An investment banker hired by Songkick approached an executive at Live Nation in June and pitched the sale of Songkick to Live Nation, a pitch that was quickly rejected, Amplify has learned.
The attempted sale came while Live Nation and Songkick are locked in a bitter lawsuit over the presale and fan club ticketing market in a suit filed in late 2015 that includes allegations of computer hacking, destruction of evidence, unfair practices and contractual interference on both sides.
Ultimately the music discovery app that powers Songkick was sold to Warner Music Group in a deal valued at $5 million — Songkick has retained its ticketing business and continues to pursue its case against Live Nation-owned Ticketmaster. Both sides are now fighting over how much information needs to be turned over from Songkick’s investors regarding the sale, with Ticketmaster attorneys sending out subpoenas and deposition requests that Songkick says violate a court order allowing discovery into the acquisition.
One of the items included in a filing from Tuesday (Dec. 5) is a June 11 email exchange between John Salter, a partner at the Raine Group, an investment bank that helped advise the WME acquisition of IMG in 2013, and Live Nation’s Chief Strategy Officer Jordan Zachary, pitching a meeting with Songkick CEO Matt Jones.
“Hey Jordan,” the letter from Salter reads, “I wanted to follow up on our conversation and let you know Matt and the team will be on the West Coast this week for meetings,” adding “if there is interest and we are in a range that makes sense for both parties, Matt and team are happy to come by the offices. Let me know if you want to connect tomorrow or Monday.”
An hour later, Zachary wrote back and told Salter he was passing on the meeting, writing “we discussed and no interest on our side.”
The fact that Songkick would try and sell itself to Live Nation in the middle of a contentious lawsuit seems strange, although company officials did pitch themselves for sale to a number of other companies including private equity firm Providence, Amazon, Deezer and StubHub, all who signed non-disclosure agreements to hear Jones’ pitch. The outreach to Live Nation was likely an attempt by Songkick to show that it had made a reasonable effort to shop the company.
Ten days after the outreach to Live Nation, Songkick COO Adam Schiffer sent an email to members of his staff, warning “by the end of next week, we’re expected to run out of cash.” He then goes on to detail what he has been offered so far — $2-$3 million from Vivendi, $2 million from Seatgeek, an earn out deal with no cash upfront from Deezer and a verbal offer in the “low seven digits” from Amazon.
“The last viable option is WMG,” Schiffer explained, noting Songkick had been offered $5 million for the company’s discovery platform, while investors would continue to control the ticketing service, which would be mothballed weeks later.
“While this bid will still fall short of our goal of $15-$20 million,” he wrote, “it is likely to be our best option.”