SFX ENTERTAINMENT (SFXE)

STOCK RECOMMENDATION
By: Felix Alvarez
For: Nittany Investment Club (NIC)
November 6th, 2014

TOMORROWLAND FESTIVAL 2005

Attendance = Approximately
2,000
2

TOMORROWLAND FESTIVAL 2013

13 million viewers on
official Youtube
channel

Attendance=
Approximately 400,000

SFX ENTERTAINMENT IS A STRONG LONG TERM

INVESTMENT OPPORTUNITY FOR THE NIC

SFX Entertainment has significant growth

potential at a low cost.
SFX Entertainment is the only company of
its kind.
SFX Entertainment already has a
successful history in the market.

THE EDM INDUSTRY IS GROWING AS A WHOLE

Average Number of Listeners and Concert Attendees
350,000
190%
300,000
Increase
250,000
200,000

Hip Hop
EDM

Amount (Listeners) 150,000

79%
Decrease

100,000
50,000
0
2011

2012

2013

2014

Time (Years)
Source: Massive Enterprises Industry Report 2014, pulled, November 3 rd,2014.

THE EMERGENCE OF THE INDIAN MARKET

Source: IMS (International Music Summit) Business Report 2014, pulled November 3rd, 2014

GOOGLE POPULARITY INDEX

Source: Google research department publication Popular Music Charts pulled November 3 rd, 2014

STOCK PRICE IS DROPPING DUE TO

ACQUISITIONS
$313 million
payment to acquire
75% of Paylogic
Acquisition of
Listn mobile App

Source: Yahoo Finance, pulled on November 3rd, 2014 and Techvibes Magazine, published on October 21,2014

SFX ENTERTAINMENT IS A STRONG LONG TERM

INVESTMENT OPPORTUNITY FOR THE NIC

SFX Entertainment has significant growth

potential at a low cost.
SFX Entertainment is the only company of
its kind.
SFX Entertainment already has a
successful history in the market.

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COMPETITIVE LANDSCAPE

Multi-media
conglomerate with
capital of $2.2 billion
and international
subsidiaries.

Currently controls the

Las Vegas and Los
Angeles markets.

Only competes with

Beatport in online
music sales.

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Electronic dance music has existed in American

nightclubs for 30 years now, but its expansion into
the popular consciousness came so swiftly that
large-scale business interests -- from record labels
to event planners and merchandisers -- have been
caught playing catch-up.
- Kia Makarechi (Huffington Post)

Source: Huffington Post 'Wall Street Has Found Our Hiding Place published 04/06/2013 retrieved November 3rd,,2014
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I have been approached by all the big boys (companies)

you can imagine. Ive been working in this (EDM Events)
for 20 years and nobody cared. Now its so massive that
everybody wants a piece of it.
- Gary Richards (New York Times)

Source: New York Times Electronic Dance Concerts Turn Up Volume, Tempting Investors published 04/04/2012 retrieved November 3rd, 2014.

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THE INDUSTRY IS AWARE OF SFX

ENTERTAINMENTS SINGULARITY

Source: IMS (International Music Summit) Business Report 2014, pulled November 3 rd, 2014

14

SFX ENTERTAINMENT IS A STRONG LONG TERM

INVESTMENT OPPORTUNITY FOR THE NIC

SFX Entertainment has significant growth

potential at a low cost.
SFX Entertainment is the only company of
its kind.
SFX Entertainment already has a
successful history in the market.

15

SFX ENTERTAINMENT MARKET EXPERIENCE

1991
First SFX
Entertainment is
formed as regional
concert promoter
2000
SFX is sold to Clear
Channel
Communications for
$4.4 billion
2009
Merger with
Ticketmaster to make
largest concert
promoter in the world
Source: CNN Money Clear Channel buys SFX retrieved November 3rd, 2014

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ROBERT F. X. SILLERMAN (CEO)

If we do this right guys, the new SFX Entertainment could be even

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bigger than the first one.

SFX ENTERTAINMENT IS A STRONG LONG TERM

INVESTMENT OPPORTUNITY FOR THE NIC

SFX Entertainment has significant growth

potential at a low cost.
SFX Entertainment is the only company of
its kind.
SFX Entertainment already has a
successful history in the market.

18

QUESTIONS

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BACKUP SLIDES

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SHORT TERM PROFIT CONCERNS

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LEGAL LIABILITY & ACCOUNTING CONCERNS

Drug use and other illegal activity have become synonymous with many of the events
SFX organizes which could lead to shut downs or criminal investigations.

One of the largest events Electric Zoo had to be cancelled in 2013 due to a surge of
deaths and overdoses reported from the venue.

Acquired companies Sala Corp. and NRW, Inc. have filed a lawsuit for breach of joint
venture agreements and breach of duty of care.

SFX Entertainments 2013 10-K was initially criticized for using non-GAAP adjustments
when reporting expenses incurred for smaller scale shows. After further review it has
been determined that these adjustments more accurately reflect the financial outflows of
the corporation thus being dismissed from further investigation.

On February 5, 2014, Paolo Moreno, Lawrence Vavra and Gabriel Moreno filed suit
against SFX, and, in their individual capacities, Mr. Sillerman and Mr. Finkel, in the United
Sates District Court for the Central District of California. The complaint alleged, among
other things, causes of action for breach of joint venture/partnership agreement and
breach of implied joint venture/partnership agreement.

Source: All information above was disclosed in 2014 10-K filings

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