Penske Media Corp., the publisher of magazines such as Rolling Stone, Billboard and Variety, has agreed to acquire a 50% stake in South by Southwest, the famous technology, music and film festival, people familiar with the matter said.
The Texas Festival, one of the largest and most well-known in the US, suffered a serious financial blow last March after it was canceled at the last minute by city officials in Austin due to the outbreak of the coronavirus pandemic.
Organizers at the time said their insurance policies did not cover cancellation due to a pandemic. They believed the cancellation would cost them millions, which would raise questions about the future of the festival, also known as SXSW or simply ‘Southby’. Last year, SXSW laid off a third of its 175 annual employees.
This year, organizers have only offered an abridged virtual event, but said they plan to bring the event back in person in 2022.
Penske will make a strategic investment in the meticulous company, SXSW LLC, in exchange for a 50% stake in the business, the people said. The event was owned by the founders who founded the festival in 1987. They will continue to run and operate the festival, although Penske will have the greatest interest, the people said.