The Electronic Dance Music (EDM) industry has seen its share of extreme ups and downs in the last few years. Built largely on big-name glamour and social-media driven popularity, no one has cashed in on the EDM trend like those riding the festival wave, such as successful events companies Insomniac and Goldenvoice; well known for putting on the annually anticipated Electric Daisy Carnival and Coachella music festivals. Unfortunately, not everyone who has entered the game has profited so well. Such is the case for electronic music events company SFX Entertainment. SFX has been on bankruptcy watch since late November 2015, and scrutiny intensified last Thursday when its stock price reached an all time low after discovery of SFX’s default on a $3 million interest payment. SFX has met with much investor criticism due to CEO Robert Sillerman’s idiosyncratic management style as well as other controversial events such as Beatport’s, a popular music hosting site owned by SFX, failure to complete royalty payments (http://www.billboard.com/articles/business/6656707/beatport-royalties-sfx-ceo-embarrassed) and its involvement with the TomorrowWorld scandal
Yet, it looks like music angels were watching over SFX last week, or perhaps just your run-of-the-mill friends in high places. Before the market opened last Friday, SFX announced it received $20 million in fresh financing from undisclosed investors, rumored to be a group with previous experience working with Sillerman. This announcement caused SFX stock price to increase over 50% by market close. Only time will tell whether this last minute injection will be enough to revive the EDM corpse that is SFX Entertainment.
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Jennifer Marr is an Entertainment and Sports Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and a current first year student at Harvard Law School (Class of 2018).