Penske takes 50% stake in Austin's South by Southwest festival

Jay Penske has added another asset to his growing media empire: the South by Southwest festival.

A joint venture between Penske Media and MRC — which owns Billboard, the Hollywood Reporter, Rolling Stone, Variety and Vibe — acquired a 50% stake in the technology and Hollywood festival, the companies said Monday. Financial terms were not disclosed.

The Wall Street Journal first reported the sale.

The investment will expand Austin-based SXSW's potential for new business lines.

The deal comes after organizers and filmmakers were left scrambling last year as they were forced to cancel the event just a week before opening due to the pandemic. Southby, as it has become known, has become a key stop on the festival circuit for Hollywood and is often where many big summer films are premiered.

“It has been an incredibly tough period for small businesses, SXSW included,” Chief Executive Roland Swenson, the festival's co-founder, said in a statement. “When Jay Penske approached us with an interest in becoming a partner, it was a true lifeline for us."

This year, the festival went virtual in March, with 75 feature films, down from more than 130 the previous year. Under the terms of the new deal, SXSW’s management team and core business will remain unchanged in keeping its focus on the March 2022 event, the companies said.

The South by Southwest program includes music, technology and a conference. In 2019, it was attended by more than 417,000 people in Austin, Texas, including 73,000 for the film festival.

"Since 1987, SXSW has been the world's premier festival centered at the convergence of tech, media, film, and music," Penske said in a statement. "As part of this significant investment, we plan to build upon SXSW’s incredible foundation while extending the platform further digitally and assisting Roland and his incredible team to bring their vision to even greater heights."

Last fall, Penske Media Corp. joined forces with MRC — producer of film and TV including the Netflix drama “Ozark”— to bring together entertainment magazines including Variety and the Hollywood Reporter, as well as to create a new partnership for film and television content. The two L.A.-based companies have joined forces as many publications face a slowdown in advertising spending in the wake of the COVID-19 pandemic.

This story originally appeared in Los Angeles Times.