Alejandro Soberón Kuri founded OCESA in 1990 to establish Mexico as an obligatory tour stop for international artists. He ended up building a global concert powerhouse third only to Live Nation and AEG.
“Mexico may not be the third-biggest country in the world, but it has the third-largest live event promoter,” says Soberón Kuri, 60, from his CEO office in Mexico City — though neither he nor his colleagues have been working there during the pandemic, as major venues remain closed across the country.
In 2019, OCESA’s holding company, Grupo Corporación Interamericana de Entretenimiento, produced over 3,400 shows from the United States to Colombia and throughout Central America, reporting $233.2 million in ticket sales to 936 events for 4.3 million fans, according to Billboard’s 2019 year-end Boxscore charts. Of that business, says Soberón Kuri, about 25% of revenue comes from international acts, 30% from domestic artists and 45% from festivals, which present a mix of the two. CIE, which is listed on the Mexican Stock Exchange, has offices in Mexico and Colombia, as well as a U.S. outpost for its Seitrack management agency, and includes venue management, concert promotion, festivals, ticket distribution (it owns Ticketmaster in Mexico in partnership with Live Nation) and sponsorships. It also operates a special-events division, owns a 10% share in South American event promoter T4F-Time for Fun (which has offices in Chile, Brazil and Argentina) and has produced the Mexican Grand Prix auto race for the past five years.
Earlier this year, Soberón Kuri nearly sold Live Nation a controlling interest in OCESA for $480 million, but Live Nation terminated the stock purchase agreement in May amid the pandemic. Since February, CIE’s share price has dropped over 66% as government regulations have forced the company to cancel all events. That drove revenue down 77% from April to June, compared with the same time last year, according to company filings. While forced to issue layoffs and other cost reductions, Soberón Kuri is looking to livestreams, drive-in concerts and socially distanced shows in the interim, saying that he’s focused on making the company “more efficient and flexible,” and building greater potential for the future.
“Live experiences will return with a lot of power,” he says. “And we’ll be able to amplify these experiences in a much better way with the digital world. That’s the growth opportunity.”
What has your response been to the pandemic as you wait for concerts to restart?
We operate over 20 venues in Mexico, including Centro Banamex, the largest convention center, and we have the biggest event producer. We decided to design a temporary hospital, so we called sponsors and foundations, and built one inside Centro Banamex with 500 beds. We originally built it for three months, and now it will remain open through Dec. 15.
How about the live-event business?
We’ve worked on virtual concerts, and we’ve made new sponsorship deals to bring together new acts with their audience. [On Oct. 3], we did a virtual show with Alejandro Fernández where we sold over 30,000 tickets. And at the same time, we’re looking to reactivate the industry with drive-in concerts. We have three venues and will soon activate a fourth. But the real relevant step will be when we can activate socially distanced shows. We’re working with the government on creating appropriate protocols.
CIE is a massive company that produces live shows, special events and a Formula 1 race. How important is music?
Music is about 60% of the pie. And really, it’s our core business. It’s what has taught us to develop other skills in production and logistics. I founded this in the 1990s, and the desire behind this company was to try to professionalize live shows in Mexico with the standards of top global productions.
International shows had stopped coming to Mexico for many years because the government didn’t allow big gatherings. [Citing security and morality concerns, Mexico’s government banned massive concerts following the 1971 Festival de Avándaro.] We wanted to show that we could safely put together big shows and connect artists with their fans. The results were extraordinary. There was an audience avid for this experience.
What was your first big show?
OCESA’s coming out was three shows by INXS at the Sports Palace. We promoted it with all the radio stations in Mexico through a campaign where we told fans it depended on them — we had the permits to put on the show, but the fans had to behave so we could do this again. It was so beautiful to see 54,000 people behave perfectly over three days in what was almost a religious ceremony. After that, we brought Billy Joel, Sting, Bob Dylan…
The Rolling Stones were also a milestone, right?
We brought them in January 1995. But we went on sale in October 1994 and sold 240,000 tickets in a week. The problem was we sold in pesos and the guarantee was in dollars. In December, we had the famous peso crisis [when the country devalued its currency against the U.S. dollar, causing a financial crisis], but we forged on and transformed. Precisely 12 months later we went public, in December 1995. We were the only company that went public in our country that year. And sponsorships got much stronger as the solution to compensate for devaluation.
How is Mexico different from other markets?
As in other emergent markets, we had to build a pricing structure that was different, broader and would allow more democratic access. Mexico was one of the first markets to have diverse pricing. It was one of the first markets to have the “golden circle” — a very expensive block of premium tickets — that allowed you to sell a large number of much cheaper tickets in the back of the house. And to make it all viable, we had to develop a very important relationship with sponsors. This was key. Purchasing power in our [Latin] countries is substantially lower than that in the U.S. and England.
Is the reliance on sponsors bigger in Mexico than in the United States?
Without a doubt. You can compete in the top ticket price tier, but not the bottom tier. The cheapest ticket in an American venue is substantially more expensive than the cheapest ticket in a Mexican venue. That scale is what brings justice to the socioeconomic reality of one country versus the other.
Live Nation announced last year it was going to buy a 51% stake in OCESA. However, by the time the sale was approved, the country was in the midst of the COVID-19 crisis and Live Nation terminated the acquisition. Are conversations with Live Nation going to resume, or will another buyer emerge?
There’s an existing relationship with Live Nation. They own 33% of Ticketmaster Mexico, and they’ve been our partners for 10 years. That’s how we decided to work on a partnership where Televisa sold the stock it has in OCESA and we sold some of our percentage to do a joint venture with Live Nation. When the sale was authorized by the government, we were in the midst of the pandemic and Live Nation decided to suspend the purchase. The only thing I can tell you is we’re all weighing our options from the legal aspect, without forgetting we have a current partnership, and understanding the situation all promoters in the world are going through.
International acts account for about 25% of your concert business. What global trends are you excited about?
K-pop is crazy, and it’s a great example of how something can explode in different markets. And I’m very enthusiastic about urban music. We have to bring Drake here. There was always a little barrier with urban music; success in the U.S. did not necessarily translate to us. But I think we’re very close.
This interview was conducted in Spanish and translated into English.