SFX has been extended a lifeline by judge Mary Walrath who is overseeing its bankruptcy.
A pool of $15 million has been set aside for the company, that last week announced the termination of 50 New York-based employees, to pay artists booked for its festivals this summer, allowing SFX to spend despite being bankrupt.
This money should allow SFX’s planned events to go ahead which it will hope to profit from and make steps towards re-establishing itself as a respected and successful business. The company’s reputation has declined to the extent that a number of artists’ agents demand 100 per cent payment before act’s names can be announced on line-ups.
SFX lawyer Dennis Meloro’s motion to the judge read: “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 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.”
The deal was agreed after a month of negotiations between SFX and its bankruptcy financier DIP Lenders, and WME, AM Only, Windish and Paradigm Talent Agency.
Its terms allow for headliners at festival of 10,000 or higher capacity to be paid 25 percent before being unveiled on the line-up, 50 per cent thirty days before the events takes place, and 25 per cent no more than five business days prior to the festival taking place. If the event is cancelled, SFX must still pay booked artists 100 per cent of the agreed fee.
Acts lower down the bill will be paid at the same intervals, but at amounts of 15 per cent, 40 per cent and 45 per cent respectively. Contracts will remain in place if the festival is sold.
Read our feature Fall of an empire: six things to expect in the wake of the SFX crash here.
Patrick Hinton is Mixmag's Digital Intern, follow him on Twitter