With festival season upon us, SFX Entertainment has been forced to set aside $15 million in order to pay artist booking fees at upcoming events.
The new deal is seen as a lifeline for the company that filed for Chapter 11 bankruptcy back in February. Already being forced to cancel festivals like TomorrowWorld and Stereosonic, other SFX festivals like Tomorrowland, Electric Zoo and Spring Awakening remain a major priority for the company to remain operational.
“The value of the debtors’ estates and their ongoing business depends on their continued successful festivals, events and club shows,” declares the motion from SFX attorney Dennis Meloro. “The profitability of these shows hinges, in significant part, on the artists performing and their ability to attract large numbers of fans. The pool of artists that can reliably attract large numbers of fans to the shows is extremely limited and the vast majority of them are represented by the agents. Thus, the debtors relationship with the agents and their represented artists are vital to a successful reorganization.”
With this new deal headlining artists at the festivals of 10,000 patrons or more will be paid 15% before the lineup is revealed, 50% thirty days before the festival takes place and 25% no less than five days before the festival. Cancellation of a festival results in artists being payed %100 of what they are owed.
The remaining artists that are booked will be paid 15% prior to the lineup being revealed, %40 thirty days before the festival, and %45 no less than five days before the festival. A similar agreement goes for club events with artists being paid %20 before the lineup reveal, %40 thirty days prior to the event and %40 no less than five days before the event.
According to a separate court document, the lineup for Electric Zoo and Spring Awakening was leaked as the document focused on artist payments.
This comes on the heels of SFX having to lay off 50 employees in New York and CEO Robert Sillerman stepping down. Beatport is also being auctioned off along with other assets.