Today, Founder and Executive Editor of Amplify Dave Brooks reported on the current state of SFX, Robert Sillerman’s slowly drowning corporation.
With the company’s stock now down 95% – just $.32 cents from a high of $4.94 in June of this year – and the shareholders’ consistently mounting distrust of its owner, SFX’s chances to remain afloat are growing less and less frequent. Due to its $300 million and counting in debt, the company has recently announced a partnership with investment bank Moelis & Co..
A spokesman for Sillerman described the union as vaguely as he could:
“It is correct that the company hired Moelis to examine broadly its position. That principally includes sales of non-strategic assets as well as examining the capital structure of the company.”
According to Brooks however, these new efforts to stabilize the company are coming far too late. In 2015 so far, SFX has lost $144 million, over $52 million of it in the most recent fiscal quarter. Sillerman’s main objective, Brooks says, is finding a way to fund his move to private and his “cash-devouring festivals.”
Declaring bankruptcy, he says, may be the company’s only available life raft.
“There’s a lot of value within SFX and once those properties break free of Sillerman’s gross mismanagement, there’s a great opportunity to flourish and grow under new ownership. SFX cannot be saved, but its dissolution has the potential to reinvigorate the market and bring some new voices into the industry.”
By selling their assets to independent buyers – like promotors, organizers, streaming services, etc. – the electronic dance music industry may be able to experience a rebirth. Only time will tell if Sillerman decides to continue piloting the slow-motion train wreck, or breaks up his own corporation to give those with less reach a chance to rebuild.