Penske Media Corp., the publisher of such magazines as Rolling Stone, Billboard and Variety, has agreed to acquire a 50% stake in South by Southwest, the renowned technology, music and film festival, said people well known with the issue.
The Texas festival, one of the largest and best known in the US, took a severe financial blow last March after being canceled last minute by Austin city officials due to the outbreak of the coronavirus pandemic.
The organizers said at the time that their insurance policies did not cover cancellations due to a pandemic. They thought the cancellation would cost them millions, raising questions about the future of the festival, also known as SXSW or just ‘Southby’. Last spring, SXSW laid off a third of its 175 year-round employees.
This year, the organizers only hosted a shortened virtual event, but said they plan to bring the event back in person in 2022.
Penske will make a strategic investment in the closely-held company, SXSW LLC, in exchange for a 50% stake in the company, the people said. The event was owned by the founders who founded the festival in 1987. They will continue to manage and operate the festival, although Penske will have the largest stake, people said.