SFX Files for Bankruptcy Protecton; Sillerman Removed as CEO
UPDATE: According to a statement from Tomorrowland spokesperson Debby Wilmsen, given to Georgia Unfiltered, the future of Tomorrowland is safe; the same cannot be said about TomorrowWorld.
“Both the festival in Boom (Belgium) and the one in Itu (Sao Paulo, Brazil) will go ahead without any disruption due to the current situation. In light of the present situation, no concrete plans have yet been made for TomorrowWorld 2016.”
Read her full statement at the bottom.
Though we saw this day coming for most of 2015, the day is finally here. This morning, SFX Entertainment filed for Chapter 11 bankruptcy protection in an attempt to keep the company afloat. The deal in place is set to not only erase the $300 million debt, but to take the company private, a move owner Robert Sillerman tried and failed to do numerous times last year.
The debt restructuring will provide $115 million in bankruptcy financing so that SFX can continue normal operations, which includes festivals like Electric Zoo and the music marketplace Beatport (read Beatport’s official statement here). Most importantly, CEO Robert Sillerman has been outed and will be replaced by a new CEO at a later time; no one has been named as of yet. Chapter 11 is the last option for the entertainment conglomerate, which missed a $3 million interest payment a few weeks ago, resulting in bondholders declaring the company in default of their original $5.8 million balance.
Finally, Robert Sillerman’s second attempt at SFX is over, just five years after restarting the company. The first venture of SFX Entertainment ended in 1998 when he sold the company to Clear Channel Communications Inc. for $4.4 billion in stock and debt assumption. For now, the company remains up and running, but with a new CEO on the horizon, this may be the start of SFX’s rebirth.
Read the full statement from Tomorrowland spokesperson Debby Wilmsen below:
Both the festival in Boom (Belgium) and the one in Itu (Sao Paulo, Brazil) will go ahead without any disruption due to the current situation. In light of the present situation, no concrete plans have yet been made for TomorrowWorld 2016.
We are currently exploring all possibilities. Tomorrowland has always worked from a long-term philosophy and in this context, all options are being considered to ensure that, like in Belgium and Brazil, the festival will have a bright future in the United States as well.
In the past few months, it had been clear that SFX, our partner for TomorrowWorld and Tomorrowland Brasil, is experiencing financial difficulties. Last night we received the news that SFX Entertainment, the publicly listed American company founded by Robert F.X. Sillerman, has applied for Chapter 11 bankruptcy protection from creditors. In the coming weeks, SFX will be undergoing a financial and operational reorganization. SFX Entertainment is a stakeholder in numerous events and projects including Awakenings, Sensation, Nature One, Electric Zoo and Rock in Rio.
Since 2013 we have collaborated with SFX for the foreign editions of Tomorrowland held in the USA and Brazil. However, we have noticed that our vision and goals, including a long-term strategy, are different from those of the publicly listed company.
In 2013 the Dutch company ID&T, which then owned 50% of the shares in Tomorrowland, sold its business to the American SFX. Manu & Michiel Beers then decided to buy back the 50% stake that the Dutch ID&T held in Tomorrowland in Belgium, with the result that for the past two years, the Tomorrowland festival has been 100% Belgian, but this has entailed an obligation to collaborate SFX for the foreign editions.
The Belgian festival Tomorrowland remains the passion and life’s work of the driving forces behind its creation, Manu & Michiel Beers and their young, motivated staff in Antwerp and they intend to continue to bring the same level of ambition to the festivals in Belgium and abroad in the coming years.
The Chapter 11 procedure will have no consequences for Tomorrowland in Boom. The festival in Belgium is created, organized and managed for 100 % by the Belgian team. Tomorrowland Brazil will also take place as planned two months from now in Itu (Sao Paulo). Tomorrowland Brazil is being organized in close consultation with the Belgian team by a motivated Brazilian team that is able to work independently of SFX in North America for all aspects of the event.
Source: Wall Street Journal / NASDAQ