Capital Calls: SXSW’s partial savior

3 minute read

People pass through the sidewalk near Antones Nightclub after the South by Southwest (SXSW) music and tech festival was canceled over growing concerns related to the coronavirus outbreak in Austin, Texas, U.S. March 6, 2020. REUTERS/Sergio Flores

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NEW YORK, April 19 (Reuters Breakingviews) - Concise insights on global finance in the Covid-19 era.

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ROLLING SOUTH. Arts-and-tech festival South By Southwest is selling a 50% stake to Rolling Stone publisher Penske Media, the Wall Street Journal reported on Sunday. That provides a lifeline to the annual Texas-based hipster confab, and further evidence that live events are poised to bounce back in 2022.

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The investment fits with a broader theme in media of brand owners diversifying into in-person happenings – including Breakingviews parent Thomson Reuters (TRI.TO). Penske owns Hollywood trade magazine Variety and music industry bible Billboard. The idea is that the media brands get extra publicity through events, and the companies broaden their revenue beyond just relying on ads and subscriptions.

Whether the price makes sense too is a bigger question. SXSW hasn’t disclosed the financials of the deal. But the recovering prospects of event organizers aren’t exactly a secret. Live Nation Entertainment (LYV.N), which runs the Lollapalooza festival, saw its shares fall by 70% when Covid-19 hit last year. Now they’re worth more than they were before the pandemic. Cheap tickets are once again hard to find. (By Jennifer Saba)

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