Satellite radio service SiriusXM paid $480 million Friday to buy a major stake in Oakland’s Pandora Media, which is also unloading event ticketing service Ticketfly for $200 million. The two deals could appease Pandora shareholders, who have been pressing the struggling Internet radio pioneer to…
Satellite radio service SiriusXM paid $480 million Friday to buy a major stake in Oakland’s Pandora Media, which is also unloading event ticketing service Ticketfly for $200 million.
The two deals could appease Pandora shareholders, who have been pressing the struggling Internet radio pioneer to find a buyer. SiriusXM, rumored for months as an outright buyer, instead becomes the largest single stakeholder with 19 percent.
The terms of the deal, which is expected to close by the end of the year, give SiriusXM three seats on Pandora’s nine-member board of directors, including the chairman.
The investment gives the company an entry into the online streaming radio business, a “space where SiriusXM does not play today, ” SiriusXM CEO Jim Meyer said in a statement.
Despite an overall rise in streaming music, Pandora has struggled to increase profit despite drawing about 76.7 million active listeners during the first quarter. The company reported a net loss of $132.3 million, on revenue (largely from advertising) of $316 million. This spring, Pandora launched a premium service to better compete with rivals like Spotify, Apple Music and Amazon Prime Music.
Pandora has been reviewing its sale options, especially with hedge fund investor Corvex Management pushing for changes. It agreed last month to a $150 million investment from an affiliate of private equity firm Kohlberg Kravis Roberts. With the SiriusXM deal, Pandora and KKR will terminate their agreement, with Pandora paying a $22.5 million breakup fee.
Pandora also agreed to sell Ticketfly to event organization company Eventbrite for about $250 million less than it paid to buy the ticket seller in October 2015.
Pandora has tied Ticketfly into concert promotions as listeners streamed particular artists. As part of the Ticketfly sale, which is expected to close by the end of September, Pandora said it expects to work out a separate agreement with Eventbrite on a broader ticket promotion program.
“This is a very significant juncture in Pandora’s journey, ” Pandora CEO and founder Tim Westergren said in a statement. “The investment from SiriusXM infuses resources to help Pandora continue to grow and innovate.”
