SFX Emerges From Bankruptcy with a New Name, LiveStyle, and New Leader in Randy Phillips
The electronic music giant SFX Entertainment has come out of bankruptcy, and with a new name: “LiveStyle. Inc.” Don't expect it to stay in its old lane.
The electronic music giant SFX Entertainment has come out of bankruptcy -- under a new name, LiveStyle.
SFX, which owns the digital music retailer Beatport and the ticketing company Paylogic as well as leading electronic music festivals Electric Zoo, Mysteryland and Life in Color, entered Chapter 11 bankruptcy on February 1 to restructure hundreds of millions of dollars in debt. The company emerged from the bankruptcy process just last week, on December 2, when former AEG Live Randy Phillips, who helped lead the company through bankruptcy, was officially named president and CEO. The restructured company, still the largest producer of electronic music festivals even after selling off a few assets, has been rebranded as LiveStyle.
“Every time I said the name ‘SFX’ to someone, I got this negative reaction -- people would make the sign of the cross,” Phillips says, when asked why he decided to change the name of the company. Although most of SFX’s festivals are thriving, the company itself has something of a bad reputation. Founded by Robert F.X. Sillerman, the successful media entrepreneur known for his giant appetite for risk and his over-the-top sense of humor, SFX bought up electronic promoters at stratospheric prices and folded them into a company that received a valuation of more than $1 billion when it went public in October 2013. Then it collapsed: Just two and a half years later, SFX had a market value of less than $10 million.
Phillips, who didn’t join the company until after Sillerman left, is known for taking risks and joking around himself. At AEG, he promoted tours by Justin Bieber and Britney Spears and oversaw the Coachella Valley Music and Arts Festival. Phillips originally signed on simply to help guide the company through the bankruptcy process, then decided to take the top job after the company agreed to relocate its corporate headquarters from New York to Los Angeles. Charles Ciongoli will be the company’s chief financial officer.
Phillips plans to slightly shift the focus of the company; instead of an electronic music company -- Phillips shuns the term "EDM" -- "we're going to be a music company that specializes in electronic music," he says. Some LiveStyle events, like the annual Electric Zoo festival, held Labor Day weekend in New York City, will continue to focus on electronic music. Others, such as Mysteryland, held on Memorial Day weekend in Bethel, New York, "will be broadened, more like Coachella," he says. LiveStyle will also continue to run the digital marketplace Beatport, which Phillips says is now profitable after it discontinued its streaming service to return to its former focus on selling high-fidelity downloads of electronic music for DJs and hardcore dance fans.
Although the promoters that LiveStyle owns will continue to operate with a degree of independence, Phillips says the company will go forward with a more integrated model, trimming redundant costs for services like accounting.
So far, Phillips hasn’t said anything about why SFX collapsed before he got there. But -- unsurprisingly for one of the concert business’ more outspoken executives -- he has a clear point of view. "The problem was that it was put together too quickly -- it was based on doing an IPO," or initial public offering, he says. Sillerman also “sold a story about sponsorship," Phillips says. "But sponsorship has to be the icing on the cake -- not the cake itself."
LiveStyle is now owned by a range of investors; 70 percent of it is owned by Axar Capital and an investment arm of the German insurance giant Allianz. Although SFX had tried to sell some of its assets during bankruptcy, Phillips plans to keep the company intact for now. "We have no plans to sell anything," he says. "Now is the time to clean this up, make it function, and grow it."