Saudi Arabia’s sovereign wealth fund has built a $500m stake in battered concert promoter Live Nation, marking the Gulf kingdom’s latest big bet on a troubled company in recent weeks as it scours global markets for bargains.
The Public Investment Fund, the Saudi vehicle steered by Crown Prince Mohammed Bin Salman, has acquired a 5.7 per cent stake in the Los Angeles-based entertainment group, according to a US regulatory filing. Shares in Live Nation climbed 6.7 per cent to $40.78 just before midday in New York, giving it a market value of $8.8bn.
In recent weeks the PIF has snapped up stakes in beleaguered cruise line operator Carnival and European oil companies including Royal Dutch Shell and Total, whose shares have been hit by the collapse in crude prices. It also agreed a £300m deal to buy a majority stake in English Premier League football club Newcastle United.
Live Nation is among the hardest-hit media companies in the coronavirus crisis, with more than 30,000 events cancelled or postponed across the world.
Shares in the dominant concert promoter have dropped almost 50 per cent since February as its business came to a virtual standstill. Planned blockbuster tours by stars such as Justin Bieber and Taylor Swift have been scrapped, with summer festivals including Bonnaroo postponed after large gatherings were forbidden under coronavirus lockdowns.
Live Nation this month secured a new $120m credit facility, which chief executive Michael Rapino said would help “weather this difficult time”. The company, which last year made $11.5bn in revenue and whose largest shareholder is John Malone’s Liberty Media, has warned its sales will drop about 20 per cent in the first quarter of 2020.
The PIF has had a mixed record in direct investing, with a 2016 bet on ride-hailing group Uber still trading well below the $62.5bn valuation at which it bought in. It has also placed huge sums with private investors — including $45bn in SoftBank’s Vision Fund, whose bets on several start-ups have struggled badly in recent months.
The Saudi government has looked to open up the country’s entertainment sector and create a budding domestic film and entertainment industry. The country last month was set to hold its first film festival, recruiting big names such as directors Oliver Stone and Spike Lee. But the event, called the Red Sea film festival, was postponed.
But the PIF has also struggled with reputational issues in Hollywood. Endeavor, the Hollywood talent agency and owner of the Ultimate Fighting Championship, last year returned a $400m investment from the PIF following the killing of Washington Post journalist Jamal Khashoggi.