SFX Buys 5 Companies for $225 Million

Continuing its dizzying round of acquisitions related to live entertainment, New York-based SFX Entertainment Inc. on Monday said it has purchased five companies for a total of about $225 million.

The companies include Avalon Attractions, a leading Los Angeles concert promoter (bought last year by Hickory Valley, Tenn.-based TBA Entertainment Corp.) that has an interest in the 15,500-seat Irvine Meadows Amphitheatre. With these deals, SFX’s buying spree over the last year totals about three-quarters of a billion dollars.

Another SFX acquisition is Washington, D.C.-based Falk Associates Management Enterprises, David Falk’s powerful sports agency, which represents basketball superstars such as Michael Jordan and Patrick Ewing. SFX plans to pay $100 million for the agency and has separately made an offer to acquire the rest of New York-based sports marketing and management firm Marquee Group Inc. SFX and Marquee Chairman Robert Sillerman already own about 9% of Marquee shares.

“Our interest is in participating in the explosion in live entertainment,” Sillerman said in a phone interview. “Obviously, sports is on the forefront of that. . . . [The] line between sports and entertainment has forever been blurred.”

Sillerman praised Falk as being “at the forefront of understanding the association an important role model or personality can have with a corporate partner,” adding that he sees synergies between sports and music sponsorships.

In the concert promotion business, SFX will acquire Blackstone Entertainment (a.k.a. the Don Law Co.), a Boston-based operation that owns the Next ticketing firm and several concert sites. It will pay about $80 million for Blackstone to gain a commanding presence in New England.

Also consolidating SFX’s power in the Northeast is its acquisition of the 4,800-seat Oakdale Theater in Wallingford, Conn. SFX already controls every large outdoor venue in the New York area; with its $27-million buyout of Avalon and several other stakeholders in the Irvine Meadows Amphitheatre, SFX controls many of the large outdoor venue businesses in the Los Angeles area as well.

Also in L.A., SFX will pay $8 million for an 80% interest in Event Merchandising Inc., a company that negotiates deals for concert merchandising on behalf of venues. One of Sillerman’s strategies is to control other concert-related businesses such as concessions, ticketing and parking, which can add greatly to the profitability of a venue.

“We think the business as a whole can be expanded. Because of fragmentation until now, people have understandably been concerned with a local agenda, as opposed to growing an industry,” Sillerman said.

SFX, which spun off from radio station owner SFX Broadcasting Inc. last week, is expected to continue making acquisitions. The company is said to be in discussions with companies including booking agency Monterey Peninsula and Florida-based concert promoter Cellar Door International.

SFX shares rose $4.31, or 12%, to $40.25 on Nasdaq.