Beatport, a longtime fixture in the EDM and DJ community, was acquired for a reported $50 million by SFX Entertainment in 2013. Sounds great, except that SFX has now declared bankruptcy, with more than $300 million in outstanding debt (at least) wiped clean.
That puts subsidiaries like Beatport at serious risk of begin sold, liquidated, or terminated to satisfy court-structured bankruptcy orders. One possibility is a below-market ‘fire sale’ to capture immediate cash value.
This morning, the company issued the following statement to Digital Music News:
“On behalf of BEATPORT , we are sharing this statement with you:
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.”
The statement is designed to minimize disruption, both for fans and DJs alike. That said, the fate of this site is now completely uncertain given SFX’s massive debt restructuring ahead. More realistically, Beatport’s fate will rest with a bankruptcy court, and could be sold at below-market rates to satisfy creditors. Indeed, creditors and Wall Street investors are certain to demand a restructuring plan that maximizes their recoveries on this bad bet.
On Beatport’s site, the company offered continued assurances, only some of which can be realistically guaranteed. Whether these claims ultimately lead to lawsuits from stakeholders and investors remains a thorny question.
“Earlier today, news broke that our parent company SFX Entertainment introduced a financial reorganization plan that includes both new financing and filing for Chapter 11 bankruptcy protection.
All Beatport users, customers, and partners should rest assured knowing that this action will have no impact on our ability to continue offering the most complete electronic music experience available. Around here, it’s business as usual.
That means the 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.
In fact, Beatport is expanding. Just last week we launched a version of Beatport customized for the Dutch market, our first foray into operating a fully localized service, and we will be introducing several new features to our News and Video sections over the course of the coming weeks.
For 12 years, Beatport has served all facets of the electronic music community–DJs, artists, labels, and fans alike–and that’s not going to change anytime soon. From the beginning, we’ve committed ourselves to the long haul, ignoring the mainstream trends, fads, or bubbles that only serve to distract and divide. We remain focused on the music and will continue to reinvest in the creative community every step of the way. We have a lot of exciting plans for the year ahead, and can’t wait to show everyone what’s next.
Until then… the beat goes on.”
More details on both SFX and its subsidiaries, including Beatport, as the situation develops.