Bluestone is a top promoter of major international music artists in Israel.
Also, the two companies have ventured to launch Ticketmaster Israel as part of the formal relationship.
I view the deal as a continuation of Live Nation's selective and deliberate expansion in the Middle East, to capitalize on the entertainment needs of a large and youthful population.
Tel Aviv-based Bluestone was founded in 2014 by entertainment veterans Guy Beser, Shay Mor Yosef, Guy Oseary and Gadi Veinrib to promote international artists in Israel.
Guy Oseary, a noted popular music talent manager including U2 and Madonna, brought international contacts and 'mentorship' to Bluestone's management team.
Bluestone is part of the Bluestone Group, which promotes live events, on-campus student events and promotional activities.
Notable shows that Bluestone has promoted to-date include Rihanna, Bon Jovi, One Republic, Backstreet Boys, Juanes, Enrique Iglesias and others.
In 2017, major groups on tap include Aerosmith and Guns 'n' Roses.
Acquisition Terms, Rationale and Commentary
Deal terms were not disclosed by the parties.
The two companies announced a joint venture to form Ticketmaster Israel, which is already ticketing Bluestone's major events.
The addition of Israel has increased Ticketmaster's global reach to 28 countries.
Live Nation acquired Bluestone to streamline its online tools and platform to continue developing the Israel market for major live events.
In a statement, Guy Beser and Shay Mor Yosef also said, "We see a huge potential for international artists in Israel, especially as the venue infrastructure improves over the coming years."
So, the acquisition is a bet on Bluestone's ability to pull large audiences together for international acts in Israel.
Notably, the list of indoor arenas in Israel is growing:
- 2014 - Jerusalem Arena, 11,400 capacity plus standing room
- 2015 - Holon Toto Hall, 5,000 capacity plus standing room
- 2015 - Drive in Arena, 3,400 capacity plus standing room
Israel also has numerous stadiums with much higher capacities.
Obviously, venue security is a big issue. In 2014, a large-scale plot attributed to Hamas to attack Jerusalem's Teddy Stadium was successfully stopped.
Presumably, as Israel's ability to secure large venues improves, the desire of average citizens to attend concerts and entertainment acts to make the stop on their world tours creates a virtuous cycle of increased supply and demand for such profitable events.
The acquisition is a continuation of Live Nation's expansion in select parts of the Middle East.
In 2013, it started Ticketmaster in the UAE and in 2015 signed a deal in Qatar to operate two large arenas in a joint venture with Elan Group.
While a highly volatile region, the Middle East has a large percentage of young people, with 28% of the population aged between 15 and 29.
This demographic is Live Nation's main target demographic, as they are heavy consumers of musical and live entertainment.
Live Nation will likely continue to partner with and acquire stakes in Middle East entertainment concerns to selectively capitalize on the region's growth prospects.
It's a risky move due to the unpredictability of the Middle East, but Live Nation is developing market share and regional operating knowledge, which will serve it well in the coming years.
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