Sunday, the dance music community was rocked by the news of the tragic deaths of two attendees at New York’s Electric Zoo. The deaths resulted in the shutdown of the third and final day of the event under the City’s recommendation and Electric Zoo’s compliance. The repercussions of this tragedy will likely be felt across the world of electronic dance music. Notably, this tragedy comes at a particularly crucial time for one of the industry’s biggest investment group, SFX Entertainment.
Headed by Robert Sillerman, the group aims to capitalize on the rapid growth of electronic dance music or electronic music culture as they so aptly called it. The group has already filed a $175 million IPO (initial public offering) to go public. SFX Entertainment are already majority owners of Beatport, Disco Donnie Presents, Life in Color and MMG Nightlife, SFX is planning to acquire Totem, ID&T and Made Event, the promoters of Electric Zoo. Under the terms of the planned purchase of Made Event, SFX will acquire 70% of the company for $35 million and will be required to buy the remaining 30% in 2018.
The deaths at Electric Zoo will undoubtedly cause SFX Entertainment to take a large financial hit. Companies that want their brand associated with these events are sure to become scarce. Advertising plays a massive role in the production of these events, especially the large scale ones. With SFX looking to go public next week, this tragedy will likely cause investors to be wary. SFX believes they are “the largest producer of live events and entertainment content focused exclusively on the electronic music culture (“EMC”), based on attendance and revenue.” A big financial hit to this investment group could very well change the course of electronic dance music. Ambivalent advertisers and nervous investors are a very dangerous concoction for SFX Entertainment and, in turn, electronic dance music as a whole.
Not only will this take a toll on SFX but also likely the rest of the electronic music business world as well. This tragedy will cause far-reaching consequences for both the big and small companies. Resources could become possibly scarce. For smaller organizations this could mean being forced to sell to bigger, more respected (by advertisers and investors) and more established companies.
Lastly, I just want to say that I don’t mean to, in any way, look past the fact that two people lost their lives. I just feel that it is important the electronic dance music community understands the consequences of this tragedy on a larger scale.