5 Possible Reasons Insomniac Could Sell to Live Nation

The Wall Street Journal is reporting that Live Nation Entertainment is close to finalizing a deal to acquire about a 50% stake in in Insomniac Events. There’s belief out there that it will actually be 51% to have a controlling stake in the company.

We all know why Live Nation Entertainment wants a piece of Insomniac and that’s because of the 345,000 tickets they sold for Electric Daisy Carnival. Insomniac is more than EDC though. They promote events all year on the West Coast along with expanding Electric Daisy Carnival to New York, Chicago, Orlando, Puerto Rico, Colorado, Texas and London in the UK.

There has been a bidding war going on between Live Nation Entertainment and SFX Entertainment to get their hands on all of the money around electronic music and this is just the latest.

The Wall Street Journal reported this:

SFX had offered at least $100 million for Insomniac, according to people familiar with the matter. Behind the fight over Insomniac is a scramble to capitalize on the growing popularity of EDM as technology drives interest in music created on computers rather than traditional instruments.

What does that mean? A safe assumption would mean that Pasquale wasn’t looking to cash out but instead stay involved in keeping his events running smoothly.

Live Nation has already purchased Hard Events and Cream Holdings Limited that hosts club nights in Ibiza and Creamfields festivals around the world.

SFX Entertainment has already purchased Beatport, Miami Marketing Group, Disco Donnie Presents, Dayglow Productions and most recently Dutch powerhouse ID&T.

Five Reasons Insomniac may have sold to Live Nation:

1. Could’ve been the only way EDC Las Vegas 2013 happened. Pasquale is still under indictment in Los Angeles for bribery and other charges in association with events at the LA Coliseum and nearby Sports Arena. He has pleaded not guilty to paying off a stadium manager to keep costs down but the matter is still ongoing. After EDC 2012 it was reported that Insomniac could lose their permit to continue with events at the Las Vegas Motor Speedway if Pasquale was convicted.

From the article:

EDC was run on a temporary carnival license this year. It’s first year in Vegas, in June, 2011, the license was held by the venue, Las Vegas Motor Speedway, Kulin said.

In all likelihood, the background check of Rotella would and should be completed before next year’s planned event, and then officials will be able to approve or deny a more permanent license.

However, Kulin noted that folks who have been convicted of felony crimes such as fraud, embezzlement and the like, would normally be denied.

Could there be trouble brewing? We could find out soon. There’s no way tickets for the 2013 event would have ever gone on sale if there wasn’t a plan in place whether it was the license going to Pasquale with Insomniac or with Live Nation Entertainment. This sale has been rumored for some time.

2. The bubble could burst at anytime. Electric Daisy Carnival 2013 Las Vegas tickets sold out BEFORE the lineup was released but this bubble of popularity for electronic dance music can burst at anytime. There was a time when rock music sold out football stadiums around the world and it was the same way. I was involved with the rave scene in the early 2000’s when there was also a boom and it burst quickly when politicians and the media portrayed the rave scene in a negative way. Joe Biden introduced the RAVE Act in 2003 that scared a lot of venue owners, cities and business owners from wanting to be associated with any of it. You can’t blame Pasqaule for wanting to put money into his bank account for retirement if any of those fades away.

3. Creates a more powerful company to keep it all going. This goes along with the bubble bursting. A bigger company has more power and money to keep it all alive. Insomniac has been around for a very long time but the times are always changing.

4. The festivals will become a bigger experience. Anyone who travels to Electric Daisy Carnival knows that it’s all about the experience being under the electric sky. There’s also no denying the fact that Tomorrowland and Ultra are massive players as well and the way they portray their events on YouTube makes them have a very big appeal. Creating a bigger experience and bigger production could enhance the experience for everyone involved. Pasquale hasn’t wanted to just put on a concert and having a company like Live Nation behind him could help with growth. Growth needs to occur in any business and that’s what we’ll see happen whether we like it or not around precious music.

5. Pasquale Rotella isn’t getting any younger and has a family now. He’s creating more stability for his company, employee’s and us the headliners.

Will there be losers in this? Of course. It’ll likely become tougher for up and coming producers and dj’s to crack the lineups of major events without a big management company. It’ll likely bring Ticketmaster into the fold adding higher service charge fee’s to our tickets. There’ll probably be more music festivals in Las Vegas taking away the magic of one Electric Daisy Carnival.

You know what though? Enjoy it all. Things will never be what they used to be but things now will always be new and fresh and awesome for someone.