A media titan who made billions buying up everything from Graceland to American Idol is poised to become the Tsar of Miami Beach nightlife.
New York businessman Robert F. X. Sillerman has made a significant investment in the Opium Group -- owners of Mansion, Set, Mokai, Cameo, and Opium at the Seminole Hard Rock Hotel and Casino, sources confirmed Thursday. Signs at Mokai and Set confirm the role of Sillerman's company, SFX Entertainment.
Sillerman, who in June pledged to spend $1 billion on electronic dance music (EDM), is also negotiating with Miami Management Group, which operate virtually the rest of SoBe's 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."
The bold move to bring the world renowned South Beach nightlife scene under the control of one financier has drawn mixed reviews. While those who have worked with Sillerman contend he is a back room money man who avoids the limelight and major changes at the places he owns, others including the DJ and producer Deadmau5 are concerned consolidation heralds the demise of EDM.
"EDM has turned into a massively marketed cruise ship, and it's sinking fast," Deadmau5 wrote on his blog last summer after news of Sillerman's intentions to dominate the EDM movement were made public in a New York Times story.
Paul Campbell is co-founder and owner of Life In Color, a Miami company that produces a nationwide series of hugely popular EDM events called Day Glow advertised as "The World's Largest Paint Party." SFX Entertainment invested in the company in August 2012, though Campbell wouldn't disclose the details.
"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."
Ed Tagliaferri, a New York City spokesperson for Sillerman, declined to comment on the specifics of the deals as did Opium Group spokesperson Vanessa Menkes.
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.
He showed his acumen for politics by purchasing many more radio stations after the Telecommunications Act of 1996 allowed owners of multiple stations in single markets. In 2005, Forbes named him the 375th richest American, with a net worth of $975 million.
Since then, he has 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 $6 million Southampton mansion with an indoor pool and basketball court and a private disco. He is also championship volleyball player. Musically, he calls himself a "child of the Sixties" and notes that two of his favorite artists, Paul Simon and Bob Dylan, personify that era.
This past summer, he bought Broadway producer Livent and announced his intention to spend $1 billion in a year on EDM for the new SFX. "There is a wave of interest in attending concerts that
have less to do with the specific music and more to do with the experience attached to the music," he told the Times.
Several EDM blogs have leaked out the news of Sillerman's purchases over the last couple days. Talknightlife, an online forum that follows Miami nightlife rumors, broke the news on January 11 when it posted a notice that had been pasted outside Mokai on 23rd Street. It listed the company name as SFX-Mokai Operating LLC. Two days later, Talknightlife published a second notice with SFX's name outside Set, which is on Lincoln Road.
Another blog, Dancing Astronaut, headlined a January 15 post: "Robert Sillerman buys large stake in Miami's the Opium Group, EDM arms heats up."
News also broke this week that Sillerman has also 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 does Tomorrowland, a massive EDM festival held in Belgium each summer.
For the individual ticket buyer 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 club Grand Central. "It eliminates the competitive nature of the business."
Brigitte Respaut Degrave