After 27 years of operating Webster Hall, the Ballinger family is selling the 131-year-old Manhattan concert hall to AEG Presents and Brooklyn Sports and Entertainment. The two firms will assume operating rights, assets and the long-term lease from building owner Unity Gallega while Bowery Presents will take over booking and talent buying.

BSE CEO Brett Yormark tells Billboard he was first approached about a Webster Hall acquisition by Mark Patricof, a managing director at investment bank Houlihan Lokey. Patricof introduced Yormark to Webster Hall’s principal owner Lon Ballinger, and eventually, AEG joined the discussions and agreed to partner 50-50 on the transaction.

“While we were having those discussions, AEG finalized the acquisition of Bowery Presents, which used to book Webster Hall,” Yormark says. Up until March 2014, Bowery had an exclusive at the venue, and Yormark said that the new agreement means the Bowery team will once more be charged with programming and marketing Webster Hall.

“We’re going to partner on all facets of the business, but obviously let those that know it best lead the way,” Yormark said.

The deal comes as AEG Presents is looking to expand its presence in New York, chairman Jay Marciano tells Billboard, explaining “you’ll spend more time trying to make money in a lesser market than you will in a great market. Los Angeles, New York and London are all great markets and it's our view that you can’t have enough venues, because, in those cities, each venue stands on its own, each venue is profitable and each service a different segment of the market.”

AEG has seen a rapid expansion in New York — in January, AEG Presents announced it had acquired a 50-percent stake in Bowery, bringing principal partners Jim Glancy and John Moore over to AEG and venues like Manhattan’s 3,000-capacity Terminal 5 and the 550-capacity Music Hall of Williamsburg under the AEG umbrella. AEG and BSE plan to spend about $10 million renovating Webster Hall’s Grand Ballroom, The Studio and The Marlin Room spaces “to bring them up to contemporary standards and add a few more customer features,” Marciano says.

“You can’t replace a venue of its size and stature anywhere on the island of Manhattan, and we jumped at the chance to bring Webster Hall into our growing venue portfolio,” Marciano explains. First built in 1886 by architect Charles Rentz, the venue served as a social hall for the Lower East Side’s working-class and immigrant population throughout the Great Depression before becoming an internationally-recognized music hall. It was purchased by RCA Records and operated as a recording studio and acoustically treated ballroom in the 1950s and '60s and then became a full-time concert venue known as The Ritz beginning in 1980. The Ballinger family took control of the venue in 1989.

Marciano said AEG had been looking for a venue in the 1,500-capacity range and realized "it would be cost prohibitive to try and build a venue like Webster Hall from scratch." He says, “Knowing what I know about New York real estate, I don't think you could build it for less than $100 million. Webster Hall is a landmark, historic building whose use as a public assembly venue dates back to the 1800s. It’s a venue that any promoter would want to have in their portfolio.”

AEG/Bowery Presents also books and markets the Mercury Lounge and Bowery Ballroom in Manhattan and is opening its newest venue, Brooklyn Steel, on Thursday with five nights of LCD Soundsystem. AEG Presents launched Panorama Festival on Randall’s Island in 2016 and offers some operating assistance to BSE’s two New York arenas — the Barclays Center and the newly renovated Nassau Coliseum.

Yormark hopes Webster Hall and other AEG/Bowery Presents facilities become feeder venues for rising artists who aspire to play big arena shows at Nassau Coliseum and Barclays Center.

"We're trying to diversify our venue portfolio so we can connect with artists early and often," he says. "We have a progression approach that allows us to get to know them and let them understand the experience they'll have when they play one of our venues."