Investment by World's Largest Provider of Live Entertainment in David Bowie's Pioneering Company To Create Niche-Specific Affinity Groups
SFX Entertainment, Inc. (NYSE: SFX), the world's largest live entertainment provider, today announced an investment in UltraStar Internet Services, LLC, the pioneering Internet company co-founded by rock legend David Bowie. SFX will have a substantial minority interest in UltraStar, with options to further increase their holdings.
UltraStar is revolutionizing the Internet by creating a subscription-based model that targets entertainment, sports, fashion and other types of affinity groups. The company specializes in developing private label ISPs and community and commerce oriented sites targeting these groups. Initial UltraStar web sites include David Bowie's web site BowieNet; the official web site of the New York Yankees, YankeesXtreme; and the official web site of the Baltimore Orioles, OriolesWorld.
The investment will enable both companies to expand their reach by building niche-specific affinity groups. UltraStar will be able to tap into SFX's extensive relationships with artists, celebrities, concert tours, and sporting and theatrical events. The company will also have access to SFX's consumer base of nearly 60 million people. SFX will be able to market its live entertainment utilizing a cutting-edge Internet business model.
"This is a joint venture in the truest sense," said Mike Ferrel, CEO of SFX Entertainment. "We are combining our strengths with the strengths of UltraStar to create first-rate products for affinity groups. SFX and UltraStar have developed a business model that will work for any organization, brand or service that consumers have an affinity for."
BowieNet, was UltraStar's first subscription-based online fan club and was launched in September 1998. Heralded as the "coolest ISP on the planet," by Ziff-Davis, BowieNet has consistently broken new ground. The site, which is currently showing an exclusive web version of the controversial art exhibit "Sensation," offers uncensored Internet access to David Bowie along with extensive proprietary content.
"We are proud to be affiliated with the world leader in live entertainment," said David Bowie, co-founder of UltraStar. "SFX's philosophy of bring the best in entertainment and sports directly to fans mirrors our philosophy of doing the same in cyberspace."
UltraStar will announce several additional entertainment, music and sports related subscription services in the first quarter of 2000. SFX Entertainment is the world's largest diversified promoter, producer and venue operator for live entertainment events. SFX owns, partially or entirely, and/or operates the largest network of venues in the country used principally for music concerts and other live entertainment events. Pro forma for all pending and completed acquisitions, SFX has 120 venues including 16 amphitheaters in all of the top 10 U.S. markets and owns or operates venues in 31 of the top 50 domestic markets overall. SFX also develops and manages touring Broadway shows, selling Broadway subscription series and individual productions in 55 markets. Through its large number of venues, its strong market presence and the long operating histories of the businesses it has acquired, SFX operates an integrated franchise that promotes and produces a broad variety of live entertainment events locally, regionally and nationally.
In 1998, on a Pro forma basis, nearly 60 million people attended approximately 24,000 events promoted and/or produced by SFX, including over 6,500 music concerts, 12,400 theatrical shows, 800 family entertainment shows and 450 specialized sports shows. In addition SFX is a leading fully integrated sports marketing and management company specializing in the representation of athletes and broadcasters, integrated event management, television programming and production and marketing consulting services in the sports, news and other entertainment industries.
The press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Because these statements apply to future events, they are subject to risks and uncertainties that could cause actual results to differ materially, including the company's absence of combined operating history and potential inability to integrate acquired businesses, need for additional financing, high degree of leverage, granting of rights to acquire certain portions of the company's operations, variable economic conditions and consumer tastes, risks associated with conducting business in foreign jurisdictions, regulatory risks and restrictions imposed by existing debt and future payment obligations. Important factors that could cause actual results to differ materially are described in the company's reports on Forms 10-K and 10-Q and other filings with the Securities and Exchange Commission.
