Pandora Gets A ‘Sirius’ Investment

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Pandora is not being acquired by Sirius XM Holdings.


Instead, as highly predicted on Thursday, the Oakland, Calif.-based Pandora confirmed that it has secured an agreement from SiriusXM to make a $480 million investment in the company.

At the same time, Pandora has decided to focus its attention to its streaming audio channels by agreeing to sell its Ticketfly division to Eventbrite for $200 million — a huge dip from the $450 million Pandora spent to purchase the company in October 2015.

Still, Pandora will actively remain a player in this space through a commercial agreement that allows Pandora to “substantially broaden the scale of its ticketing opportunities.”

The moves put to an end an investment offer from KKR that came on May 8, following the release of Pandora’s Q1 2017 earnings.

In combination, the Ticketfly sale and cash injection from Sirius XM “arm the company with a strong balance sheet, sharpen operational focus, and strengthen the company’s board of directors,” Sirius said in an early Friday announcement.

“This is a very significant juncture in Pandora’s journey,” said Tim Westergren, Pandora’s CEO and founder. “After years of innovation and hard work we now have critical pieces in place: A massive and highly engaged audience, a market-leading digital advertising business, a best-in-class product portfolio, and a robust balance sheet that gives us the flexibility we need to attack what is becoming a larger and larger opportunity as digital music enters a new golden age.”

He added, “With a loyal quarterly audience of nearly 100 million Americans, Pandora is a powerhouse in the music ecosystem and by far the leading player in the growing world of digital audio advertising — a category we believe is becoming increasingly prevalent in a world with young, hyper-mobile, multitasking consumers, and with a proliferation of connected devices with little or no user interface.”

“Pandora is now poised to advance to the next stage of the company’s lifecycle,” added Pandora Director Tim Leiweke. “We are pleased that the conclusion of our strategic review resulted in a major investment by a world class company like SiriusXM, and with the sale of Ticketfly, we will now redouble our focus on execution supported by a strong balance sheet.”

The company added that, with its “highly successful” personalized radio service, Pandora is “well positioned to create a hybrid advertising/subscription model that can achieve success where others in the subscription music category may have struggled.”

The struggling Pandora also maintained that its offerings “remain the gold standard for a truly personalized music listening experience.”

Ticketfly Sale Comes With Cash and Note

Eventbrite will acquire Pandora’s Ticketfly business for $200 million, funded through a combination of $150 million cash and a $50 million note payable to Pandora.

In connection with the closing, Pandora and Eventbrite, as noted above, are crafting a commercial agreement that Pandora believes will allow it to grow its ticketing business without directly operating it.

Pandora said this type of commercial agreement “is the best approach to ticketing, leveraging audience scale and targeting while minimizing the operational commitment.”

Pandora expects to close the Ticketfly transaction in Q3 2017.

The acquisition of Ticketfly came under the tenure of then-CEO Brian McAndrews. At the time, he noted the deal for a provider of ticketing and marketing software to event promoters and venues made sense for a company known for providing personalized streamed music to its users.

“Live music is booming, and we can grow the number of shows being staged and tickets being sold,” he noted at the time.

The Pandora acquisition of Ticketfly was in sync with the internet audio company’s goal to match artists with listeners and vice-versa — whether it’s coming through their earbuds or live on stage.

RBR + TVBR RELATED READ:

How Can Pandora Monetize New Assets?

How Pandora could monetize its Ticketfly, on-demand and core assets.

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Adam R Jacobson is a veteran radio industry journalist and advertising industry analyst with general, multicultural and Hispanic market expertise. From 1996 to 2006 he served as an editor at Radio & Records.