Mark Cuban, Guggenheim's Todd Boehly, Charlie Walker, More Talk EDM and Investing at Touring Conference
Mark Cuban, Guggenheim's Todd Boehly, Charlie Walker, More Talk EDM and Investing at Touring Conference

Full House: The room was packed for "Spinning The Turnstiles In New Directions: New Partners & Strategies in the Live Music Space" (Photo: Michael Seto)

Sure, EDM is all the rage on the touring and festival circuit right now -- but what about in 2017? To a panel of top promoters and investors, the picture was a little cloudy.

"They're clearly able to bring in the talent. The question is what happens beyond that revenue expense line," said Charles Johnson, managing director of SunTrust Robinson Humphrey's sports and entertainment specialty group. "If I put my lending hat on, I personally don't understand if it will be sustainable five or seven years from now without significant change. And that change I believe would have to come on the creative side. You gotta do something to make a DJ in front of a bunch of people more creative."

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The relative safety of EDM shows, which are frequented by teenagers 18 and under rampant with various substances, has been a concern since the rave scene of the late 90s and has taken on a renewed liability factor for promoters like C3's Charlie Walker. "Our shows are 18 and up…the younger they are, the more likely it is they don't know anything about anything," Walker said. "That scene has certainly got some risk in it that we don't in other parts of our business." Added Todd Boehly, president of Guggenheim Partners (an owner of Billboard's parent company Prometheus Global Media), "If it's a problem for the promoter, it's a problem for the investor."

Having seen various musical trends come and go, Y Entertainment Group CEO Rick Stevens echoed the "tremendous risk" associated with putting "all your eggs in the basket of one category music, particularly as it is highly likely that that will transform itself into the mainstream. I think the really clever festival promoters who have established a brand are guys like the AEGs and the Goldenvoice team who've opened up to all categories and attracted a broader marketplace."

No matter what the genre, live music is of high interest to investors these days -- particularly with No. 2 promoter AEG currently on the block (whose CEO Randy Phillips was in the front row during the Touring panel). Guggenheim's Boehly confirmed "everything you read about our interest is real" in bidding on the company, but that "it will all come down to, like everything, price. They've got a lot of interesting aspects to it. I think the extension of the theme that we've been thinking about is very much real in the context of what they've built to date... but so far we have a picture book. Our bid's not gonna come back with a picture book. We have to get more than just pictures, unless they want us to win pictures. There's a lot more work to be done, but from the outside looking in they've built an interesting footprint."

Cuban discussed AXS TV, the live-music cable channel rebranded with Ryan Seacrest. (Photo: Michael Seto)

Mark Cuban saw the value in the televised side of live music earlier this year when he teamed up with Ryan Seacrest to rebrand his HDNet cable channel as AXS TV, a 24/7 live-music network. "I'm a big believer for all the reasons that live events create a unique experience for the people there, television extends it to everybody," he said. "The one thing the Internet doesn't really provide you is zero latency and the thing social media is all about is zero latency. We might have all seen the 'Gangnam Style' video at different times but didn't share the experience. Television, everybody sees it at the same time. It becomes a communal experience and television has become the only way to reach a big audience and enable that communal experience. We're looking at AXS TV to in essence be the ESPN of music and pop culture."

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And with EDM and festivals still very much a buyer's market, the conversation eventually turned to Bob Sillerman's current investment in EDM festivals, promoters, agencies, and the lasting impact of his company SFX (which was sold to Clear Channel in 2000 and eventually became Live Nation). "The world today in live entertainment is post-SFX," said Jordan Zachary, VP at The Raine Group. "We made a bet that festivals have replaced the old amphitheater world and the way people see live music."

Offered Guggenheim's Boehly, "SFX took down a strategy that was cap-ex intensive and heavy around real estate with one type of theme and it worked really well at the time. The rollup worked really well at the time and the benefit of debt financing was all in place to have a really nice run. The combination of great content and fantastic real estate makes for a very self-fulfilling prophecy. But the dynamic around who's playing what and where and who can actually play in big amphitheaters is changing dramatically. And as tastes continue to broaden and become more and more diverse, it's clear the festival model is kicking in nicely. The legacy SFX model isn't that attractive to the eye."

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Cuban's biggest concern is the herd mentality that EDM can create. "The interesting thing is it's a lot of the same DJs going festival to festival to festival. Right now EDM is the platform I look at it and say it's more about communal experiences. But with big concerts, you can have 100,000 people there, but there's 300 million people that aren't there. We want to be the people that broadcast those experiences."

From left to right: Mark Cuban, Chairman, AXS TV; Todd Boehly, President, Guggenheim Partners; Charles J. Johnson, Managing Director, Investment Banking, Sports & Entertainment Group; Billboard's Bill Werde; Rick Stevens, CEO, Y Entertainment Group; Charlie Walker, Partner, C3 Presents; Jordan Zachary, VP, The Raine Group. (Photo: Michael Seto)

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