Beatport To Pay Royalties, SFX CEO Says He's 'Deeply Embarrassed'

The EDM download and streaming site says it will process payments next week.

Beatport plans to process royalties next week and bring to an end an unusual, controversial episode in digital music, according to an email the download and streaming company sent to labels on Friday, in full below.

Record labels had been told earlier this week their money was "trapped" while parent company SFX was in a "going private" process. Beatport did not explain the reason for the delay and blamed the problem on "unrelated matters."

The email admitted that major labels and "some labels participating in the new Beatport streaming service" received payments before the hold was put in place. Beatport denied acting with preferential treatment.

SFX chairman and CEO Robert Sillerman was contrite in a statement included in the email. "The way we handled this was inexcusable and should never have happened. The thousands of creators who have made Beatport what it is today deserved better, and I am deeply embarrassed, both personally and professionally, by what has happened," he said.

The "going private" period relates to Sillerman's current effort to buy all available SFX shares. The company is currently waiting for Sillerman to secure financing for his proposed takeover of the publicly traded company. SFX accepted Sillerman's proposal in May and gave him an extension last month. 

 

Payment Status Update

Dear [Rights holder],

It was confirmed today that Beatport's label supplier payments, which have been delayed temporarily via a hold at SFX Entertainment, will be processed next week.

We deeply regret any hardships this delay has placed on members of the creative community - especially independent labels and artists, who are the lifeblood of electronic music culture and who have been long standing partners and suppliers to Beatport since 2004. We are truly sorry this has happened, and that we allowed payment distribution to get caught up in unrelated matters.

While the majority of payments were delayed, some payments were made before the hold went into effect, and those included payments to major labels and some labels participating in the new Beatport streaming service. This was not preferential treatment in any way, but we understand how the optics may illustrate just the opposite.

Beatport is nothing without creative partners. We remain indelibly committed to serving the electronic music community and providing tools and resources for DJs, producers, and labels around the world to reach their fans and develop their careers. Anything that gets in the way of that mission must be dealt with swiftly so we can all get back to focusing on our core goals. To that end we appreciate the assistance of AFEM during the process this week and we look forward to continuing the growth of Beatport in support of the electronic music community.

Robert F.X. Sillerman, Chairman & CEO, SFX Entertainment

"I regret that unrelated elements made Beatport delay some payments for the first and only time in its more than 10 year history. The way we handled this was inexcusable and should never have happened. The thousands of creators who have made Beatport what it is today deserved better, and I am deeply embarrassed, both personally and professionally, by what has happened."

Mark Lawrence, CEO, AFEM

"It's been a difficult and delicate few days leading up to this positive outcome. I can't commend Beatport enough for the way in which they have handled the resolution and I am pleased that AFEM was able to support both its member labels and Beatport."