SFX Entertainment, the company that owns Australia’s Stereosonic festival, has declared bankruptcy.
The US-based organisation, which also owns major international dance brands such as Tomorrowland and Beatport, has filed for Chapter 11 following a year of financial trouble that saw its stock plunge by more than 95 percent.
As The New York Times reports, SFX have struck a deal which will help them wipe $300 million of debt and continue to operate as normal – at least for now.
In the meantime, SFX has been taken off the stock market and will continue to be run as a privately-owned company.
However, Melbourne-based SFX subsidiary Totem Onelove has released its own statement, promising that the action will not affect Stereo or any of its other events.
“This proceeding is taking place in the United States only; none of the international operating subsidiaries are included or impacted,” explained General Manager Damien Kease.
“Totem Onelove is not part of the SFX Chapter 11. Totem Onelove will continue to operate as normal. We are cash-flow positive, can and will pay business expenses and remain committed to planning for, preparing, and producing the festival and events we are known for.”
He continued: “It is important to note that the SFX Chapter 11 proceeding taking place in the United States is not liquidation. SFX is not going out of business and, in fact, has received a sizeable capital infusion to pay for ongoing operating expenses. We at Totem Onelove see this as a positive turn of events for the SFX North American businesses that can now focus on the future.”
There’s also been a slight restructuring of the SFX hierarchy, with founder Robert Sillerman stepping down as CEO, to remain on-board as Chairman.
“Of course this was not where we thought we’d be but with this restructuring we have the opportunity to achieve all that SFX can and will be. I’m looking forward to continuing to be part of the new SFX as Chairman,” he said.
“We will immediately commence a search for a new CEO to lead us as we continue to set the trend in the exploding culture that is electronic music.”
However, even if Totem Onelove’s statement is true – and Stereo fans have nothing to fear from SFX’s bankruptcy declaration – the Aussie dance festival still has a volatile and reactive NSW Government to contend with.
Premier Mike Baird had one glowering eye clearly fixed on Stereosonic when he recently threatened to shut down music festivals that fail to stamp out drug use at their events, after one person died from overdosing on MDMA at the Sydney leg (and another at the Adelaide leg) in 2015.
However, Stereo founder Richie McNeil has recently weighed in on the whole drug debate, arguing that organisers, staff and police are already doing all that they can with the resources and legal rights that they have to prevent drugs from being smuggled into their events.
The government – on the other hand – could be doing a lot more.
UPDATE 07/04/16: It’s official Stereosonic 2016 has been cancelled.