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New York businessman Robert F.X. Sillerman has made a significant investment in the Opium Group, which owns Mansion, Set, Mokai, Cameo, and Opium at the Seminole Hard Rock Hotel & Casino. Signs posted at Mokai and Set indicate that Sillerman's private company, SFX Entertainment, will soon be a co-owner of the clubs, and a source within the Opium Group acknowledged Sillerman's involvement.
Sillerman is also negotiating with Miami Management Group, which operates most of the rest of SoBe's notable clubs, including LIV, Story, and Arkadia.
"As of now, there is a deal in the works," said MMG's vice president of marketing, Jimmy Vargas. Though there's "not much other information besides that."
Sillerman's bold move would bring the world-renowned South Beach nightlife scene under the control of one financier — and it remains to be seen whether the consequences will be good or bad for clubgoers.
Sillerman made his fortune buying and selling radio stations, then revolutionized the concert industry by combining multiple promoters into one company, which he sold to Clear Channel and which later morphed into Live Nation. In June, after Sillerman made his first electronic-dance-music-related purchase (of Louisiana-based Disco Productions), Sillerman told the New York Times that he intended to spend up to $1 billion on EDM acquisitions and that he was already negotiating with some 50 companies.
Although those who have worked with Sillerman contend he is a backroom moneyman who avoids the limelight and is hands-off day-to-day operations, others, including DJ and producer Deadmau5, are concerned that consolidation heralds the demise of their scene.
"EDM has turned into a massively marketed cruise ship, and it's sinking fast," Deadmau5 wrote on his blog last summer after the Times article was published.
Some locals also raise a brow at what could be a monopoly on Miami's nightlife. Oscar G is one such local. The DJ, a longtime major player in the dance-music industry, says the idea of one man buying up the block makes him uneasy.
"I definitely think it would have an effect on the talent that is booked, because you're basically talking about one entity controlling most of the platforms, and that can never be a great idea," he said. "I look at it just as a shame for the audience more than anything else."
Still, not everyone is worried. Paul Campbell is cofounder and owner of Life in Color, a Miami company that produces a nationwide series of hugely popular EDM events advertised as "The World's Largest Paint Party." SFX Entertainment invested in Campbell's company in August 2012. Campbell wouldn't disclose details but insisted SFX would not interfere with the way Life in Color is run.
"The deal that they gave us is we run and operate our business, and we have resources to bring this thing bigger," he added. "There is no downside to it, not from a business perspective, not from a fan perspective, not for EDM as a scene.
"Every single person is able to run their business, and that's the first thing that [Sillerman] made clear."
Sillerman, who is in his mid-60s, grew up in the Riverdale section of the Bronx, according to a New York magazine profile. As a kid, he sold greeting cards door-to-door. He caught the "business bug" after his father declared bankruptcy when the boy was only 13. "When you're in your sixties and declare bankruptcy, it can be debilitating," Sillerman told New York, but [my father] never lost his optimism."
He majored in political science at Brandeis University in Boston, then rocketed through the business world. He bought radio stations as a young man, sold out to Westinghouse for $400 million in 1989, and started the first incarnation of SFX — called SFX Broadcasting — three years later, according to Bloomberg News.
Sillerman showed his acumen for politics by purchasing many more radio stations after the Telecommunications Act of 1996 allowed one person to own multiple stations in a single market. In 2005, Forbes named him the 375th richest American, with a net worth of $975 million.
Since then, he formed CKX, a company that bought 85 percent of Elvis Presley Enterprises, which included the King's music, likeness, and even the estate at Graceland, as well as 100 percent of Simon Fuller's 19 Entertainment, producer of American Idol.
Sillerman started SFX Entertainment, a revival of his early company's name, in July 2011. One of the aims, he told the New York Times, was to "use the Internet to connect fans of dance music."
These days, he owns a private nightclub and a $6 million Southampton mansion with an indoor pool and basketball court. He's also a championship volleyball player. Musically, there's little indication he's a fan of EDM. He has called himself a "child of the '60s" and said two of his favorite artists are Paul Simon and Bob Dylan. This past summer, he bought Broadway producer Livent.
"There is a wave of interest in attending concerts that has less to do with the specific music and more to do with the experience attached to the music," he told the Times.
Not all of Sillerman's ventures have panned out as well as his entertainment businesses.
Construction of a luxury resort on the Caribbean island Anguilla stalled in 2008 after the developer couldn't find additional lenders or buyers. Sillerman began the project in 2002, investing up to $180 million of his own money. The development was to include a 32-room hotel and 78 villas. He already had deposits from Simon Fuller, creator of American Idol, and Da Vinci Code author Dan Brown for the resort houses. Credit Suisse Group seized the property in 2010.
Sillerman also saw plans to build an Elvis Presley-themed casino/hotel in Las Vegas turn sour after financial markets collapsed in 2007 and 2008. His company, FX Real Estate Investors, defaulted on a $475 million loan for a 17.2-acre plot and later filed for bankruptcy. Sillerman was sued by investors for $150 million, claiming he and company insiders were engineering to wipe out shareholders' investments while retaining ownership of the property, according to Bloomberg News. The case was settled in early 2012 for $950,000, according to VegasInc.
Talknightlife, an online forum that follows Miami nightlife rumors, broke the news of Sillerman's involvement on January 11 when it posted a photo of a city notice that had been pasted outside Mokai on 23rd Street. The notice announced that there would a public hearing on January 22 regarding changing the name on the club's permit to SFX-Mokai Operating LLC. Two days later, Talknightlife published a second picture of a similar notice — again, about changing the permit to include SFX's name — outside Set, located on Lincoln Road.
News also broke last week that Sillerman has purchased the North American division of Holland-based ID&T Entertainment, a company that produces over-the-top EDM events called Sensation White across Europe. ID&T also produces Tomorrowland, a massive EDM festival held in Belgium each summer.
Yet the worry remains for the individual ticket buyer that the consolidation of EDM could lead to less variety and higher prices.
"I think that for consumers, it's not the greatest thing," said Aramis Lorie, partner at downtown Miami club Grand Central. "It eliminates the competitive nature of the business."
Jose D. Duran contributed to this report.
Recap from this weekend ::: Liv was dead, Mansion was dead, Story (bc it's always a long story to get through the door) was super dead. Glad to see everyone is happy.
Soon they're going to look like the clubs from Batman Beyond... see if anyone catches THAT reference lol
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OG and Aramis are right. This might not be good in the long run. Monopolies aren't a good thing. I know some vendors and they're not digging this.
And thanks New Times for properly citing us over at TNL. We might get into petty arguments on occasion, but you guys have always been cool with us regardless. We're fans over here in 'the community'!