What Penske Media's 50% Stake in SXSW Means for the Festival, and Its New Owner

When South by Southwest returns to downtown Austin, Texas, on March 11, the festival—renowned in part for its reputation as a launchpad for buzzy debuts—will be undergoing perhaps the most significant reinvention in its own 35-year history. In addition to returning to an in-person format for the first time since 2019, this year also marks the first iteration of SXSW under its new ownership after the Penske Media Corp. purchased a 50% stake in the festival in April 2021. Before its last-minute cancellation in March 2020, which cost the company millions in lost revenue, SXSW had been wholly owned by its original founders. For PMC, a holding company that houses more than two dozen publications, the acquisition was an opportunity to net a consumer-facing event whose focus aligned with several of its most iconic brands, said evp of product and technology Jenny Connelly. The company, which also operates a suite of trade industry events like Variety's Power of Women, has no intention of tampering with the SXSW formula. In fact, most festivalgoers will see little indication that ownership even changed hands. “Our thing is buying brands that are already great and helping them be profitable,” Connelly said. “Austin—crunchy, organic—nothing about that should change, ever. We want to go in there and help them with the things they need help with so that it can exist forever. That's it.” But PMC does intend to use its majority stake in the festival to boost the visibility of several of its editorial titles, including music and entertainment publishers Billboard, Sportico, Rolling Stone and Vibe. All four media organizations will be unveiling new or expanded activations during the 10-day convention, including the launch of The Stage, a three-day music festival from Billboard. Other PMC properties, including Variety and Deadline, will also host pop-ups. While ambitious in its own right, the decision on the part of PMC to invest in SXSW represents just one component of a larger expansion into the consumer events space, a departure from its trade event roots that aims to expand the PMC footprint and unlock a new strata of commercial opportunities. In February, the company acquired an ownership stake in the Las Vegas-based music, culture and arts soirée Life Is Beautiful Festival. And in December, PMC plans to launch the LA3C Festival in Los Angeles, a three-day celebration of cuisine, entertainment and visual arts. PMC recently acquired an ownership stake in the Las Vegas-based Life Is Beautiful Festival. This growing stable of experiential brands provides PMC with a host of compounding benefits, from boosting its sponsorship appeal to generating exclusive content for its editorial titles, said Steven Bloom, managing director of enterprise partnerships at Omnicom Media Group. But even for an organization with a preexisting events infrastructure, the sheer scale and novelty of SXSW––let alone the ongoing uncertainty of the pandemic––could challenge the PMC team, said Eric Fleming, co-founder of the experiential design agency Makeout. “Forecasting, especially for resources or staffing, means walking a fine line right now,” Fleming said. “You need to have talented, capable people on your staff while also remaining nimble and financially sound along the way. At any moment, another variable could come along and throw everything for a loop.” Penske comes to Austin SXSW, a sprawling extravaganza whose blend of scrolling, schmoozing and shoegazing can test the mettle of even the most inveterate conferencegoer, has always toed the line between work and pleasure. PMC, with its editorial mix of trade publications and cultural arbiters, has range enough to match the melange of South by Southwest, and it plans to put that on display. The centerpiece of its slate of new offerings, The Stage music festival hosted by Billboard and presented by Samsung Galaxy, will feature headline talent like Gunna, Young Thug, Kygo, Shawn Mendes and Sebastián Yatra. Beginning March 17, roughly 5,000 attendees will fill the newly opened Moody Amphitheater at Waterloo Park, with the activation being the first Billboard has ever orchestrated at the Austin festival. “These are artists that normally perform in arenas and stadiums, so fans are going to get an intimate experience that they never could get otherwise,” said Billboard president Julian Holguin. “This is our first time there, and we really want to have the biggest share of the conversation happening at South by Southwest Music.” PMC plans to launch the LA3C Festival in Los Angeles, a three-day celebration of cuisine, entertainment and visual arts. Sportico, a title launched by PMC in June 2020, will make its first trip to SXSW to host the inaugural Sports Summit on March 13-14. Presented by the NFT platform Sorare, the summit will feature a mix of speakers with backgrounds in professional athletics, cryptocurrency and sports gambling discussing the future of the global sports industry. For Rolling Stone, which named Gus Wenner its chief executive in January, the festival will serve as a launchpad for a multi-festival collaboration with Meta, part of a larger initiative to revitalize its youth reach. In Austin, the publisher and the platform will host two days of creator-centric panels and showcases, revolving around new products from Meta including Reels, Meta Quest 2 and Ray-Ban Stories starting on March 18. It will also supplement the partnership with two nights of livestreamed music showcases on its growing Twitch channel. Finally, the music publisher Vibe, which focuses on hip-hop and Black culture, will host Vibe Next on March 16, a musical showcase whose title alludes to a long-running column that Vibe journalists use to spotlight rising rap and R&B artists. Vibe Next will pay homage to the 30-year-old vertical by featuring a host of up-and-coming talent. A marriage of mutual benefit The union between PMC and SXSW runs deeper than the on-site activations, as the two complement each other on an organizational level, Connelly said. A new initiative, called South by Southwest Iconic Moments, encapsulates the symbiosis. In October, in collaboration with the University of Texas at Austin, PMC began an archival project to digitize and chronicle the most influential events in the history of the festival. The platform will launch following the event's conclusion on March 20. PMC Publishers' SXSW Activations Billboard Title: The Stage What: A three-night music festival featuring headline musicians like Gunna, Kygo and Shawn Mendes When: March 17-19 Sportico Title: Sports Summit by Sportico What: A two-day panel exploring the future of the global sports business featuring speakers from cryptocurrency and sports gambling organizations When: March 13-14 Rolling Stone Title: RS x Meta Creators House What: Two days of panels and artist showcases highlighting Meta products, including Reels, Meta Quest 2 and Ray-Ban Stories When: March 18-19 Vibe Title: Vibe Next What: A musical showcase featuring up-and-coming hip-hop and R&B performers When: March 16 Deadline Title: Deadline Studio What: An on-site photography and interview studio When: March 11-14 Variety Title: Variety Studio What: An on-site photography and interview studio When: March 11-14 The concept stemmed from the fact that, despite its reputation as a festival of firsts––Twitter launched on an Austin street corner in 2007, for instance––the ephemeral moments that made SXSW special often went undocumented, reducing them to little more than folklore. In recent years, speakers including Barack Obama, Stacey Abrams and Elon Musk have addressed audiences at SXSW, but without a robust editorial platform, the footage effectively disappears, Connelly said. By resurrecting old footage and more fastidiously preserving new material, SXSW will remain relevant long after the cameras leave, boosting the import of both the festival and its new ownership group. “Some of the biggest names in the world are breaking news and saying provocative things, but only the people in the room got to hear it,” Connelly said. “As a result, South by Southwest was not getting credit for its firsts, but we are going to help change that.” The Penske footprint grows While SXSW marks the first serious foray on the part of PMC into consumer events, its stake in the Life Is Beautiful Festival and launch of LA3C reflect its broader vision for experiential. The events, though slightly different in focus, largely cater to a similar type of arts-oriented consumer and advertiser. Given the overlap, PMC can template the structure of its events and replicate them in other cities across the globe. Plus, in addition to ticket revenue, events offer PMC a variety of new touchpoints for brand sponsorships, allowing the company to work with a wider breadth and more meaningful depth of clients, according to Bloom. The holding company already has an internal team that handles operations, sales and marketing, meaning PMC can increase the volume and number of its brand deals while expenses remain relatively fixed. “Having a variety of experiential offerings allows brands to pick and choose, whether they want to go focused or play across several different events,” Bloom said. “You also know that PMC has a formula. When you have multiple events like this, a certain level of proficiency comes built in.” Rolling Stone Names Gus Wenner CEO as the Legacy Title Expands Its Focus