LiveXLive to Acquire PodcastOne in $18 Million Stock Deal

Music livestreamer LiveXLive is diversifying its business with the acquisition of PodcastOne, a podcast network that hosts shows by Adam Carolla, “Stone Cold” Steve Austin, Shaquille O’Neal and others, in an all-stock deal valued at about $18 million.

Under the deal, LiveXLive — which to date has been a money-losing venture and last month received relief funding under the U.S.’s CARES Act — is acquiring Courtside Group, owner and operator of PodcastOne, in stock worth $18.1 million based on LiveXLive’s closing share price on May 7. The proposed acquisition is expected to close by June 2020, subject to certain closing conditions.

PodcastOne produces more than 350 ad-supported podcast episodes per week and generates over 2 billion downloads on an annual basis. Shows in its lineup include those from Adam Carolla, Shaquille O’Neal, A&E’s “Cold Case Files,” Steve Austin, Tip “T.I.” Harris, Dr. Drew Pinsky, Heather and Terry Dubrow, Chael Sonnen, Kaitlyn Bristowe, LadyGang, Mike Tyson, Rich Eisen, Spencer and Heidi Pratt, Autumn Calabrese, Demi Burnett, and Gals on the Go.

According to the companies, PodcastOne recorded gross revenue of $27.5 million in 2019. The two L.A.-based companies will consolidate their teams to bring total combined headcount to over 120 full-time employees.

LiveXLive plans to integrate PodcastOne into its music platform. According to Ellin, LiveXLive and PodcastOne together will have a “significant opportunity” to cross-sell and cross-promote across their respective audiences and advertisers, as well as “provide our collective artists and on-air talent with an expanded platform to increase their social media and online presence.”

LiveXLive, for its fiscal year ended March 31, said it expected revenue between $38 million-$40 million, adjusted operating loss between $12 million-$14 million. The company plans to report FY20 results in June. For the nine months ended Dec. 31, 2019, LiveXLive posted revenue of $28.8 million and a net loss of $30.4 million, per its unaudited statement. It ended the year with about $14 million in cash on hand.

In early April, the company’s senior management, including Ellin, agreed to a 50% salary cut and to forego any cash bonuses they have been eligible to receive. In addition, other LiveXLive employees will receive 10%-25% reductions in their monthly base salaries. The company “continues to evaluate its business and operations as they evolve in light of the Covid-19 uncertain environment,” LiveXLive said in an April 13 filing with the SEC.

Separately, on April 13, 2020, LiveXLive received a $2 million loan from MidFirst Bank, under the Paycheck Protection Program (PPP) of the federal government’s emergency CARES Act.

For its 2020 fiscal year, LiveXLive said it delivered livestreams for about 40 live festivals and concerts, including Rock in Rio, EDC Las Vegas, and the Montreux Jazz Festival. LiveXLive has already streamed performances by more than 775 artists to date in 2020 as compared with 300 artists in total for 2019.