Examining The Damage: 3 Revelations From SFX Entertainment’s Recent Financials


Examining The Damage: 3 Revelations From SFX Entertainment's Recent Financials

Everyone’s talking about the EDM bubble these days – well, they were already talking about it a few years ago, but in the wake of SFX Entertainment’s chapter 11 bankruptcy filing in February, we’re all finding ourselves talking about it again. That means disco has to be dead for real this time, right?

It might surprise some of our readership to learn this, but a bubble is an actual, measurable economic concept – not just a hyperbole music writers use to get more clicks by warning of the impending EDM end of times. An economy bubble occurs when the perceived value of a market or industry exceeds its actual value, meaning that by and large, the people who invested in it receive less than what they put in.

That may not sound like a big deal when laid out in such cut-and-dry terms, but you can’t ignore how much it affects the music scene itself. When venture capitalists aren’t confident enough to keep investing in the businesses that make up an industry, the resulting contraction means that business owners must cut corners wherever possible, which translates to less music jobs and less resources for musicians to keep devoting time to their craft. The next time you hear someone celebrate the current state of dance music because it’ll drive it back underground, consider whether they’d say it if they thought it might put them out of a job.

So then, are we experiencing an EDM bubble, or aren’t we? The short answer is that we don’t know yet. We don’t assemble committees to calculate the growth of the entire EDM industry each fiscal quarter like the gross domestic product of a nation, after all. The best we have is business reports compiled by “dancenomics” analyst Kevin Watson, which he presents annually at the International Music Summit in Ibiza. While last year’s report indicated that electronic music was still growing (only at a slower rate), we won’t know how SFX Entertainment’s well-documented mismanagement of its numerous assets truly affected the industry until late next month.

Until then, however, court documents that have surfaced over the course of SFX’s chapter 11 bankruptcy restructuring proceedings reveal the trajectory of a handful of those individual brands. Predictably, most of the statements reveal a significant decline from one year to the next, and other curious details reinforce what we’ve been saying all along: How former SFX Entertainment CEO Robert Sillerman manages to dress himself in the morning is nothing short of a miracle.

In this article we’ll explore some of the more noteworthy details from financial statements filed for SFX-owned companies on April 14th. For the full record of documents from the proceedings, you can head on over here.

All Posts