SFX Entertainment filed for bankruptcy in January, which was a catalyst for a number of events that needed to take place in order for the company to get back on track. All eyes were on Beatport, the online music retailer, to see how the SFX asset would be unloaded.
The financial struggles of Beatport in recent history is well documented with the company reporting $5.5 million losses in 2015 alone. Earlier this month SFX announced that the asset was not in line with the company's future financial plans and "cannot afford to make additional investments in Beatport as may be needed in the future."
18 independent investors have been in talks to acquire Beatport from SFX. It was announced that the bidding would begin in April, as bids are collected until the 28th and the official auction taking place May 3rd. Once bidding starts, buyers will be able to increase the bid at increments of $250,000, with the winning bid being announced on May 5th.
Now a legal document has surfaced which outlines the legal ramifications regarding the auction, along with what prompted SFX to declare for bankruptcy. Here is a portion of the findings that deal directly with Beatport:
“Specifically with respect to the Beatport Assets, Moelis and Beatport have been in contact with approximately 18 potential buyers, including certain potential buyers that expressed interest during the Special Committee Engagement. 5 new non-disclosure agreements were executed, and there has been 1 preliminary indication of interest.”
“While the Beatport Assets are valuable to the SFX enterprise, given SFX’s current financial condition, SFX cannot afford to make additional investments in Beatport as may be needed in the future, and therefore, has decided to sell the Beatport Assets.”
You can read the Beatport Legal Document below:
[via Your EDM]