SFX Purchases 75% Stake in ID&T, Announce U.S. Edition of Tomorrowland at Ultra

SFX and ID&T have taken the next step in their partnership, with SFX acquiring 75% of the Dutch promoter and the companies announcing the first U.S. edition of Tomorrowland, ID&T's flagship event held annually in Belgium (July 26-28, 2013). The announcements were made during a flashy reception at the Mondrian hotel Wednesday during Miami Music Week, dance music’s biggest U.S. industry soiree of the year.

The event, renamed TomorrowWorld in the U.S., will take place in Atlanta during the last weekend in September on a span of privately owned farmland just outside the city “almost God-made for a festival,” SFX CEO Robert F.X. Sillerman tells Billboard. Reservations (for eventual ticket purchases) can be made online starting at 8 p.m. Thursday, although more than 500,000 people have already opted-in for more TomorrowWorld information, prior to even knowing the country in which the previously teased event would take place.

But the companies held back the bigger reveal, originally reported by the New York Times: SFX has acquired 75% of ID&T’s entire global business at a price of approximately $97.5 million (valuing the company at $130 million total), superseding their original North American-only joint venture, announced just a month ago. The deal will introduce several of ID&T’s over 20 event brands -- including hardstyle-focused Q-Dance -- to the U.S. and beyond.

“We very quickly got to know one another and we respect them so much and their talents, the way they approach things, and I think they recognize what we bring to the table,” Sillerman says. “It just made sense to do the whole thing.”

For ID&T CEO/founder Duncan Stutterheim, the move ends a long period of dancing with several different suitors, including Live Nation most notably, which brought 21-plus ID&T event Sensation to the U.S. for the first time last year. Its double play at Brooklyn’s new Barclays Center grossed $3.6 million and drew 22,509 dancers, according to Billboard Boxscore. But the two companies drifted apart in the subsequent months: AEG is promoting the current Sensation tour, hitting Toronto’s Rogers Centre on June 1.

“We had one deal we agreed on from both sides,” Stutterheim says of the Live Nation-Sensation partnership. “We had a talk after that, but the whole vision of [Sillerman] was far more interesting to us. It was on a new level, not just executing as a promoter. [Live Nation] was a good promoter, they did a good job for us, but this is the next step -- a 360 model of media on top of the events. I really love that vision.”

Announced in June 2012, the revived SFX originally seemed to be following the model Sillerman pioneered with the original one in the ‘90s -- rolling up concert promoters and live venues, and flipping them for a profit; only this time in the exploding EDM space, rather than rock and pop. But with the acquisition of ID&T, music platform Beatport last month (and its reported 40 million users), and the addition of investment partner WPP -- one of the world’s leading communications agencies -- his ultimate purpose is becoming clearer. SFX means to create a global media platform, based in youth culture, music and huge events.

“It’s bigger than all of us; the whole idea,” Stutterheim says. “If you call me in two years and it didn’t work, we have to look at only ourselves, because all the tools are there now.”

Three-day Tomorrowland is the jewel in ID&T’s crown, selling out 180,000 tickets in seconds this year to attendees from more than 200 countries. Unlike its biggest and most obvious competitor, Insomniac’s Electric Daisy Carnival, Tomorrowland allows and encourages patrons to camp out. Sources say that organizers even toured the storied site of Saugerties, N.Y., before settling on Atlanta.

When asked upon his initial deal with ID&T if Tomorrowland could be like the EDM generation’s Woodstock, Sillerman said, “Sure. Clearly the reason we’re doing this joint venture is we think there’s a huge appetite in the U.S. for their method and quality.”

It’s that careful attention to detail that made it impossible for ID&T to expand on its own, and got them looking for a partner in the first place. “We are a creative company; creative people,” Stutterheim says. “It was getting too big for us. We couldn’t find ourselves anymore. The festival here in Atlanta is a lot of money to put on; $15-16 million just to put it up only one country, and the demand is the whole world. We couldn’t do it. We needed help.”

The quick move to bring Tomorrowland stateside, not even two months after the SFX joint venture was announced, ups the stakes for Insomniac and its top rumored suitor, Live Nation. Three-day passes for EDC 2013 (June 21-23) went on sale in January and are still available; the event sold out in May 2012. Some of EDC’s estimated 300,000 unduplicated attendees could choose to head to Atlanta this year. The two festivals will be the biggest test of EDM’s scale to date.

TomorrowWorld slides into the U.S. EDM-friendly festival calendar in one of the only open slots left, with Ultra Music Festival owning March, Coachella in April, Electric Daisy New York in May, Electric Daisy Las Vegas and Bonnaroo in June, Lollapalooza in August, and Electric Zoo (formerly the unofficial closer of the season) in early September.

But according to Stutterheim, the European festival season was more of a concern: Tomorrowland’s massive stage sets have to make it across the ocean from Belgium to Atlanta, with enough time to properly ship and assemble them.

“We rent what we can, but we are physically transporting a lot of stuff; all the decorations,” he says. “We can’t plan a week after the Belgian edition. But with Sensation we have a lot of experience with shipping. We travel with five shows to 24 countries.”

While the EDM world has balked at the introduction of corporate man-in-black Sillerman to its ranks -- there’s even a joke @EDMCEO Twitter account -- Stutterheim says they’ve got him all wrong. 

“He is a character, but he was also the guy sitting in a room of 20 people with the vision questions,” he says of a recent meeting between SFX, Beatport, WPP and ID&T leaders. “I saw a side of him that was not only a billionaire guy playing around. He asked questions about the consumer, ‘What do they want?’ And that’s exactly what we’ve done for 20 years. [Sillerman] asked the same questions, not just how to make the stock grow, but also the experience level of the consumer.”

Questions? Comments? Let us know: @billboardbiz

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