One week to the day after a revised estimate in 1999 earnings prompted a 19 percent stock decline, SFX Entertainment has announced some encouraging news for its stockholders: The first of several key sponsorships that could lead to a predicted 25 percent earnings increase in FY 2000.
A joint announcement made Dec. 9 by Budweiser and SFX Marketing provides a broad outline of a three year partnership between the ``King of Beers'' and SFX, a leading operator of concert and entertainment venues.
As described earlier, SFX Entertainment, Inc. is an integrated franchise that promotes and produces a broad variety of live entertainment events locally, regionally and nationally. SFX has 120 venues overall, and owns or operates venues in 31 of the top 50 domestic markets. The SFX Theatrical Division develops and manages touring Broadway shows, and sells Broadway subscription series and individual productions in 55 markets.
``We're proud to join the world's best-selling beer with the world's leading promoter, producer and presenter of live entertainment,'' said Anheuser Busch's vice-president Tim Schoen. ``In cities across the country, our consumers will be engaged by consistent Budweiser quality messages when they attend events at SFX venues." Both companies report that as a presenting sponsor, Budweiser will receive brand mentions in SFX produced local television, print and radio advertising as well as on-site signage and program ads at each venue. Credit will appear as "The Budweiser Concerts Series presents..." Along with the exclusive beer sponsorship, Anheuser-Busch acquired the "non-alcohol malt beverage category" for its O'Doul's and O'Doul's Amber brands. While the sweeping acquisition program undertaken by SFX over the past several months has increased the company's reach into sports and entertainment, some Wall Street sources have described the program as a simple roll-up which, eventually, would see a downturn.
Last week's stock value decline was one indication that a period of adjustment had begun. Yet, at the same time, SFX's promise of major sponsorships founded the basis for estimates of increased earnings in 2000. In a paper statement, SFX president and chief executive officer Michael G. Ferrel referenced the importance of the sponsorship pact to SFX.
``This is one of SFX's largest deals ever and it is particularly exciting because it will move our relationship with Anheuser-Busch beyond traditional sponsorship elements within the venues alone," Ferrel said. "Plans include creating specially-targeted programs and tours, as well as producing special events together.'' Already a leader in entertainment marketing, Anheuser-Busch, the world's largest brewer, has been a sponsor of numerous national tours.
-- By Murdoch McBride
