Bon Jovi, NFL See Profit in an Intimate Fan ExperienceBy
Rocker brings 'Jovication' sideline to On Location Experiences
Venture also runs the NFL's event-and-hospitality business
Jon Bon Jovi was bored. Rock legends get a lot of days off between shows and studio sessions, and the icon of the 80s got to thinking: He’d play an acoustic set at a smaller venue and see if that didn’t create a more satisfying connection with his audience.
It worked. So well, in fact, that the 53-year-old rocker still known for big hair and even bigger spectacle turned it into a stand-alone business. Runaway Tours launched five years ago selling "Jovications" -- travel packages that included lodging, concert tickets and after-parties, along with Bon Jovi photo ops, autographs, and other swag. Its motto: "We super-serve the superfan."
Concept proven, Bon Jovi is now selling Runaway Tours to On Location Experiences, the independent spin-off of the National Football League’s event-and-hospitality business. Bon Jovi will join On Location as an investor and board member, sitting alongside NFL owners, as they try to turn events of all kinds into deluxe, once-in-a-lifetime experiences for superfans.
“I realized it was much bigger and broader than me -- and therefore any artist,” Bon Jovi said in an interview. “You became just a tent pole, an opportunity to get together like-minded folks under one roof and share something -- in this case it was my music. Then we as a business started to create other opportunities. I knew I could do this with any flag pole, i.e., the NFL, which is the cream of the crop."
The NFL earlier this year turned over control of its events-and-hospitality business, NFL On Location, to RedBird Capital Partners and Bruin Sports Capital. The deal gave the two firms a long-term license to operate the unit, and 32 Equity, which oversees the NFL’s private equity efforts, invested in the new entity.
For now, the company has Bon Jovi and the NFL, which generates more than $12 billion in annual revenue. On Location Experiences already offers what it describes as unique fan access to events like the Super Bowl, Pro Bowl, NFL Draft and international games. But that’s not enough.
“It’s a lot broader than a guy with a guitar and the NFL,” said Bon Jovi, who owned the Philadelphia Soul of the Arena Football League from 2004-08.
The business aims at a generation that would rather spend money on experiences than things, said Paul Swangard, the former managing director of the Warsaw Sports Marketing Center at the University of Oregon.
“As their discretionary income grows, so too will the market for experiences,” he said. “Building this business now, with the team and connections in place, gives them first mover advantage in what I expect will be a lucrative market.”
Like their rock-star partner, RedBird founder Gerry Cardinale, Bruin founder George Pyne and the company’s chief executive officer, former National Hockey League COO John Collins, whose first day is today, envision far more than ho-hum hospitality that provides for an airline ticket, hotel room and 50-yard-line seat.
“We’re skating to where the puck is going to be,” quoted Collins, architect of the NHL’s outdoor games. “We’re looking at things that bring people together: communities, nations, passions on a global basis.”
On the sports side, for instance, that might include Wimbledon, The Masters, the Olympics or the Champions League Final. On the entertainment side, it could be the Oscars, the Emmys, music festivals or Art Basel, said Cardinale. While at Goldman Sachs Group Inc., he led investments in several sports-related businesses, including Legends Hospitality, which is owned by the New York Yankees and Dallas Cowboys, and YES Network, 80 percent of which was sold to 21st Century Fox Inc. at a valuation of about $3 billion.
Pyne has a background in Nascar where, as Chief Operating Officer, he helped the league go mainstream. Later, he started a lucrative college division for sports marketing agency IMG.
“We’ve started with two anchor rights holders that are pretty iconic,” said Cardinale. Like the other principals, he declined to disclose financial terms of the Bon Jovi tie-up. “From that we should be able to start building other rights holders and other experiences and integrating them.”
Bon Jovi has been interested in the business side of football for decades. Last year he was part of a group that unsuccessfully bid on Buffalo’s NFL franchise, which ultimately went to Sabres owner Terry Pegula for a league-record $1.4 billion.
Although he didn’t land the team, Bon Jovi said his entertainer’s pitch to the NFL must have resonated. NFL Executive Vice President Eric Grubman, a former Goldman Sachs investment banker, approached Bon Jovi about other opportunities in pro football. Then he connected him to Cardinale and Pyne.
Bon Jovi may still own an NFL team one day. For now, he’ll learn first-hand what keeps the fans happy.
"Good songs are at the foundation of our success," he said. "But getting to the consumer in a way that makes it inclusive is not as easy as you think."
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.
- The Two Words That Will Help Get an Airline Upgrade Over the Phone
- Stocks Under Pressure as Dollar Pauses; Pound Dips: Markets Wrap
- Brighter U.S. Growth Outlook Emboldens Fed on Rate-Hike Course
- Stocks Turn Lower, Dollar Rises After Fed Minutes: Markets Wrap
- Risky Crypto Bet Dents Dennis Gartman's Retirement Account