SFX – the American company that owns dance music brands like Beatport, Tomorrowland and Stereosonic – has filed for bankruptcy.
After a year of financial struggle, the company has today filed for a Chapter 11 bankruptcy in the US, a move that will help them to wipe $300 million of debt and continue to operate as normal – at least for now. A deal struck with bondholders will convert part of that debt into equity in SFX, which has been taken off the stock market and will now be run as a privately-owned company.\
But SFX founder Robert Sillerman will step down as CEO of the company, remaining on-board instead as Chairman. “Of course this was not where we thought we’d be but with this restructuring we have the opportunity to achieve all that SFX can and will be. I’m looking forward to continuing to be part of the new SFX as Chairman,” he said. “We will immediately commence a search for a new CEO to lead us as we continue to set the trend in the exploding culture that is electronic music.”
In 2012, as “EDM” exploded in the US, SFX begun acquiring various brands and promoters as part of Sillerman’s $1 billion plan to conquer dance music. The company currently owns or holds a large stake in events like Tomorrowland and its troubled American offshoot TomorrowWorld, plus Mysteryland, Electric Zoo and Australia’s own Stereosonic, who have been contacted for comment.
Beatport, which was acquired by SFX in 2013, has assured that the bankruptcy won’t affect their operations. “For all of us here at Beatport, it’s just business as usual,” they said in a statement issued today. “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.”
SFX’s highly-publicised financial difficulties include defaulting on a USD$10.8 million loan last month and missing a $3 million interest payment in January. The company’s share price on the New York Stock Exchange fell from $927 million in December 2013 to just $9.5 million in January 2016.