Robert Sillerman is going viral.
The former SFX chairman and CEO is betting big on clickbait sites and viral memes with his company Function(x), which is consolidating content networks into a platform aimed at connecting advertisers and sponsors with tens of millions of millennials who click on headlines like “Basketball Player With No Arms Drains Jumpers From Downtown” and “His Cat Makes Him Do This Adorable Thing Every Time He Leaves The House.”
Over the last year, Function(x) has been buying up aggregate content sites like women’s news site wetpaint.com and millennial sports site rantsports.com, both of which pull video and viral stories from around the web and package them into short, shareable items optimized for social media channels like Facebook and Twitter.
“Consumer appetite for content is as voracious as ever and showing no signs of relenting, as content is devoured by consumers globally at a blistering pace every minute of the day,” a March 14 press release from Function(x) explains. “In even simpler terms: content is king and distribution is a queen of equal power.”
On March 8, Function(x) announced that it had acquired BumpClick, “a media company that uses technology and industry relationships to maximize distribution and revenue from its network of websites and social assets that total more than 60M social followers.” BumpClick owns viralnova.com, a clickbait site chock-full of pet videos, prank memes and other content meant to either inspire or enrage the reader to keep clicking. The plan is to build a network of clickbait sites capable of reaching tens of millions of people, optimized for digital advertisers and marketers hoping to reach a millennial, uber-connected audience.
Function(x) “led by media mogul Robert FX Sillerman, is aggressively building a portfolio of assets in a bid to corral viewers and capture as much of that market as possible,” a release from the company reads.
As Sillerman tackles the viral world, he’s still facing lawsuits and legal action from SFX, the EDM-focused festival company he took public in 2013 before filing for bankruptcy in 2016. SFX has since emerged with new owners, a new name (LiveStyle) and a new leader in former AEG Live CEO Randy Phillips. Although Sillerman has been forced to sever ties with the company, he still faces a lawsuit from angry investors as well as a legal filing from a long-time friend who says Sillerman never repaid a $2.5 million loan. Sillerman also faces potential legal action from LiveStyle — as part of its bankruptcy proceedings, the company’s debtors approved a litigation committee to pursue legal action against Sillerman and other executives at the company.
His legal follies haven’t slowed Sillerman’s appetite for new opportunities — in a press release announcing Function(x)’s acquisition of viralnova.com, Sillerman told potential investors the company’s “recently completed public offering registration statement,” shows that “strategic acquisitions such as BumpClick are an integral part of our strategy.”
Function(X) is traded on the NASDAQ as FNCX and earlier this month announced the closing of a new round of 4.6 million shares of its common stock priced at $1.05 per common share. Following the closing, Sillerman converted approximately $36 million of preferred equity into common stock at a price of $2.34 a share, resulting in the issuance of 15.8 million shares to Sillerman’s affiliates.
“With these conversions, I am able to deliver upon a promise that I made to investors when we set out on this journey,” Sillerman said in a press release. “These conversions reinforce my commitment and serve as a vote of confidence in the direction the Company is headed. As evidenced by the growth of revenue in our core publishing business, FNCX is positioned to become a preeminent Digital Media Platform. With the conversion of my preferred equity we can begin the acquisition program that is core to our long-term strategy.”