SHOW ME THE MONEY
Apparently Sillerman has agreed to acquire top artist management powerhouse The Firm. But, sources said, the deal is not a done just yet, despite reports that appeared Monday morning.
The former SFX chief has formed his own talent management company, FXM, and like he did with promoter SFX, plans to build the company through rapid purchases.
The Firm, whose clients include Backstreet Boys, Korn, Limp Bizkit, Martin Lawrence, Ice Cube and Michael Jackson, was Sillerman's first target, as we first reported (hitsdailydouble.com, 11/10).
"Contrary to an article that appeared on Inside.com Monday, acquisition of The Firm by Sillerman's new entity has not closed," a spokesman at The Firm told Hitsdailydouble.com.
But in a statement released late Monday, Sillerman said, "The Firm, whose name will not change, will continue to provide the vision and service that its clients and their fans have come to expect. However, they will benefit greatly from the expanded resources FXM will afford them. Over the next few weeks, we look forward to several more major announcements," he said, referring to the other management companies that Sillerman has set his sights on.
"The digital revolution provides a unique opportunity for artists to connect with their fans in new and unprecedented ways," Sillerman said. "We will continue to provide unparalleled service to our clients. Moreover, the resources we expect to bring to bear will add to the opportunities for our clients and their fans alike."
While no one denies talks between Sillerman, who already owns 16% of The Firm, and company principals Jeff Kwatinetz and Mike Green have taken place over the last few months, said deal has yet to close, sources said.
Sources claim Sillerman is offering six-to-eight-times annual earnings—half in cash, half in stock in his new company—to the management companies he is eyeing. But those figures are being disputed as well, as some claim to have been offered more, insiders said. Terms of any deals, however, were not officially released.
Meanwhile, former SFX CEO Mike Ferrel and Mitch Slater of Delsner/Slater Enterprises are joining Sillerman at the new FXM. Also coming to FXM are former SFX executives Howard Tytel and Tom Benson.
Sillerman previously founded and served as executive chairman of SFX, which was acquired by Clear Channel Communications in a $4.4 billion merger in May. According to Inside.com, the ex-SFX head is now in cahoots with Internet rich guy and Dallas Mavericks owner Mark Cuban.
Sillerman is also said to be interested in Howard Kaufman's H.K. (Jimmy Buffett, Aerosmith, Lenny Kravitz, Stevie Nicks, Steely Dan, Mick Jagger) and "The Sopranos" executive producer and ex-Bernie Brillstein partner Brad Grey's management firm. Word is that Q Prime's Cliff Burnstein and Peter Mensch (Metallica, Stone Temple Pilots, Red Hot Chili Peppers) are seriously considering taking Sillerman up on his offer, which includes a five-year contract for the principals, as well.
But wonderers are wondering why Sillerman has yet to move forward with the funding for these and other deals. Has he decided that this business model is not attractive to Wall Street and is second-guessing the move? More to come in the near future for sure.
