Printer Friendly
The Free Library
23,403,340 articles and books


SFX Entertainment Announces Five Major Acquisitions.

NEW YORK--(BUSINESS WIRE)--May 4, 1998--SFX Entertainment, Inc.(NASDAQ: SFXE) today announced that it has agreed to acquire five separate companies in the sports and entertainment field for a total consideration of approximately $225 million. SFX will acquire Falk Associates Management Enterprises ("FAME"), a sports representation and marketing firm for approximately $100 million. FAME is the country's leading representative of National Basketball Association players. SFX Entertainment has also reached agreement to acquire Blackstone Entertainment ("Don Law") for approximately $80 million. This company is managed by Don Law, a leading concert promoter in New England, with its primary focus on metropolitan Boston. The third acquisition is Avalon Attractions, a major concert promoter operating in greater Los Angeles, which the company has entered into a letter of intent to acquire for approximately $27 million. Further expanding its interests in the Northeast, SFX has also agreed to acquire The Oakdale Theater, located in Wallingford, CT, for approximately $12 million. Finally, the company has announced its agreement to acquire an 80% interest in Event Merchandising Inc. ("EMI"), a leading merchandising contractor for many of the country's top amphitheaters, for approximately $8 million.

FAME was founded in 1992 by its CEO, David Falk, and its President, Curtis Polk. It has a client list that includes an all-star roster of some of the leading players in the NBA (see attached for complete list). Recently, FAME represented an unprecedented 6 first-round draft picks in the NBA, negotiated over $400 million in contracts for its free agent clients and negotiated 4 of the 5 largest contracts in team sports history. FAME also manages stars from other sports including football. In addition to contract negotiation, the company has been a pioneer in the area of endorsement marketing, originating the concept of "Air Jordan."

Don Law is a leading concert promoter in New England where it owns and operates the Great Woods Center for the Performing Arts, a 20,000 seat amphitheater between Boston and Providence. Great Woods has consistently been one of the country's top amphitheaters in both financial performance and artistic preference. In recent years, the facility has averaged approximately 60 shows annually with over 600,000 in attendance. Additionally, Don Law operates the Harborlights Pavilion, a 4,600 seat venue in Boston and the Orpheum Theater, a 2,800 seat facility specializing in theater production and smaller concert acts. The company also promotes other shows throughout the region, recently averaging over 160 events each year. Included in the acquisition is Next Ticketing, which is the sole ticketing operator for all Don Law events as well as for several third party venues.

Avalon Attractions is a premiere promoter in Los Angeles and frequently extends its activities to promote major tours, such as the Rolling Stones and U2, throughout the Southwest. It is in a fifty-fifty partnership with Pace Entertainment, a current SFX Entertainment subsidiary, operating the 15,000 seat Irvine Meadows Amphitheater and the 25,000 capacity Glen Helen Amphitheater. Avalon also co- promotes shows at the LA Forum, and it has a long-term exclusive agreement to present commercial events at the Thousand Oaks Performing Arts Center. Avalon has also secured the rights to build a 16,000 seat amphitheater serving the area north and west of Los Angeles.

The Oakdale Theater includes a new state-of-the-art 4,800 seat indoor facility specializing in both concerts and live theater presentations as well as an original dome facility that has held concerts in the round for many years. The new theater, which was opened in mid-1996, was designed to emphasize ancillary revenue opportunities with luxury box seats, platinum club facilities and specially designed sponsor suites built into the original construction. In 1997, paid attendance was approximately 385,000 with recent presentations including Lord of the Dance, Rugrats and Leann Rimes. The original facility remains a popular presentation venue for trade shows and corporate events.

EMI, one of the leading merchandising contractors in the country, has long-term contracts with 26 leading North American amphitheaters. Among the many prestigious venues where EMI has merchandising deals are the PNC Bank Arts Center, Hollywood Bowl, Jones Beach Marine Amphitheater and the Irvine Meadows Amphitheater, as well as 13 other SFX controlled venues.

Commenting on the transactions, Robert F. X. Sillerman, Executive Chairman of SFX Entertainment, Inc., said, "Each of these acquisitions represents an important strategic step for the company. Our acquisition of FAME is a significant entry point for us into the high growth sports entertainment business, an area of striking similarity to our other live entertainment interests. FAME is a leader in this rapidly growing new arena where sports and entertainment are married, creating significant marketing and promotion potential available for any corporation seeking unique, high-profile brand recognition. David Falk and his team, especially, have expanded the boundaries of endorsement possibilities, where whole new products can be created on the strength of the marketing image of their star clients. We believe that this addition to our product line of entertainment events serving as marketing delivery vehicles not only strengthens our position as a marketing medium but also helps to diversify our base of assets. This is an area we have certainly been interested in for some time, and we will continue to explore additional opportunities. We have already made overtures to the Marquee Group, a sports marketing company I helped found, regarding our possible purchase of that company.

"We are also very pleased with our other acquisitions, adding important venues and capabilities to our existing operations in New England and California. Don Law, Avalon and Oakdale all bring the strength of their eminent status as promoters and operators of premier venues. These acquisitions will allow us to achieve synergies and add depth to our operations in these vibrant markets as well as to enjoy the unique perspectives and management experience that each of these entities brings to our organization. Adding the expertise and marketing of EMI is also a natural expansion for us. We know them well as a `supplier' to SFX, and we now look forward to further strengthening our relationship with them and extending their reach in the important merchandising area."

In a separate announcement, SFX Entertainments expected tax indemnification liability, with respect to the taxable gain to be realized by SFX Broadcasting upon the spinoff of SFX Entertainment, will be approximately $120 million. Most of the tax liability relates to certain deferred inter-company transactions creating taxable income for SFX Entertainment. Management believes that these deferred inter-company transactions will give rise to significant additional taxable basis which will be available to offset future taxable income of SFX Entertainment. Although managements estimates of the amounts of the indemnity payment and additional tax basis are based on certain assumptions which management believes are reasonable, the actual amounts could vary significantly.

SFX Entertainment is a leading promoter, producer and venue operator for live entertainment events. It owns and/or operates the largest network of venues in the country used principally for music concerts and other live entertainment events. Upon completion of all pending acquisitions, it will have 46 venues either directly owned or operated under lease or exclusive booking arrangements in 22 of the top 50 markets, including 12 amphitheaters in 7 of the top 10 markets. Through its large number of venues, its strong market presence and the long operating histories of the businesses it has acquired, SFX operates an integrated franchise that promotes and produces a broad variety of live entertainment events locally, regionally and nationally. Pro forma for all completed and pending acquisitions, during 1997, approximately 45 million people visited events promoted and/or produced by SFX, including music concerts, theatrical shows and specialized motor sports events.

A registration statement relating to SFX Class A Common Stock has been previously filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers be accepted prior to the time the registration statement becomes effective. This press release does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

-0-

 Client List for Falk Associates Management Enterprises
 (as of January 15, 1998)

Client: Team Playing For:
Kenny Anderson Portland Trailblazers
Vin Baker Seattle SuperSonics
Tyrone "Mugsy" Bogues Golden State Warriors
Keith Booth Chicago Bulls
Shawn Bradley Dallas Mavericks
Rex Chapman Phoenix Suns
Calbert Cheaney Washington Wizards
Antonio Daniels Vancouver Grizzlies
Patrick Ewing New York Knicks
Danny Ferry Cleveland Cavaliers
Adonal Foyle Golden State Warriors
Chris Gatling New Jersey Nets
Matt Geiger Charlotte Hornets
Armon Gilliam Milwaukee Bucks
Othella Harrington Houston Rockets
Juwan Howard Washington Wizards
Bobby Hurley Sacramento Kings
Allen Iverson Philadelphia 76ers
Michael Jordan Chicago Bulls
Arturas Karnishovas Olympiakos (Greece)
Kerry Kittles New Jersey Nets
Lee Mayberry Vancouver Grizzlies
Walter McCarty Boston Celtics
Ron Mercer Boston Celtics
Alonzo Mourning Miami Heat
Dikembe Mutombo Atlanta Hawks
Vitaly Potapenko Cleveland Cavaliers
Bryant "Big Country" Reeves Vancouver Grizzlies
Glen Rice Charlotte Hornets
Roy Rogers Boston Celtics
Dennis Scott Dallas Mavericks
Rod Strickland Washington Wizards
Bob Sura Cleveland Cavaliers
Dragan Tarlac Chicago Bulls
Keith Van Horn New Jersey Nets
Antoine Walker Boston Celtics
Monty Williams San Antonio Spurs
Sharone Wright Toronto Raptors





CONTACT: Timothy J. Klahs

Director, Investor Relations

SFX Entertainment, Inc.

(212) 407-9126
COPYRIGHT 1998 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1998, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

 Reader Opinion

Title:

Comment:



 

Article Details
Printer friendly Cite/link Email Feedback
Publication:Business Wire
Date:May 4, 1998
Words:1568
Previous Article:Showscan Announces Three Simulation Sales and Three Custom Simulation Films.
Next Article:New Wellfleet Farms Juice Blends From Ocean Spray Offer The Best of the Produce Aisle In Premium 100% Juice Line.
Topics:



Related Articles
SFX Agrees to buy Indianapolis-based concert promotion company.
SFX Broadcasting Announces Closing of SFX Entertainment's $350 Million of Senior Subordinated Notes.
SFX Entertainment Announces Five Major Acquisitions.
SFX Entertainment to Acquire Magicworks Entertainment.
SFX Entertainment to Acquire Cellar Door; Leading Concert Promoter in the Southeast & Midwest.
SFX Entertainment Receives Hart-Scott-Rodino Clearance For Magicworks Acquisition.
SFX Entertainment Acquires Magicworks.
SFX Entertainment, Inc. and The Marquee Group, Inc. Make Joint Announcement.
SFX Entertainment, Inc. and The Marquee Group, Inc. Enter Into an Amendment to the Marquee Merger Agreement.
SFX AGREES TO BUYOUT.

Terms of use | Copyright © 2014 Farlex, Inc. | Feedback | For webmasters