Medium Rare, the live events and management company behind such franchises as Travis Kelce’s Kelce Jam and Shaquille O’Neal’s Fun House carnival-style festival, has received an investment from Palm Tree Crew that values the company at $50 million.
Financial details about the size of the investment were not disclosed. Palm Tree Crew is an event, artists management and holding company that invests in firms that complement its core activities, which include the Palm Tree Music Festival. Medium Rare began operations in 2019 after being founded by Live Nation alums Joe Silberzweig and Adam Richman. Palm Tree is run by Norwegian DJ and producer Kygo and Myles Shear, Kygo’s longtime manager and business partner.
Medium Rare’s focus is on producing celebrity-driven events that drive ticket sales and big sponsorship dollars. Medium Rare’s goal is to host eye-popping events that yield branded digital and social media content for sponsors and brand partners. Silberzweig and Richman joined forces to create Medium Rare after realizing the limitations of most music and lifestyle festivals, which rely largely on ticket sales for revenue.
“We saw the model was kind of broken,” Richman told Variety. “Most people don’t realize that most music festivals actually lose money. They’re really, really high risk and low margin. But we kind of had this epiphany that we needed to put the model on its head. We were able to do that by partnering with a mega celebrity like Shaquille O’Neal and buildiing an event around his IP and his name, image and likeness.”
The most recent Shaq’s Fun House event was staged in Las Vegas to coincide with the Super Bowl in earl February. The sponsor response was unusually swift, Richman said. This year, Medium Rare produced a total of four events around the Super Bowl in Las Vegas, all of which took place within 36 hours.
“When they heard that Shaquille O’Neal was doing an event around the Super Bowl [major advertisers] were quick to say ‘How big of a check do you need? Where do we send it?,” Richman asserted. “Most of our events are profitable before we even announce them to the general public because we do so well from the sponsorship side.”
The live event model also opens to the door for celebrities to work with brands in a different way than traditional advertising and at a range of price points, Silberzweig noted.
“Partners don’t need to shell out $5 million to get involved. Normally, if you want to do commercials with Shaquille O’Neal, it’s going to cost millions, but here it’s a way for brands to form a smaller relationship. We can create an activation around the Super Bowl or the NFL Draft, leverage the celebrity and get social and branded content behind it.”
Medium Rare and Palm Tree Crew reflect a wave of next-generation production companies that blend unusual live experiences, celebrities with built-in followings and a festival or event setting. Actor BJ Novak is a partner in Chain, which produces ChainFest, a culinary event built around top chefs preparing comfort food and guilty-pleasure dishes from fast food chain restaurants. Earlier this week, Texas-based comedy troupe Dude Perfect received a $100 million investment from Highmount Capital to build a family-friendly destination site in Frisco, Texas.
Palm Tree Crew partners Kygo and Myles Shear in Miami Beach in 2022
Getty Images for Carbone Beach
Shear emphasized that the deal between Palm Tree Crew and Medium Rare came together organically as the companies realized the similarities in their business focus. Kygo took part in a Super Bowl party that Medium Rare produced for Sports Illustrated around the 2022 Super Bowl in Los Angeles. The relationship grew from there. Palm Tree’s equity investment will allow Medium Rare to expand and pursue more ambitious projects.
“What [Shear] has built with the Palm Tree eco-system will allow us to grow even quicker and faster,” Richman said.
The Medium Rare partners previously sold a 20% stake in the company to Authentic Brands Group, which is also in business with O’Neal. “We’re looking at some M&A opportunities and bring some [events] that we think with our magic would be doing that much better. But more than anything was really about partnering with Myles and the eco-systems he’s built,” Richman said. (Palm Tree Crew’s mission, according to its website, is “building a next-generation platform at the nexus of live entertainment, tropical lifestyle and flexible capital solutions.”)
Shear reinforced that he was impressed by Medium Rare’s rate of growth and the skills that its founders bring to the table. Silberzweig and Richman were recognized on Variety‘s 2021 list of Hollywood’s top New Leaders to watch.
“These guys have built such an unbelievable business. They work so hard, which is inspiring and for me,” Shear told Variety. “It’s really early days for this business. We view it as an early-stage investment in something that’s just going to keep growing and growing.”
Medium Rare and Palm Tree Crew intend to partner to develop future events and business opportunities. Palm Tree Crew’s signature festival was held last year in eight cities including Aspen, Colo., Westhampton, N.Y., Dana Point, Calif. and Sydney, Australia. Palm Tree Crew also produces events that coincide with larger activities such Miami’s Art Basel, Formula 1 races, the Super Bowl and the annual Coachella music and arts festival outside Los Angeles.
“We’ve had a ton of offers over the years from other potential investors. The only call we ever picked up was Palm Tree and Myles because we knew the strategic value there compared to a lot of the other people that were calling,” Richman said.