The Beatport drama continues as the music store and media portal informed labels and artists today that the company's ongoing privatization has "trapped certain earned label payments" and that those payments would not be made at this time. This payment halt affects all purchases made through the Beatport store last quarter (April to June). Here is what Beatport had to say to artists and labels:
"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.
- The Beatport Team"
Beatport assures labels and artists that these receivables will be made whole in the future, but no one's feeling too certain right now. This news comes along with an ultimatum as SFX Entertainment's directors give notice to SFX chairman and CEO Robert F.X. Sillerman that he has until 10 AM on August 13, 2015 to demonstrate that he can finance the company's privatization, including a cash buyback of stockholders at $5.25 per share (SFXE is trading at $3.04 as of 1 PM EDT today). There are no competing offers to Sillerman's bid, but others have expressed interest in SFX's share of key brands like Tomorrowland and Beatport, making a sale of SFX's key assets possible if Sillerman is unable to meet the deadline.
He's only been Beatport's CEO for a few weeks, but despite some prescient hires and a Spotify collaboration, already Greg Consiglio seems unafraid to anger and alienate the content producers that populate its marketplace. On Facebook, Environ Records boss Morgan Geist noted that he "couldn't seem to find the word "Sorry" in this email."