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DiCesare-Engler Sold

SFX TO BUY PROMOTER DICESARE-ENGLER

Pittsburgh Post-Gazette Wednesday, August 5, 1998

Author: SCOTT MERVIS, POST-GAZETTE STAFF WRITER

SFX Chairman Robert F.X. Sillerman recently told U.S. News and World Report that the new entertainment giant was trying to create ``the A-Team of promoters.''

Add DiCesare-Engler to the A-Team.

SFX Entertainment announced yesterday that it would acquire DiCesare-Engler Productions, Pittsburgh's largest and longest-running concert promoter, for an undisclosed price.

The purchase is part of SFX's bid to buy out local promoters across the country and become the undisputed king of the concert business.

Although the name DiCesare-Engler will be retained, the sale means the split of a 24-year partnership between Rich Engler, 51, and Pat DiCesare, 60.

``It was a decision that we all had to make, and everybody's happy,'' Engler said yesterday.

Engler said that, for himself and DiCesare-Engler partner Ed Traversari, it will be ``business as usual'' in booking and promoting concerts.

DiCesare plans to continue presenting the Three Rivers Regatta, which the promoters took over this year.

Thus far, the SFX philosophy has been to allow the local promoters to run as nearly autonomous units, reporting to the New York-based company.

Engler and Traversari will continue to manage the I.C. Light Amphitheatre, where it presents concerts and festivals, and book shows into venues such as the A.J. Palumbo Center, the Civic Arena and Three Rivers Stadium.

The SFX buying spree began late last year when it purchased Pace Entertainment, the Houston-based corporation that operates the Coca-Cola Star Lake Amphitheatre, giving it more than 47 venues in 22 markets across the country. SFX has since spent more than $600 million acquiring industry heavies, including Bill Graham Presents of San Francisco, New York's Delsener/Slater Enterprises, Boston's Blackstone Entertainment and Atlanta's Concert-Southern Productions of Atlanta, among other promoters.

In addition to operating Star Lake, SFX Entertainment, through Pace, controls 70 percent of the Pittsburgh Broadway Series, sharing it with the Pittsburgh Cultural Trust and the Pittsburgh Symphony. As part of its sports expansion, SFX also presents motorsports and monster truck shows.

Tom Rooney, a Pittsburgh native and president of the PACE facilities group, explained that DiCesare-Engler and PACE, which already coordinated bookings at Star Lake, will operate as they always did.

``We didn't buy the company to put shackles on Rich,'' Rooney said. ``He's very innovative, very energetic, and he's got a lot of ideas that they haven't been able to bring to the forefront. We'll be providing him the capital to chase down these ideas.''

`` DiCesare-Engler is able to take the company to the next level,'' Engler said. ``Obviously, SFX has the wherewithal to do that.''

If anything, Rooney sees the local company, which employs approximately 12 full-time people, expanding its personnel.

Rooney said that the purchase of DiCesare-Engler would result in more concerts and events coming into Pittsburgh, but a lot of the details were still to be negotiated.

``We're both immersed in summer seasons and it's going to take until the fall to sort this thing out,'' Rooney said. ``It comes at a time when everyone's in high gear.''

To expand into concert and sports entertainment, SFX in July 1997 sold its web of radio stations, which included Pittsburgh's WDVE, WXDX, WJJJ, WVTY and WTAE, to Capstar, which in turn sold all but WTAE to Chancellor Media.

With that revenue, SFX even bought a piece of Tommy Pickles and Michael Flatley, as its family entertainment division presents such tours as ``Rugrats'' and ``The Lord of the Dance.''

More recently, SFX has taken the first steps into artist representation by acquiring Falk Associates Management Enterprises, which represents Michael Jordan, and the Marquee Group, the booking agency for acts like Metallica, Billy Joel and Michael Bolton.

``The potential conflict of interest is very obvious,'' said Gary Bongiovanni, editor of the concert trade publication Pollstar. ``If you're SFX and you're negotiating to buy a Metallica date, you represent the act . . . there is certainly a vertical-horizontal integration going on here.''

Despite its size, the SFX-Pace- DiCesare-Engler power trio still faces the challenge in this market of scrappy Pittsburgh promoters like Next Big Thing and Elko Concerts, and the occasional inroad by Philadelphia's Electric Factory Concerts.

Bongiovanni says the deal ``could be a good thing for a company like Next Big Thing, because there's always going to be a need for an alternative to the Goliath of the business. The agents will possibly look to feed Next Big Thing some shows, so they can be a viable alternative to SFX, so they're not given a take-it-or-leave-it offer to play Pittsburgh.''

Robin Fernandez, president of Sportsrock Entertainment, which owns Next Big Thing, said he didn't know if SFX would lose interest in doing some of the smaller shows. ``If that's the case, I think it opens up a great opportunity for Next Big Thing and for Elko. At the same time, I think it's great for Rich. This is the kind of thing that you work toward for so many years.''

Asked about SFX's growing control of the concert industry, Engler said, ``Will they keep acquiring companies like ours? Who knows. At some point, they will say, `OK, we're satisfied, we have the team in place, let's run.' ''


Pittsburgh Tribune-Review

July 14, 1998

SFX may purchase promoter

DiCesare Engler partners could break up in buyout

By Lynne Margolis

STAFF WRITER

Pittsburgh-based DiCesare Engler Productions may become the latest acquisition of SFX Entertainment, the former broadcasting giant that has been binge-buying concert promotion companies all over the country.

Though reports of the buyout remained unconfirmed Monday, the deal reportedly involves a split among partners Pat DiCesare, Rich Engler and Ed Traversari.

Engler and Traversari are expected to join SFX's recently acquired PACE Entertainment Group in some capacity, perhaps as consultants, while DiCesare may continue operating the company's festivals, including the Pittsburgh Three Rivers Regatta. The promoter took over management of the troubled regatta early this year after the regatta's former chairman was ousted and its board of directors reorganized.

DiCesare Engler also operates a number of festivals and concerts at its I.C. Light Amphitheatre in Station Square, South Side. It also books shows at the A.J. Palumbo Center and Civic Arena, both Uptown, at Metropol in the Strip District, and occasionally at other venues, from Three Rivers Stadium on the North Side to Graffiti, an Oakland club.

Its concert promotion activities stretch to Johnstown, where it has booked shows at the Johnstown War Memorial; Centre County, where it books events at Penn State University's Bryce Jordan Center in State College and at Tussey Mountain Amphitheatre in Boalsburg; and Beaver County, where it has staged concerts at the Golden Dome at Penn State's Beaver campus.

DiCesare Engler also is listed as co-promoter for many shows at Coca-Cola Star Lake Amphitheatre in Burgettstown, a PACE property. That arrangement is widely understood to be not so much an active partnership as what's known in the concert industry as a noncompete agreement.

Though principals of PACE and DiCesare Engler continue to deny buyout rumors, DiCesare Engler has long been considered ripe for swallowing by some bigger-fish promotions company. Several of those companies have themselves recently fallen prey to the lure of SFX's cash.

After selling off its extensive radio holdings - including several stations it had purchased in Pittsburgh - SFX last year bought Delsener-Slater of New York, Bill Graham Presents of San Francisco, Sunshine Promotions of Indianapolis, Contemporary Group of St. Louis and Concerts/Southern Promotions of Atlanta, as well as SJS Entertainment and the Network Magazine Group. This year, SFX bought Blackstone Entertainment of Boston and Avalon Attractions of Los Angeles.

Its biggest purchase by far, however, was PACE Entertainment, the Houston-based company that owns and operates concert venues throughout the country, and also is involved in such endeavors as the Pittsburgh Broadway Series.

"All I can say is, SFX talks to a lot of parties," said Tim Klahs, director of investor relations for SFX. Asked at what point he might have more to say, he answered, "When we do, hopefully, we'll release (a statement)."

Initially contacted several weeks ago, Klahs had said, "Watch the tickers," referring to stock reports. SFX is a publicly held company.

Tom Rooney, president and chief operating officer of PACE Facilities Group, said through a spokesman that he stands by previous statements that SFX has not agreed to buy DiCesare Engler. When asked if he meant there was no agreement "yet," the spokesman, Star Lake publicist Joe Katrencik said, "No comment."

DiCesare Engler's Traversari also said, "No comment."

SFX picked up PACE in December for $130 million. If it clinches a deal for DiCesare Engler, SFX will effectively eliminate its major competition in the area and be able to put acts it books into its own venues.

While lack of competition theoretically could drive ticket prices down because bidding wars for acts would be eliminated, industry experts agree that's unlikely to happen.