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investing in live music

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Hey! On today’s Trapital episode I switched things up. It’s a solo episode about a few topics that have been on my mind. This memo is a breakdown on one of those topics: Saudi Arabia and its investment in music.

You can listen to the episode here or read below for some takeaways.

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why Saudi Arabia will invest more in music

Saudi Arabia’s sovereign wealth fund has made its presence known in sports, from LIV Golf, deals with soccer’s biggest stars, the acquisition of Newcastle United, and many more deals. We’ve also seen its investments in tech and gaming, like Uber, Activision Blizzard, and Nintendo.

But the nation’s moves in music have been quieter. In April 2020 (early pandemic), The Public Investment Fund (PIF) bought a $500 million stake in Live Nation, which is likely worth north of $1 billion today. This August, SRMG Ventures made a $5 million investment in Anghami, the Arab-based music streaming service. Now that the pandemic is behind us and live entertainment revenue has hit record-breaking levels, these investments may soon ramp up.

In entertainment, the fund has targeted areas with big-name stars attached to fragmented organizations ripe for disruption.

Golf was a perfect case study. LIV Golf lured away popular golfers like Brooks Koepka and Dustin Johnson from the PGA Tour—a league often criticized for having too few tournaments where its elite golfers all show up. LIV aimed to address this with more tournaments and money than golfers experienced on the PGA Tour. This was the first domino to fall in a series of events that led to the LIV-PGA merger in June 2023.

Music isn’t quite like golf, but there are similarities. The major record labels own valuable back catalogs, and the major live event promoters and ticketing companies have exclusive deals with large venues and superstars, making those areas harder to disrupt. Minority investments make more sense there. But the rest of the industry is more fragmented. There’s opportunity in live entertainment, especially with music festivals.

Festivals feature the superstar artists who attract fans. The events make money from the same revenue sources as live sports, including tickets, sponsors, concession, and broadcast deals. Yet the ownership for festivals is less consolidated. The major live events promoters own some of the tentpole franchise festivals in the U.S., but many of the others are standalone businesses. New festivals have steep upfront costs, and often takes a few years to reach profitability (and many don’t last long enough to get there).

There are two main ways that PIF could go about this. The fund can launch more of its own music festivals, potentially in Riyadh or elsewhere in the Middle East. Saudi Arabia’s Soundstorm music festival, which started in 2019, already attracts more than triple the crowd that attends Glastonbury. Artists like Rick Ross, David Guetta, and Bruno Mars performed there last year. More festivals at this level will likely pop up in the kingdom.

With the luxury of capital, a new festival can operate like a well-funded startup with years of runway. That won’t guarantee success, but it buys the festival time. It can also acquire or invest in existing music festivals across the world.

Saudi Arabia may also push for major artists to set up short-term residencies in the region. The broader goal is for the nation to improve its global standing. Becoming a “destination” is part of that goal.

We might be far away from an American superstar performer having a 15-show residency in Saudi Arabia, but I won’t be surprised if it happens eventually.

You can listen to the full episode here where we also discuss:

• why the ‘song of the summer’ is no more
• the decline of the pop star
• new trends with podcaster and creators

​Listen to the episode here or watch below:

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