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SFX Entertainment Buys Major Stake in Dutch Festival Promoter

As corporations hear the siren call of electronic dance music, the deals keep getting bigger.

On Thursday, SFX Entertainment will announce that it has bought 75 percent of ID&T, a Dutch festival promoter, for $102 million in cash and stock. The deal, perhaps the biggest in the market so far, will give SFX a major foothold on the global festival circuit as it tries to build a $1 billion media empire centered on dance.

ID&T puts on the annual Tomorrowland festival in Belgium, which last year drew 180,000 people, as well as Sensation, an indoor event held in 20 countries. ID&T already formed a joint venture with SFX to bring a festival to North America, and on Wednesday the two companies revealed the details of that partnership: TomorrowWorld, an event for 150,000 people to be held in Chattahoochee Hills, Ga., from Sept. 27 to 29.

(Why not call the new one Tomorrowland Disney owns that name in the United States, according to Duncan Stutterheim, one of ID&T’s founders.)

“We are aligned with a festival operator who has been doing this for 20 years and has helped define quality and a great experience for fans,” Mr. Sillerman said in an interview. “It also gives us the global footprint to begin creating the worldwide community of dance fans.”

The deal values ID&T at $136 million.

Mr. Sillerman, who corporatized the concert industry in the 1990s through a previous incarnation of SFX, revived the company last year to capitalize on the rise of electronic dance music, or E.D.M.

After decades on the cultural margins, dance has taken over the sound of Top 40 radio and drawn huge crowds to festivals around the world â€" and, in turn, the attention of Wall Street investors.

So far SFX has bought a string of Miami nightclubs and several festival and live-event companies. But its acquisition spree took off recently when it paid $50 million for Beatport, a download store that Mr. Sillerman wants to use as a hub to connect the disparate global dance audience, and therefore and attract advertising dollars from major brands. This week, SFX also announced an investment from the advertising giant WPP that has been estimated at $10 million.

Mr. Stutterheim said in an interview that SFX’s resources would help his festival franchises expand quickly around the world. This year, ID&T events will take place in Brazil, South Africa and perhaps in Kenya, and Mr. Stutterheim said he was looking at various spots in Asia.

“I believe in this story, that this will build into a new worldwide electronic company,” he said of SFX. “This is a really big step, and we could never do it ourselves.”

Last year, ID&T brought its Sensation event to the Barclays Center in Brooklyn in cooperation with Live Nation. But the SFX deal is a sign that corporate allegiances are being drawn at the top levels of the festival market. Live Nation, which has been building its own dance empire, is said to be in the advanced stages of takeover talks with Insomniac, the promoter behind the Electronic Daisy Carnival events.

Another power struggle is taking shape in Las Vegas, where top D.J.’s are booked to multimillion-dollar residencies at the nightclubs attached to major casinos. The Wynn casinos have built a lineup with dozens of D.J.’s; a nightclub branch of Hakkasan, a high-end restaurant chain, has arrived as a major competitor. The club, opening next month at the MGM Grand, has booked a number of star D.J.’s, like Tiësto, Deadmau5 and Steve Aoki, who have been associated with Wynn.

Mr. Stutterheim, like other entrepreneurs in the dance world, built his business and his festival brands as an independent company, and said that at first he was ambivalent about selling to a corporation whose goals were anything but indie.

“There was hesitation in the beginning, of course,” he said. “But for me the big change was when the agents came in with the big D.J.’s, the big, top-dollar stars that changed the game. Now it’s just the professional entertainment industry. I’m seeing possibilities, and I don’t have any hesitance now. That’s the way it’s going, so, O.K., let’s go that way.”



SFX Entertainment Buys Major Stake in Dutch Festival Promoter

As corporations hear the siren call of electronic dance music, the deals keep getting bigger.

On Thursday, SFX Entertainment will announce that it has bought 75 percent of ID&T, a Dutch festival promoter, for $102 million in cash and stock. The deal, perhaps the biggest in the market so far, will give SFX a major foothold on the global festival circuit as it tries to build a $1 billion media empire centered on dance.

ID&T puts on the annual Tomorrowland festival in Belgium, which last year drew 180,000 people, as well as Sensation, an indoor event held in 20 countries. ID&T already formed a joint venture with SFX to bring a festival to North America, and on Wednesday the two companies revealed the details of that partnership: TomorrowWorld, an event for 150,000 people to be held in Chattahoochee Hills, Ga., from Sept. 27 to 29.

(Why not call the new one Tomorrowland Disney owns that name in the United States, according to Duncan Stutterheim, one of ID&T’s founders.)

“We are aligned with a festival operator who has been doing this for 20 years and has helped define quality and a great experience for fans,” Mr. Sillerman said in an interview. “It also gives us the global footprint to begin creating the worldwide community of dance fans.”

The deal values ID&T at $136 million.

Mr. Sillerman, who corporatized the concert industry in the 1990s through a previous incarnation of SFX, revived the company last year to capitalize on the rise of electronic dance music, or E.D.M.

After decades on the cultural margins, dance has taken over the sound of Top 40 radio and drawn huge crowds to festivals around the world â€" and, in turn, the attention of Wall Street investors.

So far SFX has bought a string of Miami nightclubs and several festival and live-event companies. But its acquisition spree took off recently when it paid $50 million for Beatport, a download store that Mr. Sillerman wants to use as a hub to connect the disparate global dance audience, and therefore and attract advertising dollars from major brands. This week, SFX also announced an investment from the advertising giant WPP that has been estimated at $10 million.

Mr. Stutterheim said in an interview that SFX’s resources would help his festival franchises expand quickly around the world. This year, ID&T events will take place in Brazil, South Africa and perhaps in Kenya, and Mr. Stutterheim said he was looking at various spots in Asia.

“I believe in this story, that this will build into a new worldwide electronic company,” he said of SFX. “This is a really big step, and we could never do it ourselves.”

Last year, ID&T brought its Sensation event to the Barclays Center in Brooklyn in cooperation with Live Nation. But the SFX deal is a sign that corporate allegiances are being drawn at the top levels of the festival market. Live Nation, which has been building its own dance empire, is said to be in the advanced stages of takeover talks with Insomniac, the promoter behind the Electronic Daisy Carnival events.

Another power struggle is taking shape in Las Vegas, where top D.J.’s are booked to multimillion-dollar residencies at the nightclubs attached to major casinos. The Wynn casinos have built a lineup with dozens of D.J.’s; a nightclub branch of Hakkasan, a high-end restaurant chain, has arrived as a major competitor. The club, opening next month at the MGM Grand, has booked a number of star D.J.’s, like Tiësto, Deadmau5 and Steve Aoki, who have been associated with Wynn.

Mr. Stutterheim, like other entrepreneurs in the dance world, built his business and his festival brands as an independent company, and said that at first he was ambivalent about selling to a corporation whose goals were anything but indie.

“There was hesitation in the beginning, of course,” he said. “But for me the big change was when the agents came in with the big D.J.’s, the big, top-dollar stars that changed the game. Now it’s just the professional entertainment industry. I’m seeing possibilities, and I don’t have any hesitance now. That’s the way it’s going, so, O.K., let’s go that way.”



How Viable Is Rand Paul for 2016

Perhaps no Republican has had a better 2013 than Rand Paul, the Kentucky senator who drew attention and praise for his talking filibuster against the C.I.A. director nominee John Brennan, then last week won the straw poll at the Conservative Political Action Conference in Washington. Then, on Tuesday, as my colleague Ashley Parker reports, Mr. Paul gave a speech to the United States Hispanic Chamber of Commerce, outlining his plan for immigration reform.

Mr. Paul has been fairly explicit about his potential interest in running for the Republican presidential nomination in 2016, so it is safe to assume that at least some of his actions are colored by his interest in positioning himself for the primaries and caucuses. But oddsmakers continue to list Mr. Paul as something of a long shot, giving him anywhere from 12-to-1 to 28-to-1 odds against winning the nomination.

Is Mr. Paul, in fact, a viable 2016 contender Or, like his father, Ron Paul, is he someone who might expect to win the enthusiastic support of libertarian-leaning G.O.P. voters but who might otherwise fall well short of winning a plurality or majority of the Republican electorate

It might help to step back and consider the Republican primary electorate as a whole. The historical norm has been that Republicans are more unified in picking a candidate, while Democratic nominees must struggle to cobble together a winning plurality from among the party’s diverse constituencies. However, it is less clear that this is true today. Republicans might not have as much diversity along racial or demographic lines as Democrats do, but there are several ideological constituencies within the party that could make it hard for any candidate to win the nomination by consensus.

The way that I’ve come to think of these Republican voting groups is illustrated in the diagram below, which resembles a series of interlocking “Olympic” rings. The idea is that there are five major constituencies within the party, which overlap to varying degrees.

One group consists of religious conservatives, a set of voters that once had tremendous influence in picking the Republican nominee but which have been played a more marginal role in the last two election cycles. (In 2008, Mike Huckabee had trouble drawing support beyond this group, as did Rick Santorum in 2012.) It remains plausible that the G.O.P. nominee in 2016 could rely on religious conservatives as a major base of support in the primaries while also appealing to other groups within the party â€" a model that worked successfully for George W. Bush in 2000. But if Republicans seek to de-emphasize social issues, seeing them as a potential liability in the general election, these voters could become more estranged from the rest of the party. A Republican nominee could probably not afford for these religious voters to take an openly hostile attitude toward him, but he might hope to appease them rather than expecting their enthusiastic support.

The next constituency consists of Tea Party conservatives â€" a group that is much talked about, but hard to define. There are some significant demographic and attitudinal overlaps between the Tea Party and the religious right: in fact, one reason the religious right may have become less influential in the Republican Party is because some of those voters have been captured by the Tea Party movement instead. At the same time, the Tea Party has placed much more emphasis on economic policy than on social issues.

The Tea Party also has a complicated relationship with the Republican establishment. On the one hand, it may have developed in part as a response to the perceived failings of Republicans in Washington, and it has produced frequent confrontations with the Republican establishment over nominations in races for Congress and for state’s governors. Rand Paul, who beat out the establishment candidate in his Republican senate primary in Kentucky with Tea Party backing, has been a hero of the Tea Party movement and even delivered their response to President Obama’s State of the Union address this year. On the other hand, some candidates like Senator Marco Rubio of Florida, who once had the blessing of the Tea Party, have now become members in good standing of the Republican establishment. Candidates who might seek the nomination with support from the Tea Party wing of the G.O.P. need to toe a fine line beween invoking its populist spirit and avoiding being seen as threatening to other coalitions within the party or to its chances of winning a November election.

Next are libertarian conservatives â€" the group that Mr. Paul may be most identified with. It has become fashionable to apply the term “libertarian” to almost any group that takes a more conservative attitude toward fiscal policy than toward social policy. In practice, there aren’t all that many voters (and there are even fewer politicians) who take truly liberal stances toward social policy while at the same time holding strongly conservative positions on economics â€" and, in fact, Mr. Paul holds quite conservative stances on some social issues, like abortion. But there are a substantial number of voters who take very conservative stances on economic policy while holding moderate ones on social policy; these voters tend to identify as Republicans. There are also voters who hold very liberal views on cultural issues but who have centrist positions on economic policy. These voters may hve once have identified as “Rockefeller Republicans, but are now more likely to align themselves with independents or Democrats and are unlikely to vote in large numbers in the Republican primaries.

In contrast to the libertarian conservatives, moderate or reform-minded Republicans take some explicitly centrist positions on both economic and social policy. This constituency has been diminishing as the Republican party grows more conservative. Still, there are some moderate Republicans out there, and they have not entirely been subsumed by the libertarian wing of the party; in the 2012 Ohio Republican primary, for example, about 30 percent of voters identified as moderate or liberal but did not vote for Ron Paul, while roughly 25 percent did so in Florida.

As is the case for candidates from the other constituencies, those in the G.O.P.’s moderate wing must avoid alienating the rest of the party. John McCain in 2008 and Mitt Romney in 2012 were able accomplish this: Mr. Romney by simply abandoning many of the moderate positions he had once held in Massachusetts, and Mr. McCain by branding himself as a patriotic “maverick” at a time of national emergency. But other candidates, like Rudolph W. Giuliani in 2008 and Jon M. Huntsman Jr. in 2012, were unable to expand their support beyond the most left-leaning G.O.P. voters and their campaigns ended quickly as a result. (I would argue that Chris Christie is on the Giuliani-Huntsman trajectory while other candidates like Jeb Bush, the onetime Florida governor, might have more success in appealing to both moderate and conservative Republicans in 2016.)

Last but not least are the establishment Republicans. The establishment label has become much maligned at a time when the G.O.P. party brand is unpopular, but this remains a highly desirable position for someone seeking the Republican nomination.

What defines an “establishment” Republican As with the other categories, this gets tricky. A literal definition might be someone who exerts power or authority as a member of the Republican “team” â€" as opposed to an outside activist or agitator who is seeking to rebuild the party from its foundations. A more pragmatic definition might be someone who is viewed as reliably conservative without being dangerous or extreme: the “sweet spot” of the most conservative electable candidate.

Candidates from the establishment wing of the party are natural coalition builders, seeking to satisfy (or at least pacify) the other Republican constituencies. As such, they have an advantage in the nomination process, which is inherently a coalition-building exercise. In addition, these candidates potentially have the resources of the party establishment at their disposal, including access to cash, staff talent and endorsements from key party officials. The political science literature presents good evidence that these factors often precede and predict popular support. They also equip a candidate to survive a prolonged nomination process that might drain the resources of other candidates.

What are the disadvantages to running as an establishment candidate This positioning does not absolve a candidate of requiring some political dexterity; if he is too clumsy in balancing the party’s various coalitions off against one another, he may come to be seen as unprincipled. Moreover, because it is generally desirable to run as the establishment candidate, the space is likely to be crowded and competitive; a candidate can run the risk of being everyone’s second choice and failing to gather any momentum as a result, a fate that befell Gov. Tim Pawlenty of Minnesota in 2011.

As the nomination process evolves, the candidates will hope to expand beyond their natural base of support into the neighboring constituencies. As I mentioned, for example, Jeb Bush might seek to win the support of both establishment Republicans and the party’s moderate wing â€" or Mr. Rubio might hope to win the support of the establishment Republicans and the Tea Party. Other coalitions â€" those that do not overlap on the diagram â€" are unlikely to make for natural pairings. For instance, it is hard to conceive of a candidate who would simultaneously be the ideal choice for both moderate Republicans and the religious right.

A candidate becomes a cinch to win the nomination if he wins the support of three of the five coalitions, a majority. However, two of the five may also suffice if no other candidate can build support outside his group. In 2012, for example, Mr. Romney often lacked the support of the religious right (who preferred Mr. Santorum), libertarians (who preferred Ron Paul) and Tea Party Republicans (who flirted with various alternatives). But he cleared the field of moderate candidates, and of other candidates who were acceptable to the G.O.P. establishment, and won the nomination as a result.

As for Rand Paul, he begins with one significant advantage: he is unlikely to be challenged for the loyalty of G.O.P.’s libertarian wing. This is not to say that there is nothing a libertarian might find fault with in Mr. Paul; his position on same-sex marriage, for instance, is unlikely to be deemed acceptable by left-leaning libertarians. But the types of libertarians who vote in the Republican primary are a more conservative group and are unlikely to find any better alternatives, particularly given that most politicians in both parties behave as though social issues, economic issues and foreign affairs all exist within a single ideological dimension.

What we may be witnessing, then, is an effort for Mr. Paul to expand his support into some of the other Republican constituencies. His recent call for immigration reform, for instance, while compatible with his libertarian principles, could also appeal to voters from the G.O.P.’s moderate wing. In contrast, it might be less helpful with the Tea Party voters, whose support he will hope to win.

Unlike some “insurgent” candidates of the past, Mr. Paul seems interested in participating in the “invisible primary,” a process that is traditionally associated with establishment candidates. He will be the headline speaker at May’s Lincoln Dinner hosted by the Republican Party of Iowa, for example, just the sort of thing that might help him to win some key endorsements there three years from now.

Mr. Paul is also sure to get his share of push-back from establishment Republicans; Mr. McCain, for example, criticized his recent filibuster.

But Mr. Paul at least seems to demonstrate the interest in expanding his support beyond libertarian conservatives, something his father rarely did, and he will have three years to experiment with how to find the right formula. That doesn’t make him as likely a nominee as a more traditional candidate like Mr. Rubio, Jeb Bush or Representative Paul D. Ryan of Wisconsin. But his odds look better than the 20-to-1 numbers that some bookmakers have placed against him.



The Breakfast Meeting: Networks Embrace Content Marketing and Retailers Admit to Faking Faux Fur

Television networks and channels are becoming increasingly involved in making commercials, hoping to prevent audiences from skipping ads, Stuart Elliott writes. New efforts at content marketing (also called content advertising and native advertising) have become the norm as networks try to convince marketers to pay more for airtime. Scripps Networks Interactive, the parent of cable channels like DIY, Food Network and Travel Channel, is one of the leaders in the field. Jonathan LaConti, vice president for ad sales at the company’s New York office, said that Scripps strives to make commercials that look “really natural,” particularly if they involve one of the network’s hosts.

Three retailers settled federal claims on Tuesday that they had marketed real fur as fake fur, Julie Creswell reports. Neiman Marcus, Dr.Jays.com and Eminent settled with the Federal Trade Commission for marketing rabbit, raccoon and, possibly, dyed mink as faux fur, to the applause of animal rights groups. The seemingly counterintuitive business plan has become more viable as retailers struggle to meet a growing demand for fake fur and a global supply chain obfuscates the origins of some clothing materials.

Sylvia Nasar, a tenured professor at Columbia’s Graduate School of Journalism, filed a lawsuit on Tuesday accusing the university of misdirecting $4.5 million in endowment funds over the last decade, Christine Haughney writes. Ms. Nasar, who is the John S. and James L. Knight professor of business journalism at Columbia and the author of the book “A Beautiful Mind,” charges in the suit that the university misused a $1.5 million endowment provided by the Knight Foundation to establish a professorship. The agreement called for Columbia to pay the professor’s salary on its own, then use the grant money for additional salary and benefits like research. Ms. Nasar’s complaint says that instead she spent $174,000 of her own money and when the accounting firm KPMG audited the endowment they found that Columbia’s “misappropriations and defaults” totaled as much as $4.5 millin. A Columbia spokeswoman would not comment on pending litigation.

A new book by Jane Goodall, the primatologist, contains passages taken from Web sites without attribution, according to an article on The Washington Post’s Web site on Tuesday, Leslie Kaufman writes. The book, “Seeds of Hope: Wisdom and Wonder From the World of Plants,” written with Gail Hudson, who has worked with Ms. Goodall on two other books, is about plants and their impact on humans, not chimpanzees. Ms. Goodall acknowledged the duplication and apologized, adding that she would discuss the issue on her Web site’s blog.

Tom Bissell, the author of seven books and a contributor to publications like The New Yorker and Harper’s, has broken into a new genre by writing “Gears of War: Judgment,” the fourth video game in the popular science-fiction military series for the Xbox 360, Chris Suellentrop reports. Dialogue, character development and plot are often afterthoughts behind game mechanics and lush combat sequences in games like “Gears of War,” but in this case Mr. Bissell and Rob Auten, who helped him write the game, were instrumental almost from the beginning. The resulting game is fast-paced and lean, propelling the action forward with a subtle story line that inattentive players might miss for the explosions.

The New York Times announced on Tuesday that Alison Smale would become Berlin bureau chief and Richard W. Stevenson would become Europe editor. The change comes as The Times moves to create an integrated global news brand; the The International Herald Tribune, which The Times has owned since 2003, will be renamed as The International New York Times later this year.