Penske Media Corp., the publisher of magazines such as Rolling Stone, Billboard and Variety, has agreed to buy a 50% stake in South by Southwest, the famous technology, music and film festival, said people familiar with the issue.
The Texas festival, one of the largest and best-known in the United States, received a severe financial blow in March last year, after it was canceled at the last minute by Austin officials due to the outbreak of the coronavirus pandemic.
Organizers said at the time that their insurance policies did not cover cancellation due to a pandemic. They believed that the cancellation would cost him millions, raising questions about the future of the festival, also known as SXSW or simply “Southby”. Last spring, SXSW laid off a third of its 175 employees throughout the year.
This year, the organizers organized only a shortened virtual event, but said they intend to bring back the personal event in 2022.
Penske will make a strategic investment in its close-knit company, SXSW LLC, in exchange for a 50% stake in the business, people said. The event was owned by its founders who created the festival in 1987. They will continue to manage and operate the festival, although Penske will hold the biggest stake, people said.