SFX Entertainment Files For Chapter 11 Bankruptcy, Beatport To Carry On
We’ve all watched carefully as SFX Entertainment, founded by Robert Sillerman, has consolidated a large part of the electronic music events market under one conglomerate. The company hasn’t been able to solve some serious financial woes, and as reported in the Wall Street Journal early Monday morning, is filing for Chapter 11 Bankruptcy protection. What does this mean for DJs who use Beatport, one of SFX Entertainment’s major holdings? Keep reading for details.
What Does SFX Entertainment’s Bankruptcy Mean For Beatport
First, let’s get the big fears out of the way. Just because the SFX Entertainment conglomerate is filing for bankruptcy protection doesn’t mean that Beatport is shutting down today, or even ever. Beatport sent out a notice this morning to clarify that things would be business as usual:
For all of us here at Beatport, it’s just business as usual. That means entire Beatport platform is fully operational without restriction. The store remains open. The streaming service continues uninterrupted. New releases are being added every day. New videos are being scheduled and filmed. Payments to labels and suppliers are ongoing in their usual manner.
We look forward to SFX successfully navigating this reorganization, and in the meantime will continue focusing on building the best music experience for the fans, artists, and DJs that make up the electronic music community.
Interestingly, a lot of the speculation about SFX’s financial position last year seemed to think that Beatport would potentially be one of the first things to be sold off – potentially to another music-focused company like Spotify. But
What’s Next For SFX Entertainment
As SFXE stock plunges into the infinitesimal (it closed at 6.9¢ a share, down from a 52 week high of $5.25 and an initial IPO price of over $10), everyone wants to know what will become of the company. Part of today’s Chapter 11 announcement is that the SFX conglomerate is going to restructure it’s $300 million worth of debt to free up capital, and turn the company private.
The other good news is that events, artists, royalties, etc will all continue to be paid, as Reuters notes:
The company’s bondholders also agreed to loan SFX up to $115 million to provide capital and to pay performers, production crews and royalties for its streaming service Beatport.
SFX, which began operations in 2012, said it would continue to produce days-long festivals and events, including TomorrowWorld and Electric Zoo. SFX completed an initial public offering of its stock in 2013, raising $260 million.
For now, there’s a lot of restructuring that the company will need to do, and it’s sure to be a messy road to financial solvency for SFX. Here’s to hoping that this doesn’t effect the dance music world in too big of a way – but only time will tell.