Exclusive: SFX, MasterCard Announce Global Multi-Year Partnership
MasterCard and SFX Entertainment will announce a global multi-year partnership that will make MasterCard the exclusive financial services sponsor of SFX's many platforms, as well as an integrated technology partner in improving fan experiences across SFX's portfolio.
The partnership was expected to be detailed in a conference call with investors Tuesday (Aug. 5) morning, hosted by Robert F.X. Sillerman, SFX chairman and CEO, and Richard Rosenstein, SFX's chief financial and administrative officer.
Financial terms of the deal were not disclosed, but the partnership is the first financial services deal of its kind in the EDM category – or "EMC," as SFX terms it ("electronic music culture.") Rollout of the partnership will begin in September, before becoming ubiquitous on all SFX properties in 2015. SFX continues to expand and acquire new events and companies, but in 2013 alone it produced and promoted over 1,600 events in 23 countries including Tomorrowland, Mysteryland, Stereosonic and Sensation. Dance music site Beatport also has 240,000 registered DJs from over 200 countries, with 50 million unique visitors in 2013.
Sillerman tells Billboard that discussions began with "the usual suspects" of banks and credit-card companies in late 2013 to explore opportunities on a global partnership, but MasterCard quickly rose to the top with its equal focus on locally relevant platforms like Priceless Cities as well as cashless technologies like its digital-payment system MasterPass.
"When we understood what could make things better for EMC and the fans within this culture, it became pretty obvious to us that a traditional relationship with a financial services company would have been nothing more than an economic land grab," Sillerman explains. "They're not interested in saying, ‘You must do this,' we're at the table together making sure the experience is better for the fans. From a selfish and economic point-of-view, this is not just us grabbing a check. This is us working together, and the potential is huge."
Raja Rajamannar, MasterCard's chief marketing officer, notes that the company had previously been in the "traditional" music space, from partnerships with award shows like the Grammys and the BRITs to a multi-year deal with Justin Timberlake, and had been looking to find different ways to reach new customers through music.
"The objective for us is to be the leading financial brand to a younger audience, which is where the SFX fan already is, and build a future with those audiences," said Rajamannar, citing 25-to-34-year-olds as a particular key target of MasterCard's. "We'll be able to activate across the entire gamut, whether it's the ticketing experience for consumers, live events or social connectivity."
In the past 12 months, SFX has announced several other global sponsorships with brands equally that are equally ambitious in scale and scope to the MasterCard deal, from creating bespoke festivals (SunSets) for Anheuser Busch-InBev's Corona, to partnering with Clear Channel to create three Beatport-branded content platforms to teaming with T-Mobile and Syco on the forthcoming "Ultimate DJ" TV show to inking a five-year $75 million deal with ticket reseller Viagogo in June. In March, he noted to investors that these four partnerships would contribute a minimum of $40 million in EBITDA to the company over the course of 2014. Sillerman says more details will be shared regarding expanded relationships with sponsors during Tuesday's call.
In the meantime, MasterCard and SFX will continue to explore the potential of their new partnership. "The next step is to leverage what is already there, and determine how we can serve relevant content to SFX consumers in an all-inclusive non-obtrusive manner," says Rajamannar, "and also take their experience to the next level in terms of enhancing it."