Going through a restructuring process is never an easy thing for a business, especially one as large and important as Beatport. The behemoth online retailer’s parent company, SFX, is currently going private after its stock plummeted; CEO and chairman Robert Sillerman is in the process of buying remaining stocks.
In the meantime, Beatport has frozen payments to its right-holders as funds are reallocated during the restructuring. In an email that was sent out and subsequently shared around social media, Beatport stated:
Since inception over 10 years ago Beatport has paid almost $200,000,000 to its label partners. Beatport’s parent company, SFX, is currently involved in a ‘going private’ process that has trapped certain earned label payments. This process will be coming to an end in the next few weeks, at which time all payments will be able to be made. Beatport prides itself on being the broadest and original friend of the makers of electronic music and will clear this one time obstacle very shortly. In the meantime, feel free to contact your label manager with any questions. Thank you for your patience and continued support.
Resident Advisor notes, “some label owners, such as Morgan Geist, published the email on Facebook. ‘Couldn’t seem to find the word ‘Sorry’ in this email,’ he wrote.”
The restructuring is set to take place in the fourth quarter of this year. There is no word yet on when it will be completed or when users will receive their payments.
At the same time, Sillerman is under pressure from his board to provide proof that he could actually provide the funds required to buy back the company at $5.25 per share; the company is currently trading at $3.05 per share. SFX Entertainment (NASDAQ:SFXE) announced today that it had given notice to Sillerman that he had until 10:00 a.m. on August 13 to show that he has the ability to take the company private.
If he cannot provide sufficient proof, parts of the company might need to be sold off piecemeal. “The company admitted earlier this week that it had sought other offers, but only found buyers interested in specific parts of the company which include Beatport and EDM festivals Tomorrowland, TomorrowWorld and Electric Zoo.”
Source: Resident Advisor | Decoded
