Bankrupt dance music promoter SFX Entertainment has a plan to move forward -- with veteran concert-business executive Randy Phillips at the helm. Phillips, the former CEO of entertainment giant AEG Live and the man behind Michael Jackson's ill-fated plan to play 50 shows at the O2 in London in 2009 (later chronicled in the This Is It documentary), has been offered the CEO job and plans to accept it, according to a source close to the situation. The salary is in the $2 million range.
On July 26, SFX, which went public in October 2013 with a value of more than $1 billion and entered Chapter 11 in February, filed a restructuring plan to emerge from bankruptcy. For the past two months Phillips has worked for SFX as a consultant on the reorganization, Billboard has learned. A Delaware bankruptcy court will consider the company's proposal in a hearing on Aug. 30. Phillips, who at AEG Live oversaw the expansion of the company's festival division, would replace SFX's interim CEO, Michael Katzenstein, currently serving as chief restructuring officer. SFX declined to comment on specific plans.
Under CEO Robert F.X. Sillerman, the financier who in the 1990s put together the company that became Live Nation, SFX acquired more than a dozen dance music companies -- including online store Beatport and promoters ID&T (producer of Tomorrowland) and Made Event (Electric Zoo) -- for prices many observers believe were inflated. The company never found much synergy among its acquisitions, although the festivals have remained successful. The just-held 2016 edition of Tomorrowland Belgium sold out before the lineup was announced.
At AEG, Phillips was known for his considerable appetite for risk, as evidenced by a $26 million world tour guarantee for then-15-year-old YouTube star Justin Bieber. Phillips also promoted world tours by Britney Spears and Bon Jovi and oversaw a festival business that included Coachella and the New Orleans Jazz & Heritage Festival. Perhaps most notably, he helped re-imagine the concept of artist residencies, with AEG Live's Concerts West division instrumental in putting together the deals for Celine Dion's groundbreaking run at the Colosseum at Caesars Palace in Las Vegas. Phillips left AEG in November 2013 following the resignation of former AEG CEO Tim Leiweke and massive restructuring at the firm. He landed at Global Entertainment, which produced a July 4, 2015, Rolling Stones show at the Indianapolis Motor Speedway but never found its footing in the United States.
"I can't think of anyone more qualified," says Leiweke, now partnered with Irving Azoff in the venue network Oak View Group. "He is uniquely [positioned] to step into a situation like this and bring vision and action to the company." Lee Anderson of AM Only, a powerful agent in the EDM sector, concurs: "Randy is a legend in the industry, and we have high hopes for the future of SFX with him in charge."
Other concert-business executives were more skeptical about the company's chances, even with Phillips at the helm. "No one can spin a losing situation better than Randy Phillips," says one industry veteran, who asked to remain anonymous. Adds another: "Why would a distressed company want to hire a guy who has been fired from two jobs in the last 18 months? I guess people, like companies, package and repackage themselves."
In May, Sillerman, who lost his equity in SFX when the company went into Chapter 11 (eliminating $490 million of its debt), told Billboard that SFX had a brighter future than its financial results indicated. "The company will be a robust and successful enterprise when it emerges from bankruptcy," he said. "But it will be different."
"Once it's out of debt, SFX should be viable," a source close to the company concurs. (The company abandoned its previous restructuring plan on June 20.) Its failure to become a high-profile consumer brand could even help it recover. "I'd say that 90 percent of the public doesn't know the name SFX," says the source, "which was part of the problem in the first place."
This article was originally published in the Aug. 6 issue of Billboard.