SFX Entertainment Inc., a live-events company founded by Southampton entertainment entrepreneur Robert F.X. Sillerman, filed for bankruptcy protection Monday after running up unmanageable debts to build a portfolio of electronic dance music festivals.
During its expansion, the Manhattan-based company added events including TomorrowWorld, Beatport, Mysteryland, Sensation and Electric Zoo. SFX also runs nightclubs and an online platform for EDM artists and fans.
“The growth strategy, however, resulted in high acquisition-related costs, and the company’s operating costs also remain high as the company has not yet completed the integration of the acquired companies,” chief restructuring officer Michael Katzenstein said in a court filing in U.S. Bankruptcy Court in Wilmington, Delaware. Not all the acquisitions have panned out, either, he added.
SFX said an ad hoc group of bondholders has committed to providing as much as $115 million in debtor-in-possession financing while the company tries to push through a plan to cut $300 million in debt and swap debt for equity in a reorganized business.
During the reorganization the shows will go on and a search will begin for a new chief executive officer, Sillerman said in a statement. Sillerman will be chairman of the reorganized SFX.
Ffounder of radio-station owner SFX Broadcasting, he created the predecessor to what is now the world’s largest concert promoter, Live Nation Entertainment Inc., selling it for $4 billion to Clear Channel Communications Inc. in 2000. He started a new events company with the same name, SFX Entertainment, in 2012 to take advantage of the growing popularity of electronic dance music.
He is also the former chancellor of Southampton College.
SFX listed assets of $661.6 million and debts of $490.2 million in Chapter 11 documents filed Monday. The company reported a third- quarter net loss of $54.5 million, on a 7 percent decline in sales.
With Newsday Staff