computers rather than traditional instruments.
A growing number of DJs now garner rock-star salaries and headline festivals where just 10 years ago they were eclipsed by singing, guitar-playing bands.
Insomniac keeps its books private, and founder Pasquale Rotella was quoted in Billboard Magazine last year as saying that his company comes “very close to losing money” despite selling out most of its events.
Mr. Rotella has faced controversy stemming from drug-related deaths of concert-goers that attended the events. The Los Angeles Times reported earlier this year that at least 14 people who had attended Insomniac events died in drug-related incidents since 2006.
Mr. Rotella has supported new safety measures at venues such as increasing law enforcement at festivals, warning fans about drug dangers on event websites and displaying emergency services text numbers at events.
He is under indictment on bribery and other charges in connection with raves at the Los Angeles Coliseum and adjoining Sports Arena, where county prosecutors allege he conspired with a partner to keep security costs down by making illicit payments to a stadium manager. They have pleaded not guilty.
Despite its troubled history, Insomniac has a strong brand, and the ability to attract hundreds of thousands of young fans to its rave-like events.
The Electric Daisy Carnival has been held in California, Colorado, Florida, New York, New Jersey, Texas and Puerto Rico, and tickets quickly sell out.
Insomniac also bolsters Live Nation’s growing EDM portfolio: The concert-promotion giant last year acquired Los Angeles-based dance-music-event promoter HARD Events, as well as Cream, a British company that hosts club nights in Ibiza and Creamfields festivals around the world.
Joining with a corporate giant doesn’t appear to jibe with the image Mr. Rotella has cultivated. At a conference he organized last summer, Mr. Rotella said he didn’t want to be a promoter. “My passion is not selling tickets and making money. I want to create an experience,” he said.
Supermarket magnate Ron Burkle, who recently entered a partnership with Cirque du Soleil founder Guy Laliberte to operate music festivals and nightclubs around the country, had considered buying Insomniac Events three years ago for a lower valuation, according to a person familiar with the matter, but decided to pass.
