The COVID-19 pandemic financially devastated SXSW, the annual interactive, music, and film festival in Austin. Now, the festival has a financial savior.
After being forced to cancel the event last year and to hold it virtually this year, the Austin-based owner of SXSW has sold a 50 percent stake in the festival to a joint venture between Penske Media and MRC, the companies announced April 19. The joint venture publishes magazines such as Rolling Stone, Billboard, Variety, and The Hollywood Reporter. Financial terms of the deal weren’t disclosed.
The Wall Street Journal first reported the news April 18.
SXSW’s insurance failed to cover losses from last year’s pandemic-related shutdown. To ease monetary harm, SXSW laid off one-third of its 175-member, year-round workforce last spring.
The Journal points out that the festival’s founders had owned the 33-year-old festival outright. They’ll keep managing the festival and maintain a share of ownership, but Penske will hold the largest stake.
SXSW co-founder and CEO Roland Swenson says in a statement that the cash infusion from the Los Angeles-based joint venture represents “a true lifeline for us.” Before the pandemic, the festival was pulling in about $100 million in annual revenue, according to the Journal.
SXSW plans to stage an in-person event next March.
“Since 1987, SXSW has been the world’s premier festival centered at the convergence of tech, media, film, and music. … As part of this significant investment, we plan to build upon SXSW’s incredible foundation while extending the platform further digitally and assisting Roland and his incredible team to bring their vision to even greater heights,” says Jay Penske, chairman and CEO of Penske Media.