Three private equity firms are in talks to buy a significant stake in ticketing company Dice, according to sources who have spoken to Bloomberg.
Dice has reportedly initiated formal talks with possible investors after being approached by an interested buyer. One of the company’s biggest current investors, Softbank, is reportedly keen to sell its stake. Any deal would value the Dice business at hundreds of millions of dollars.
The live music business went through two years of unprecedented challenges during the COVID pandemic, of course. However, since then, when it comes to large-scale shows and venues, the sector has very much bounced back. Which has resulted in renewed interest in the live entertainment market among investors.
As proof of that renewed interest, Bloomberg’s report notes KKR’s recent acquisition of festivals business Superstruct and Goldman Sachs acquiring a majority stake in live event production company TAIT. Although in both those cases, a private equity company was also the seller. Indeed it was the same private equity company, Providence Equity Partners.
As well as KKR, CVC Capital Partners, Blackstone and EQT are all known to be pursuing deals in live entertainment, with a recent deep-dive from IQ Magazine charting the increasingly close links between live music and private equity.
Despite the post-pandemic bounce back, there remain plenty of challenges in the live music business. First, while large-scale shows and venues are doing better than ever, the grassroots live sector is in crisis. And even some mid-tier tours are struggling to break even.
Plus, for start-ups, challengers and independent players, the dominance of Live Nation is a significant factor in many markets, especially for any company trying to compete with the live giant’s ticketing business Ticketmaster, which is what Dice has been trying to do.
Bloomberg’s report speculates that one or more private equity companies might look to buy up a number of businesses in the live music industry and then merge them to create a group that can take on Live Nation. That might be ambitious. Vivendi recently sold off See Tickets and its festivals division after concluding that it would never be in a position to properly compete with Live Nation or the other big player in live entertainment, AEG.
However, the calculus of the sector may be changing after the US Department Of Justice launched legal action to break up Live Nation and force the sale of Ticketmaster, citing the live giant’s market dominance and allegations of anticompetitive conduct. Even if that litigation doesn’t result in such a dramatic outcome, it could make Live Nation wary of expanding too much more through acquisition, which may result in opportunities for investors interested in the sector.
One way a private equity firm could potentially take on Live Nation would be to acquire or partner with either AEG or Eventim, another key player in live music and ticketing in Europe, and then rapidly scale the business through acquisition, as Live Nation has in recent decades.
For anyone looking to make that move, Dice could be a shrewd part of a wider portfolio, as a company that has leveraged a technology-first approach to win over younger ticket buyers.