AEG Buys 50% Stake in Australia's Frontier Touring
Deal unites global promoter with Australia's highest-grossing showman.
AEG Presents is forming a joint venture with Michael Gudinski's Frontier Touring, purchasing a 50% stake in the Aussie promoter and unifying a long-standing relationship that widens the pipeline for artists in North America and Australia to perform and build audiences on both continents.
Created in 1979, Frontier Touring has become Australia's largest promoter, with $245 million in ticket sales reported to Billboard's 2018 Year-End Boxscore, and third globally behind AEG ($1.5 billion) and Live Nation ($3.7 billion). AEG is one of Australia's largest venue operators, with its firm AEG Ogden managing 10 arenas in Austalia, New Zealand and parts of the Middle East and Asia.
The merger comes as Australia's concert business has enjoyed a 10-year growth stretch that has prompted a building boom out to New Zealand and Southeast Asia, creating a touring network of venues that makes the long trek to the region more economically feasible for a new generation of artists.
It's also reunited Gudinski and Michael Chugg, who announced they were forming a joint venture in March, reuniting their firms 40 years after forming Frontier Touring in 1979 and then splitting into two companies in 1999.
Once the Chugg deal closed, Frontier and AEG announced the long-rumored joint venture, which had been in the works for months with Jay Marciano, chairman and chief executive of AEG Presents telling Billboard, "There weren't difficult negotiations, but it took a little while because we're both really busy companies."
He also explained the two had been partnering on tours since 2007, including The Rolling Stones, Leonard Cohen, Taylor Swift’s Red and 1989 tours, Celine Dion, Justin Bieber, Rodriguez and Shawn Mendes.
"The next growth area is clubs and theaters," Marciano explains, "and creating more touring opportunities for artists. There's no shortage of large venues, but it's difficult for an artist that sells 1,000 to 4,000 tickets shows to make the long trip and only play one or two shows; they need at least half-a-dozen concerts to make financial sense."
Marciano said the company wants to develop and acquire venues in the region with Gudinski becoming part of AEG's global touring network. Beyond concerts, Gudinski's Mushroom Group is Australia's largest independent music company, with seven record labels, a publishing company, two booking agencies and a deep roster of artist managers, merchandise deals and the Mushroom Pictures film and TV group.
Marciano said AEG pursued a joint venture with Gudinski over an acquisition because "there's an advantage when everyone is equal and we all have to agree to drive the business. Whether it's Louis Messina or The Bowery Presents, the partners in those companies want a seat at the table."
Gudinski described Frontier as "fiercely independent since its inception in 1979," telling Billboard, "I've gotten to know promoters at the company like Louis Messina and Paul Tollett and watched them continue to operate as entrepreneurs with their own visions."
Gudinksi is coming off a strong 2018 that included shows for Paul McCartney, Celine Dion, Foo Fighters, The Killers, Ed Sheeran and more. He's also a successful horseracing sportsman and two-time Melbourne Cup champion, earning a 2017 win with British-bred, Irish-trained thoroughbred Rekindling.
"Horses are a great hobby, but I got my start in professional gambling as a concert promoter," Gudinski joked. In the 40 years he's been in business, he said he's been approached about a merger or acquisition from "nearly everyone," including Live Nation, but said partnering with AEG allowed him to continue to operate independently while also creating a rich experience for fans and more opportunities to connect Australian artists with an American market.
Gudinski announced the deal after touching down in Southern California for Coachella with Chugg coming close behind.
"I told him he could come if he didn't walk around the festival in one of those fucking hideous Hawaiian shirts he seems to love," Gudinski joked, saying the Aussies were in town to toast the deal and watch Tame Impala perform Saturday night. "It's a major milestone to have a contemporary Australian band headling Coachella. And we get to spend time with everyone and let them know there are plenty of advantages to bringing shows over to Australia, including that we all speak English -- just in our own way."