You’ve probably heard the news by now: SFX Entertainment has filed for bankruptcy. As the bankruptcy begins to gain momentum, one of the biggest questions on industry minds is “What’s next?” The company will be going private (no more public stock offerings), and Beatport, acquired by SFXE in 2013 for over $50M, has already released a statement declaring “business as usual” at its offices. Now Debby Wilmsen, spokesperson for Tomorrowland and TomorrowWorld, is sharing a less certain picture of their future.
First some background: “In 2013 the Dutch company ID&T, which then owned 50% of the shares in Tomorrowland, sold its business to the American company SFX. Manu & Michiel Beers then decided to buy back the 50% stake that the Dutch ID&T held in Tomorrowland in Belgium, with the result that for the past two years, the Tomorrowland festival has been 100% Belgian, but this has entailed an obligation to collaborate SFX for the foreign editions.”
Both the festival in Boom (Belgium) and the one in Itu (Sao Paulo, Brazil) will go ahead without any disruption due to the current situation. In light of the present situation, no concrete plans have yet been made for TomorrowWorld 2016.
Due to this strange balance of ownership, the Belgium and Brazil-based Tomorrowland festivals are secure. The Atlanta-based TomorrowWorld is a different story. Following the muddy catastrophe that was TomorrowWorld 2015—we admit that we saw this coming. Wilmsen makes it clear in her statement that SFX wasn’t always their favorite festival partner, saying, “[In the past few months] we have noticed that our vision and goals, including a long-term strategy, are different from those of the publicly listed company.”
If you’re planning on making the pilgrimage to Belgium for Tomorrowland this year, don’t fret. Things are still on track, even if they don’t totally make sense yet. We suggest EDM fans take caution though when considering TomorrowWorld. SFXE’s future is anything but clear, and without the full support of its festival partners, it would be wise to consider other mega-festivals like Ultra or EDC this summer. You could also explore more interesting festivals like What The Festival?!, Lightening in a Bottle, and CRSSD.
The other SFX properties will likely remain online throughout the bankruptcy process. This is encouraging, but the bad news is that SFXE is one of the most important players in the game, and they’ve failed financial muster. CEO Robert Sillerman will be stepping down and the hunt for a new CEO has already begun. Mr. Sillerman isn’t exactly going far, though; He will remain chairman of the board.
Is this the first big sign that the EDM bubble is about to burst? While possible, it’s important to remember that EDM is still a billion-dollar industry, and that bankruptcy doesn’t mean destruction. It means financial restructuring, hopefully for the better. What do you think? Isolated incident, or a hint at EDM’s future?
[accordion-group title=”Read the full TomorrowWorld statement from Debby Wilmsen”]“Both the festival in Boom (Belgium) and the one in Itu (Sao Paulo, Brazil) will go ahead without any disruption due to the current situation. In light of the present situation, no concrete plans have yet been made for TomorrowWorld 2016. We are currently exploring all possibilities. Tomorrowland has always worked from a long-term philosophy and in this context, all options are being considered to ensure that, like in Belgium and Brazil, the festival will have a bright future in the United States as well.
In the past few months, it had been clear that SFX, our partner for TomorrowWorld and Tomorrowland Brasil, is experiencing financial difficulties. Last night we received the news that SFX Entertainment, the publicly listed American company founded by Robert F.X. Sillerman, has applied for Chapter 11 bankruptcy protection from creditors. In the coming weeks, SFX will be undergoing a financial and operational reorganization. SFX Entertainment is a stakeholder in numerous events and projects including Awakenings, Sensation, Nature One, Electric Zoo and Rock in Rio.
Since 2013, we have collaborated with SFX for the foreign editions of Tomorrowland held in the USA and Brazil. However, we have noticed that our vision and goals, including a long-term strategy, are different from those of the publicly listed company.
In 2013, the Dutch company ID&T, which then owned 50% of the shares in Tomorrowland, sold its business to the American SFX. Manu & Michiel Beers then decided to buy back the 50% stake that the Dutch ID&T held in Tomorrowland in Belgium, with the result that for the past two years, the Tomorrowland festival has been 100% Belgian, but this has entailed an obligation to collaborate SFX for the foreign editions.
The Belgian festival Tomorrowland remains the passion and life’s work of the driving forces behind its creation, Manu & Michiel Beers and their young, motivated staff in Antwerp and they intend to continue to bring the same level of ambition to the festivals in Belgium and abroad in the coming years.
The Chapter 11 procedure will have no consequences for Tomorrowland in Boom. The festival in Belgium is created, organized and managed for 100% by the Belgian team. Tomorrowland Brazil will also take place as planned two months from now in Itu (Sao Paulo). Tomorrowland Brazil is being organized in close consultation with the Belgian team by a motivated Brazilian team that is able to work independently of SFX in North America for all aspects of the event.”[/accordion-group]
(h/t: Atlanta Business Chronicle)
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