Superstruct Entertainment Announces Revenue Growth
The organizer and promoter Superstruct Entertainment announced a remarkable revenue increase of 25.9% for 2023, a year ahead of its acquisition by the KKR investment giant in a £1.4 billion deal.
Based in London, Superstruct Entertainment Ltd submitted its income report for the 2023 financial year (ending December 31, 2023) to the British companies house on March 3, revealing an impressive revenue of £178.6 million ($222.2 million at the average exchange rate for 2023), an increase from £141.9 million in 2022.
The company reported operating losses of £33.26 million ($41.37 million), in contrast to an operating profit of £6.67 million the previous year.
Update: Superstruct Entertainment Ltd operates within a global trade organization but does not fully capture annual business performance worldwide. The parent company is Superstruct Holding Sarl, registered in Luxembourg.
Superstruct attributed the revenue growth of its British company to acquisitions of live music firms across various markets, alongside the post-pandemic recovery of the live music sector.
The company explained its weaker profit margins as a result of “increased sales costs due to overall inflation and operating expenses, which led to a general decline in gross profit.”
Superstruct Entertainment Ltd also incurred £31.4 million ($39.1 million) in expenses related to certain festivals that did not meet expectations.
Dividends and Festival Operations
The company’s directors have not recommended any dividends be paid at this time, continuing a trend from 2022 when no dividends were paid. Through various subsidiaries, Superstruct operates over 80 music festivals in the UK, Europe, and Australia.
The company’s extensive festival portfolio includes BoardMasters, Sziget, Sonar, Wacken Open Air, among others. In 2023, the total attendance at Superstruct festivals reached 1.55 million, marking a 14.4% year-on-year increase from 1.36 million in 2022.
In 2023, 46.6% of Superstruct Entertainment Ltd’s revenue was generated from operations in the UK, while 30.2% came from the rest of Europe, and the remainder from other regions globally.
Ticket sales amounted to £118.8 million ($147.8 million), showing a rise of 24.3% year-on-year, while income from sales of food, drinks, and merchandise totaled £40.18 million ($49.98 million), up 29.9% year-on-year. Sponsorship revenue reached £10.33 million ($12.85 million), reflecting a 6.7% year-on-year increase.
In June 2024, Superstruct was acquired by KKR in a £1.3 billion ($1.39 billion) deal. Later in the year, the CVC investment company joined KKR in owning Superstruct.
This change in ownership has not altered Superstruct’s growth strategy, characterized by acquisitions. In January, Superstruct acquired the live music platform Boiler Room from ticket company Cube.
According to the income report submitted this week, Superstruct paid £25 million ($31.8 million at the current exchange rate) for Boiler Room.
The income report highlights a series of acquisitions by Superstruct in 2023, including a 70% stake in SBH Events, the operator of the annual Snowbombing EDM festival in Austria, for £3.95 million plus a bonus.
The company also acquired a 70% stake in X The Tracks Ltd., the operator of the Cross the Tracks Funk, Soul, and Jazz Festival in London, for £1.7 million and 60% voting shares in Barcelona EDM Events promoter Centers of the Event for £3.48 million plus bonuses.
Additionally, Superstruct acquired a 67.7% stake, both directly and indirectly, in Mighty Hoopla Ltd., the London operator of the Mighty Hoopla pop music festival, for £4.05 million plus a bonus.
“We are still only in seven or eight markets, so who knows, maybe we will expand. But we would prefer to go deeper than wider ones, and we have more enterprises in the markets in which we are already in to leverage synergies,” said James Barton, of Superstruct.
Founded in 2017 by James Barton, former head of electronic music at Live Nation, and Roderick Schlosser, former president at Providence Equity, Superstruct’s acquisition strategy has propelled it to becoming the second-largest festival promoter in the world in a relatively short time span.
In an interview with the International Live Music Conference (ILMC) last month, Barton credited Superstruct’s relationship with Providence Equity for its ability to maintain its acquisition strategy during the downturn in live music.
“Providence was an incredible partner. They supported us from the very beginning and through COVID, continuing to invest in us as a business and in the company,” he stated, as reported by IQ Mag.
“However, investors do have an expiration date,” he remarked, referring to KKR’s acquisition of Superstruct.
“We are now in a new era of our business with KKR and CVC. Although we remain in only seven or eight markets, we prefer to deepen our presence rather than widening it, ensuring we have more operations in the markets where we currently operate to create synergy,” Barton explained.
“We won’t be going: ‘South America is really hot, let’s hop on a plane and see how we can get there.’ Instead, we focus on where we can succeed and who our reliable partners are,” he added.
