Growth in the US Live Music Market Coincides with Native American Tribe’s Investment in Indie Music Festival Producer, Danny Wimmer Presents (DWP)

Growth in the US Live Music Market Coincides with Native American Tribe’s Investment in Indie Music Festival Producer, Danny Wimmer Presents (DWP)

Growth in the US Live Music Market Coincides with Native American Tribe’s Investment in Indie Music Festival Producer, Danny Wimmer Presents (DWP)

March 4, 2015

The rising demand for live music events has drawn attention from unlikely investors: The United Auburn Indian Community (UAIC), a federally recognized Indian tribe located in the Sierra Nevada foothills of California.  In January of 2015, the UAIC finalized negotiations to purchase an equity stake in one of the nation’s largest producers of destination rock music festivals, Danny Wimmer Presents. The transaction was made through UAIC’s investment arm, whose other ventures include Northern California’s leading entertainment landmark, The Thunder Valley Casino Resort.

DWP has seen immense growth since its inception in 2007, doubling the number of events it produced between 2012 and 2013 alone, and increasing revenue by 51% from 2013 to 2014.  DWP produces 10 popular rock festivals annually, attracting public and commercial interest.  In 2014, its Rock on the Range event had over 120,000 attendees and its notable AFTERSHOCK Festival sold out completely.

The investment from UAIC allows DWP to expand its operations and portfolio, embarking into other music genres beyond its mainstay focus of rock.  The music fest producer plans to not only develop new festivals and live entertainment experiences, but also acquire already established events and promoters.   DWP announced its intentions to add up to five new music festivals to its 2015 lineup.  In a continued effort to diversify, DWP will also utilize the funding to fuel the growth of its ancillary endeavors, including DWP’s artist management division and subsidiary, Southern Hospitality Concessions.  The AFTERSHOCK producer is known for tying in sponsorships, travel packages, hotel rooms, and local food into its event tickets, making them an economic asset to the cities hosting their events and a pervasive brand ambassador for their sponsors.

No stranger to the promotions business, UAIC’s Thunder Valley Casino consistently produces events and entertainment throughout the year, presenting an annual summer concert series.   Although UAIC spokesman Doug Elmets reported that the DWP investment is not “designed to enhance entertainment offerings at Thunder Valley,” the casino will reap the rewards of persistent brand exposure and name recognition from DWP events.

The DWP partnership will also advance UAIC’s presence in the live entertainment industry and allow it to capitalize on the potential ROI from a burgeoning live music market. According to Billboard, revenues from live music already make up the majority of those earned within the entire music business, and “music festivals now make up the largest growth sector in the live events industry,” DWP Founder and Chairman Danny Wimmer remarked.

Interest in the live music space has been evident in recent transactions such as LiveNation Entertainment’s 2014 majority stake purchase of the Austin City Limits and Lollapalooza Music Festivals producer, C3 Presents. In 2013, the world’s largest producer of electronic dance music events, SFX Entertainment went public, raising $260 million.  That same year, SFX acquired a 50% interest in one of the biggest festival franchises worldwide, Rock in Rio.  With demand for festivals, concerts, and other live music experiences remaining strong, we may soon see other influential players enter this space.

For additional information on this transaction please read the recent article on Dealbook.

McCafferty & Company was a sole sell-side advisor to Danny Wimmer Presents.