Live Nation is close to finalizing a deal to buy a 50% stake in EDM promoter Insomniac Events
According to a report in the Wall Street Journal, which cited people familiar with the deal. This information, including the speculative numbers (which valued this “about 50% stake” at $50 million), has been circulating throughout the music industry for months, with chatter peaking since Live Nation rival SFX Entertainment initially got in bed with Insomniac rival ID&T in January, eventually acquiring 75% of the Tomorrowland promoter (which was valued at $130 million total) in March. The first U.S. edition of the hit Belgian festival, dubbed TomorrowWorld, is set for September 27-29 in Atlanta.
Last May, Live Nation acquired Cream Holdings Limited, a pillar of the EDM entertainment scene, which also gave Live Nation the exclusive rights to Creamfields Festivals, which have been held all over the world since the company’s launch in 1998.
In the past several weeks, Insomniac CEO Pasquale Rotella has reportedly been spotted with Live Nation president/CEO Michael Rapino at several events in Los Angeles. Hard Events — founded by Gary Richards, who sold the company to Live Nation last year, and joined its full-time team — will have a stage at Insomniac’s Electric Daisy Carnival this year, a lineup announced on May 1 revealed.
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.
Insomniac announced on May 29 that tickets to EDC, its marquis event at the Las Vegas Motor Speedway on June 21-23, had sold out. The festival’s three-day capacity is 345,000.