Robert F. X. Sillerman, an entrepreneur who has founded companies worth over $6 billion to date, is at work again as CEO of Viggle Inc. (VGGL, Financial). With a personal net worth of approximately $1 billion, Sillerman was an early investor in American Idol, Elvis Presley's estate, Muhammad Ali Enterprises and is majority shareholder of some of the world's largest entertainment events including TomorrowLand, TomorrowWorld, Sensation, Stereosonic and Electric Zoo.
Beyond his $6 billion in career exits, two stock market events are worth noting for GuruFocus readers, who are presumably interested in how Sillerman has rewarded his public (not just private) shareholders. "Guru followers" might consider that Sillerman was responsible for a 9,000% rally of Sports Entertainment Enterprises in 2004 and a 30,000% rally of Gateway Industries in 2011. (Sillerman remains chairman at Gateway Industries, which is now SFX Entertainment Inc [SFXE].)
"Nothing like a 30,000% gain to brighten up your day," commented Forbes shortly after Gateway Industries had rallied from $0.01 to $2.97 per share on Tuesday, February 8, 2011. Yes, within one day, and with volume of approximately 2 million shares.
Sillerman made his early fortune selling TV and radio stations in the 1980s and '90s. He landed a $400 million buyout from Westinghouse in 1989. Next, he combined multiple concert promoters into a single company, which he sold to Clear Channel and which later morphed into Live Nation, a household name. In 2005, Forbes named Sillerman the 375th richest American, with a net worth of $975 million. During the past decade, Sillerman has made a fortune in the Electronic Dance Music ("EDM") revolution, quoting to the New York Times that his companies intended to spend up to $1 billion on EDM acquisitions like clubs, festivals, promoters, and service providers.
With Viggle Inc., Sillerman appears to be typing all of his experience and contacts into one technological solution. Billing itself as "one platform to connect media companies, marketers and consumers," Viggle rewards consumers for engaging with content, allows media companies to promote content like shows and music, and connects marketers to disparate venues of media consumption.
A recent example comes from a FOX News station:Â "Starting today we’re partnering with mobile app Viggle to offer you the chance to earn awesome rewards, huge prizes and to share your opinion with us during the news." Viggle has similar partnerships with many other media organizations, including Tribune and NBC Universal.
In this example, Viggle is connecting disparate audiences including news anchors, viewers, marketers, product manufacturers, event promoters, and even book authors. "The app allows viewers to check-in to shows while they are watching live. It uses audio cues to show they really are watching live and then the user begins to accumulate points immediately. The sooner you check in and the longer you watch the more points you earn. The more points you earn the sooner you can buy other TV shows, music, ebooks, audiobooks or qualify for awesome sweepstakes."
Viggle Inc. has been developing its flagship product since 2011, which it simply calls Viggle. It first launched its Viggle mobile app in 2012 and has subsequently expanded into multiple formats. Viggle engaged about 3.7 million users by 2013; 22.5 million by late 2014. The latest number from the company is 25.7 million, which it defines as its current "average monthly total reach." Since inception, Viggle users have redeemed $24.3 million in rewards for watching their favorite TV programs and listening to music.
Shortly after the close of trading on Thursday, May 21, 2015, Viggle Inc. proposed a public offering of common stock. Shares closed at $2.55 after three hours of post-market trading. Revenue for the most recent quarter increased 52% year over year.
