Judge Orders SFX to Allocate $15m for Artist Repayment in Bankruptcy Case
A judge has ordered SFX to allocate $15 million dollars to ensure EDM artists booked for SFX festivals this summer are paid.
Although TomorrowWorld and Stereosonic have already announced that they will not be returning in 2016, the former EDM giant still has stakes in several other festival events including Mysteryland and Electric Zoo.
Confidence in SFX has fallen so low that booking agencies representing artists scheduled to play SFX events have become concerned for their artist’s compensation. On Monday, US bankruptcy judge Mary Walrath approved Artist Carveout Agreements between SFX and AM Only, Windish Agency, WME, and Paradigm Talent Agency.
According to preliminary statements made by SFX attorney Dennis Meloro,
“The value of the Debtors estates and their ongoing business depends on their continued successful festivals, events, and club shows. The profitability of these Shows hinges, in significant part on the Artists performing and their ability to attract large number of fans. The pool of Artists that can reliably attract large number 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.”
(Electric Zoo 2015)
According to court documents, artists will be paid 100% in full prior to the event and have been broken down as follows:
Headliners of SFX events are entitled to, "25% before announcement of the lineup; 50% thirty days before the Event Date, and 25% not less than five business days prior to the Event Date."
Non-headliners of SFX events are entitled to, "15% before announcement of the lineup; 40% thirty days before the Event Date, and 45% not less than five business days prior to the Event."
Additionally artists of SFX events in clubs with less than 10,000 capacity are entitled to, "20% before announcement of the lineup; 40% thirty days before the Event Date, and 40% not less than five business days prior to the Event Date."
For anyone with familiarity in show promotion or artist booking, paying artists in full prior to the event is not a regular occurrence. Typically, the bulk of the money that production companies make is made during the event. For SFX to pay artists with lavish booking fees in advance is not a good sign for the company’s future. Hopefully the remaining SFX events will go out without a hitch and allow the company to reorganize and continue to provide for it’s nearly 1,000 direct and subsidiary employees.