Within ten short years, John Gore’s Key Brand Entertainment (KBE) has experienced exponential growth in both the size of its organization and its reach in the Broadway and West End entertainment community. According to Gore’s biography, the upstart entertainment investment company was founded in 1995 and has seen most of its stateside growth since 2004. Gore grew up in London, where he attended the prestigious Harrow School followed by London University with a degree in film and theatre. He began his career as a British producer, and morphed his organization into a full-service Broadway organization that develops, produces, distributes, and markets Broadway theatre, not just on Broadway but worldwide. To fuel its growth, KBE received significant private funding, and its most recent acquisition tear on Broadway has lasted seven years under the leadership of its current president and CEO, John Gore. Its biggest Broadway acquisitions to date have included Broadway Across America, Broadway.com, Group Sales Box Office, BroadwayBox.com, and the Broadway Classroom. In 2015, they also added The Broadway Channel to their list of acquisitions.
2015 “The Broadway Channel” Acquisition
In March 2015, Key Brand acquired the Broadway property The Broadway Channel, a media company that produces and distributes television programming, most commonly found on the default TV channel in NYC hotels. In fact, The Broadway Channel may well be one of the first things that visitors to New York City see when they arrive, as the channel airs 24 hours a day in 90+ New York City hotels and reaches over 1.5 million guests monthly. The channel promotes Broadway shows with reviews and insights tailored specifically to the NYC visitor. According to sources, with Key Brand’s financial investment and industry contacts in its corner, The Broadway Channel intends to double its hotel exposure and viewership.
Key-Brand Acquisition Frenzy Began in 2008
Corporate Acquisition Timeline
In January 2008, Key Brand began its most recent growth spurt with its first major corporate acquisition, Broadway Across America. This company came pre-packaged with theatrical productions and distribution network, which included the theatrical entities of its predecessors Clear Channel Entertainment, SFX and Pace Theatrical Group, both small but critical parts of John Gore’s strategic vision for the new KBE.
In December of 2010, Key Brand then acquired Theater Direct N.Y. Inc. from Hollywood Media Corp. This organization is made up of content-driven theatrical websites: Broadway.com, Theater.com, Theatre.com and Theatre.co.uk. Broadway.com’s focus is Broadway news, but it is also often regarded as an after-market ticket broker that also publishes some great Broadway news stories, providing it with some market legitimacy. The other websites are significantly smaller and hold less influence on the West End or Broadway theatre markets.
In May 2012, Key Brand approached Group Sales Box Office and negotiated a swift acquisition, when no one else was watching. Although not necessarily the ultimate intention, this shrewd move puts KBE in a strong position to compete with the Shuberts’ control of the Broadway business. Key Brand snapped up GSBO, despite already having its own group ticket business. The merger of those two businesses now makes the new-and-improved KBE division of GSBO the largest group ticket sales company operating in NYC. GSBO had been a stand-alone, family owned and operated entity since 1960 and most recently lived on the web at bestofbroadway.com The company was helmed by Stephanie Lee (who still retains partial ownership and the role and title of President of that division under KBE), but now has a thick reporting-line direct to the KBE management team. The GSBO service is widely used by groups to purchase group Broadway tickets and is especially popular with educational organizations and the tour and travel industry.
In December 2012, Key Brand purchased BroadwayBox.com, a website for discount theatre tickets in New York City, from its founders, Dan and Odeda Geisler for an unconfirmed $1.5 million [NOTE: As KBE is a private company financial statements are not made public. KBE has claimed that this number is not correct, but could not identify by how much)
In March 2015, Key Brand’s most recent acquisition was The Broadway Channel, a media company that produces and distributes television programming geared at the Broadway theatre market.
2012 Group Sales Box Office GSBO Acquisition
In operation for over 50 Years, Group Sales Box Office enjoyed independent business success for many decades. This acquisition marks the end of an era in the Broadway business landscape with the slew of other recent mergers and acquisitions. Group Sales Box Office was a family owned and operated company for over 50 years, specializing in booking group tickets to Broadway shows. Over the years, the company became a one-stop-shop for groups, providing personal service in arranging group trips to Broadway shows long before the internet was born. Originally operating out of a one-room office in midtown in 1960, the company grew the old-fashioned way, through a process of organic re-generation. Over the last ten years, Group Sales Box Office had some management challenges and the group lacked growth, but was able to continue operation on its stellar reputation and well-established laurels, when it was finally acquired by KBE in 2012 (Albeit with Stephanie Lee retaining some ownership in the division and continuing to act as president). Over the years, Group Sales Box Office cemented its reputation with both show producers and ticket buyers as a company that would deliver on its ticket promises. Its integrity in the industry was, and continues to be, second-to-none. The company had the distinction of rubbing shoulders back-in-the-day with many other (now defunct) Broadway ticketing power houses like Hit Show Club and Joe LeBlang’s Ticket Service. This marks the end of the Group Sales Box Office era as we know it, as it now moves forward as part of the KBE family and will mark a new chapter combining the old-school model of Broadway ticketing with innovative sales technology and techniques. The synergies with other divisions of the KBE family coupled with John Gore’s financial backing should allow this division to flourish.
It is not clear how KBE intends to integrate the various divisions that it now possesses. What is clear is that KBE management believes integration has already occurred, but the various divisions are still run somewhat independently, which indicates that many parts of the sales, marketing and common services have not yet seen the true value of the economies of scale after a merger. Although each division is still run semi-autonomously, this strategy could change at any time.
Business Integration Challenges
Business analysts are often quick to remind us that there are only two ways to grow a business. One is the slow and organic growth method. The other is through corporate acquisition. The first route is littered with many challenges that include cash-flow issues and challenges from competitors, but the latter faces integration challenges. It is this problem that companies like KBE may face with so many acquisitions in such a short time; folding these disparate businesses into one cohesive unit is the challenge that all business management faces.
After each corporate acquisition, Key Brand wastes no time integrating the employees of the newly acquired division into the KBE Headquarters in New York City’s Midtown. KBE has two offices, one located at the historic Brill Building (1619 Broadway) and across the street at 729 7th Ave. In one acquisition, Group Sales Box Office, had twenty employees, and most employees were moved directly into the KBE family and were relocated into their new offices at Key Brand within six months of the acquisition. Each company in the group still exists on its own, as its own brand, with its own business plan, customer to client.
Coverage Across Multiple Broadway Business Sectors
John Gore’s Key Brand Entertainment now has coverage in most Broadway business sectors, with many of the divisions overlapping each other in terms of content, distribution and coverage. KBE expects each division to leverage the synergies they now share with the other divisions within the KBE group. As far as each division is concerned, Broadway Across America is expected to continue with its primary mission for touring shows, albeit now with a two-way street for information between the other KBE divisions to improve show content and ticket sales. In the short-term, Broadway.com is anticipated to continue its Broadway news and red carpet coverage and bring after-market ticket broker sales to the other KBE divisions. broadwaybox.com is expected to continue to provide discounts for shows that want to discount and ticket broker tickets for those that do not. Group Sales Box Office is expected to continue to sell group tickets as it has always done. Broadway Channel and Broadway.com will explore and pioneer content on the emerging digital platforms to offer productions new mediums to reach audiences.
What is lacking is a strategy, or intention, to dissolve these assets into a single cohesive brand, that Broadway audiences have long been clamoring for. With a disparate array of Broadway websites and ticket solutions already out there, audiences crave a single entity where they can get Broadway show information, full price, premium, discount, group, employees-only, ticket broker and a consumer-to-consumer marketplace that delivers all types of Broadway show tickets all in one place. It remains to be seen if the KBE group will take the chance on cannibalizing some of their divisions for the greater good of the group, but such a radical move may ultimately be the formula for long-term success. It is unclear if the sum of the parts is greater than the value of the whole, but KBE may already know the answer to that question, as they possess many of the parts of that financial puzzle. Such a radical plan does not fit with Broadway’s often-slow adoption of new ideas, but Gore’s KBE may be quite a different animal.
Key Brand’s Next Moves
It’s no secret that John Gore’s KBE is still hungry for growth – and not the slow, organic kind either. One Broadway business sector that KBE has yet to garner is the corporate employee ticket market that is currently dominated by Shubert’s Plum Benefits and CorporateOffers.com. Other players in the corporate employee market include Working Advantage and Goldstar, but their Broadway show exposure is significantly smaller, and they might prove difficult to scale to the size that KBE needs to satisfy its acquisition frenzy.
To gain industry leverage, Key Brand could also consider buying businesses outside its purview of the Broadway ticket industry. Advertising agencies like Spotco or Situation Interactive or a Broadway PR firm like Boneau/Bryan-Brown would be a natural fit that could dictate terms to the rest of the market. Key Brand denies any such intention, but business strategy can often change on a dime.
Gore might also consider buying some Broadway theatres to get into the Shubert/Nederlander/Jujamcyn club. Although no theatres are currently up-for-sale, given enough money, the Times Square Church (the former Mark Hellinger Theatre) would happily sell and move to Newark, New Jersey to continue its altruistic mission to reach the poor and homeless.
As KBE is a privately held business, details of their sales revenue, profits, financing and available investment dollars are a closely guarded secret, but we expect to see at least another acquisition from them in the short term, and a few more in the long term, perhaps indicating a ten year plan of growth for KBE. Gore is no slouch at business, so expect him to pull another rabbit out of the hat when his corporate acquisitions are complete, which could mean a possible IPO for the KBE Empire as soon as 2018.
The next five years are critical for John Gore’s KBE, during which the business may become a force to be reckoned with: a Broadway powerhouse that covers all the business sectors. Other Broadway companies may have no choice but to deal with them at all levels. On the flip side, the behemoth KBE could prove a disaster if it lacks a solid corporate strategic vision and fails at the divisional level. But so far, John Gore’s Key Brand Entertainment Group is delivering on expectations with Gore and his team breaking new ground with the integration of their family of companies. Due to its deep pockets and value-investing strategy, KBE intends to keep all of its acquired components; there is no intention of selling any of the most profitable elements to raise capital to develop or purchase others. It will be interesting to see how the next five years fare for Broadway and Key Brand Entertainment in North America.
Nautically speaking, the Key Brand fleet may have have set sail with fresh crews and the wind in their sails, but it is unclear if they have enough rations for the unchartered voyage and if Admiral Gore has a clear vision of their ultimate destination.
Editorial Disclosure: Care was taken to ensure that this article was written from an unbiased viewpoint and a neutral perspective. It should be noted that New York Show Tickets is a potential competitor of broadwaybox.com. Additionally, CorporateOffers.com is a wholly owned subsidiary of New York Show Tickets Inc.