On Location Experiences scales up with acquisition of rival PrimeSport
By Michael Smith
Sports Business Journal
On Location Experiences set out to transform the premium hospitality industry and largely has done that with the NFL and Super Bowl. Now the company formed in 2015 is broadening its reach across sports and entertainment with the acquisition of its strongest competitor, PrimeSport, the Atlanta-based agency with relationships that extend throughout college and professional sports.
PrimeSport built its hospitality and ticket-exchange business with official rights to some of the biggest sporting events and music festivals, ranging from the Ryder Cup and Daytona 500 to Coachella and other blockbuster concerts. It’s a major player in the college space, with rights to the College Football Playoff, Final Four and other NCAA championships, while its relationships with 24 NFL franchises will deepen On Location’s reach in that league as well.
The deal creates true scale, with customers having access to many more events at one stop. CEO John Collins said the goal is for the fan or the corporate client to use OLE as the platform to “build out a personal bucket list of events” for each year.
“The depth of the offerings we have now is pretty compelling,” Collins said. “The industrial logic of putting these two companies together makes sense. Together, we become much more important to content rights holders.”
The primary difference between the two companies has been their customer base and price points. On Location has more of a business-to-business model with most of its sales going to the corporate community, while PrimeSport has targeted the consumer market. On Location’s pricing runs in the thousands to tens of thousands per person for packages that include high-end entertainment. PrimeSport’s inventory starts with just a ticket and builds out from there.
For now, PrimeSport will continue to operate under its current name. A management team that will report to Collins is being assembled.
The newly combined company will project annual top-line revenue of $550 million with rights to 150 teams, leagues and events, and consists of more than 500 employees across its different divisions.
OLE did not disclose the purchase price, but the firm represents close to 60 percent of the $550 million in revenue, according to industry sources. The margin for earnings before interest, taxes, depreciation and amortization is in the 10 percent to 15 percent range, or $55 million to $82.5 million. On Location is borrowing the money to finance the acquisition, sources said.
Just two years ago when On Location was formed by RedBird Capital, Bruin Sports Capital and 32 Equity, the company was doing $35 million in total revenue with just a handful of people taking orders by phone.
“We’ve been, in the two years I’ve been here, accused of being a one-trick pony, although if you’re going to ride one pony, the NFL is a pretty good one,” Collins said. “It was time for us to achieve a critical level of scale on both the sports and the music side. … When you see how far the company has come, achieving that scale is an important next step.”
PrimeSport was founded in 2010 as a subsidiary to secondary ticketing company RazorGator and began combining tickets from its online marketplace with travel packages, which typically include flight, hotel, tickets and entertainment. Where PrimeSport has official status, such as the NCAA’s Final Four, its hospitality often is held inside the venue with access to food, drink and special guests such as former players and coaches.
“What PrimeSport does was the industry standard,” Collins said. “We came in with a little different approach. They grew up in the business focused on the ticket and monetizing the ticket, while we came up trying to create the whole experience. Putting us together makes us a pretty formidable company.”
With access to PrimeSport’s 24 NFL team relationships, On Location projects that it will have access to 5,000 to 6,000 more Super Bowl tickets through the clubs. That’s in addition to the 9,500 tickets On Location buys from the league as the official hospitality provider.
This gives On Location even greater flexibility with its ticket inventory, said Frank Supovitz, president and CEO of event production agency Fast Traffic, and formerly the NFL executive who oversaw On Location before it was acquired in 2015.
“What On Location can do now is read the market and determine if they need to move ticket inventory to PrimeSport or the other way, based on demand,” Supovitz said.
OLE said it will consider an international play that might move it into soccer events. And there remain some domestic targets in the hospitality space — QuintEvents and Colonnade Group are among others with strong pro and college businesses that have been vetted by OLE.
But integrating PrimeSport is front and center now. For the time being, PrimeSport will operate as a division within On Location, just as Anthony Travel, Nomadic Entertainment and previous OLE acquisitions do. CID Entertainment, a PrimeSport acquisition last year, is part of this arrangement.
PrimeSport CEO Tim Brosnan, the longtime MLB executive who took over leadership of the agency in February, decided to depart in the aftermath of the acquisition, although he may continue to consult with Collins.
Through the acquisition, Carlyle Group, which previously had a controlling stake in PrimeSport, will take on a minority share of On Location, along with current owners Gerry Cardinale’s RedBird Capital, George Pyne’s Bruin Sports Capital and the NFL owners’ 32 Equity fund. As part of the transaction, Jon Bon Jovi and his agency, Runaway Tours, were bought out by the other owners and no longer own a share of On Location.
Collins engineered the PrimeSport acquisition, with Paul Hastings LLP serving as legal counsel to On Location. Kirkland & Ellis was PrimeSport’s counsel.