After 25 years of growing success, commitment to musical and technological avant-garde, and championing independence, Sónar is no longer an independent festival. At least, it is less so than before. In early July, it was announced that an American investment fund took control of the shareholding of Advance Music, the company that has organized it since its creation in 1994. It is the latest case of capital injection from investment funds into the local festival and leisure industry, but it is not the only one. Barcelona's festivals are in the crosshairs of international investors.
Last year, the Pachá empire (originally from Sitges, though indelibly associated with Ibiza) passed into the hands of Trilantic Capital Partners, an American investment fund that also holds positions in other Spanish companies, such as Talgo or Euskaltel.
In late June, it was also announced that Primavera Sound, which broke its attendance record this year with over 220,000 people, opened its shareholding to the American investment fund The Yucaipa Companies, a fund manager led by billionaire Ronald Burkle, a reference shareholder in companies such as Golden State Foods, Dominick's, Fred Meyer, or Soho House (the international chain of club-hotels also present in Barcelona). Although the figures have not been disclosed, the festival organization assures that the operation consisted of a minority acquisition that grants the investor two seats on the board of directors, but guarantees the festival's identity and independence.
The acquisition of part of Sónar's shareholding occurred shortly before its most successful edition, which exceeded 126,000 attendees, although the news was made public at the beginning of July. Neither the festival's management (formed by Ricard Robles, Sergi Caballero, and Enric Palau) nor the investment firm Providence Equity Partners (which boasts managing funds of 57 billion dollars) have wanted to make public the amount or the percentage of the business, but it is suggested that the fund would have control of between 60 and 80% of the capital, for a cost that would range between 15 and 20 million euros. This type of operation almost always contemplates a progressive control of the acquired company, with a transitional stage in which the original managers maintain control and direction. The silence on the part of Sónar regarding the operation has also been sepulchral in the face of inquiries from The New Barcelona Post. No comment.
The entertainment sector - especially that linked to products that require the physical presence of the consumer, and offer an experience as much as a product - are rapidly undertaking a globalization process similar to what previously affected other sectors.The operation by Providence has materialized through its subsidiary company Superstruct. The CEO of Superstruct is James Barton, founder of the Creamfields festival, and the fund's management team includes executives who have been linked to companies and entities such as Live Nation, Cirque du Soleil, Manchester United, and Inter Milan. These connections clearly illustrate how the entertainment sector - especially that linked to products requiring the physical presence of the consumer, and offering an experience as much as a product - is rapidly undertaking a globalization process similar to what previously affected other sectors. In a succinct statement, Barton confirmed the entry into Sónar without giving details, but stating: "Advanced Music has an enviable track record in the live entertainment industry. We have long admired their events, especially Sónar and Sónar+D, and we are confident that this collaboration will allow our platform to benefit from unique synergies and strengthen our market positioning. We look forward to working with the founders of Advanced Music to develop the full potential of this union."
Superstruct Entertainment also acquired the Hungarian festival Sziget in 2017 and has entered the company Elrow, dedicated to organizing parties and whose headquarters are also in Barcelona. Elrow is already immersed in a dizzying growth process, selling party-shows that include entertainment, decoration, and musical programming practically all over the world, with growth figures that predict tripling turnover in just one year.
In this way, Barcelona demonstrates that in the last two decades it has managed to create a first-class ecosystem of companies in the leisure and experiential entertainment sector, companies that have created a dynamic offer capable of attracting the attention of international investors. The next challenge is for these brands to grow on a global scale without losing their original identity or their connection to the city. For the founders, the dream of any entrepreneur has come true: receiving a capital injection that allows for growth and expansion uncertain by their own means, in addition to turning them, from small business owners - who mostly started from the base of the business - into winners. Not only in prestige, but also monetarily.