Kygo Venture Fund Palm Tree Crew invests in medium rare

Medium Rare, the live events and management company behind franchises like Travis Kelce’s Kelce Jam and Shaquille O’Neal’s Fun House carnival festival, has received an investment from Palm Tree Crew that values ​​the company at $50 million.

Financial details about the size of the investment have not been disclosed. Palm Tree Crew is an events, artist management and holding company that invests in businesses that complement its core businesses, including the Palm Tree Music Festival. Medium Rare started in 2019 after being founded by Live Nation alumni Joe Silberzweig and Adam Richman. Palm Tree is run by Norwegian DJ and producer Kygo and Myles Shear, Kygo’s long-time manager and business partner.

Medium Rare’s focus is on producing celebrity-driven events that drive ticket sales and major sponsorships. Medium Rare’s goal is to host high-profile events that deliver 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 that the model was quite broken,” Richman said Variety. “Most people don’t realize that most music festivals actually lose money. They really have a very high risk and low margin. But we had some kind of epiphany that we had to turn the model on its head. We were able to do that by partnering with a mega-celebrity like Shaquille O’Neal and building an event around his IP and his name, image and likeness.”

The most recent Shaq’s Fun House event took place in Las Vegas to coincide with the Super Bowl in early February. The sponsor response was unusually quick, Richman said. This year, Medium Rare produced a total of four events surrounding the Super Bowl in Las Vegas, all of which took place within 36 hours. Other Medium Rare events included Guy Fieri’s Flavortown Tailgate, Rob Gronkowski’s Gronk Beach and Dave Portnoy’s One Bite Pizza Festival.

“When they heard Shaquille O’Neal was doing an event around the Super Bowl [major advertisers] quickly said, “How big is the check you need?” Where do we send it?,” Richman claimed. “Most of our events are profitable before we release them to the general public because we do so well in sponsorship.”

The live event model also opens the door for celebrities to work with brands in a different way than traditional advertising and at different price points, Silberzweig noted.

“Partners don’t have to spend $5 million to participate. Normally it costs millions to advertise with Shaquille O’Neal, but here it’s a way for brands to have a smaller relationship,” Silberzweig said. “We can create an activation around the Super Bowl or the NFL Draft, leverage the celebrity and get social and brand content behind it.”

Medium Rare and Palm Tree Crew reflect a wave of next-generation production companies that combine 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 group Dude Perfect received a $100 million investment from Highmount Capital to build a family-friendly destination site in Frisco, Texas.

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 attended 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 enable Medium Rare to expand and pursue more ambitious projects.

“What [Shear] has built with the Palm Tree ecosystem will enable us to grow even faster and faster,” said Richman.

The Medium Rare partners previously sold a 20% stake in the company to Authentic Brands Group, which also does business with O’Neal. “We are looking at some M&A opportunities and bringing some [events] which we think our magic would do much better. But most of all it was about working with Myles and the ecosystems he built,” said Richman. (Palm Tree Crew’s mission, according to its website, is “to build a next-generation platform at the intersection of live entertainment, tropical lifestyle and flexible capital solutions.”)

Shear emphasized that he was impressed by Medium Rare’s growth rate and the skills its founders bring to the table. Silberzweig and Richman were recognized Variety‘s 2021 list of Hollywood’s best new leaders to watch.

“These guys have built such an incredible company. They work so hard, which is inspiring and for me,” Shear said Variety. “It’s really too early for this company. We view it as an early-stage investment in something that will only continue to grow and grow.”

Medium Rare and Palm Tree Crew plan to work together to develop future events and business opportunities. Palm Tree Crew’s signature festival was held in eight cities last year, including Aspen, Colorado, Westhampton, NY, Dana Point, California and Sydney, Australia. Palm Tree Crew also produces events that coincide with larger activities such as Miami’s Art Basel, Formula 1 races, the Super Bowl and the annual Coachella music and arts festival outside Los Angeles.

“We have had many offers from other potential investors over the years. The only call we ever picked up was from Palm Tree and Myles because we knew the strategic value there compared to a lot of other people calling,” Richman said.