SFX to Cut New York Staff
SFX Entertainment, the financially distressed dance music promoter current in Chapter 11 bankruptcy restructuring, will lay off about 50 employees in New York in July, the company disclosed Thursday. The layoffs are part of a reorganization that is expected to end this summer. Because the New York State Worker Adjustment and Retraining Notification Act requires a company to give employees 90 day of notice before “mass layoffs.” The announcement did not mention layoffs outside of New York.
With underwhelming revenue and facing a negative cash balance, SFX filed for bankruptcy on February 1. The company plans to save $300 million in its court-supervised restructuring process. It has been giving capital for ongoing operating expenses and has turned over leadership to FTI Consulting, the company hired to help SFX restructure is $490 million of debt and exit Chapter 11. In a letter to staff just before departing, former CEO and founder Robert Sillerman wrote that "the disappointment I know we all feel should not be the lasting impression that remains."
The sale of SFX’s three subsidiaries are continuing as planned. Beatport is slated to be sold in May regardless of layoffs in July. Bids for Beatport are due April 28, the auction is scheduled for May 3 and the winner will have a court approval date on May 5. In a statement, Beatport says its sale process "is progressing well and we’re very encouraged with the interest received to date. There are multiple parties currently conducting due diligence whom we believe would be excellent partners to Beatport." Marketing company Famehouse and ticketing company Flavorous are also for sale.