Electric Daisy Carnival

A man dances with glowing materials during the 18th annual Electric Daisy Carnival at Las Vegas Motor Speedway on June 20, 2014 in Las Vegas, Nevada. 

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The ups and downs of SFX Entertainment -- currently in the midst of a bankruptcy and top-level restructuring -- and the company's complex web of acquisitions and financial maneuverings would confuse even the most attentive of industry watchers. Let's fix that.

Is SFX going out of business?

No. SFX has filed for Chapter 11 bankruptcy protection in order to restructure its debt. Last month it hired FTI Consulting, a financial advisory firm that specializes in distressed companies, to help it pursue restructuring options.

Why is SFX in bankruptcy court?

SFX filed for Chapter 11 bankruptcy to eliminate $300 million of debt and regain financial stability. A group of existing bondholders have given SFX $115 million "to pay ongoing, normal course of business obligations including artists, venues, sponsors, partners, vendors and suppliers," according to the company.

What is Chapter 11 bankruptcy?

Chapter 11 is a type of bankruptcy that gives a company protection from creditors in order to restructure its debt. Chapter 7 bankruptcy involves a company liquidating its assets and going out of business.

What's going on in bankruptcy court?

SFX submitted an operating plan that was approved by the bankruptcy court judge. It has effectively been put on a tight budget, granted access to $80 million of the $115 million financing, and approved $23 million for operating expenses. A restructuring agreement spells out the debtors' involvement and the share of their claims to the reorganized company.

What is happening to Robert Sillerman?

Sillerman is no longer Chief Executive, but remains chairman of the board. His replacement is expected to be named within 90 days.  

Who's running SFX?

Chief Restructuring Officer Michael Katzenstein, managing director of FTI Consulting, is the Interim Chief Executive. The bondholders, who insisted SFX find a replacement for Sillerman, have financial control over the company. Shareholders have been wiped out, and SFX was delisted from the Nasdaq on Wednesday, Feb. 10.

What happens when SFX gets out of bankruptcy?

The entire company could be sold, probably to a private equity firm or, possibly, to a competing promoter. Some subsidiaries (concert promoters) might be sold. First and foremost, the debtors in charge of the restructuring want a successful rebuild that will give them an exit.

Will any festivals be affected by the bankruptcy?

Not according to SFX. The $23 million earmarked for operating expenses is supposed to allow it to continue normal operations unabated.

Wasn't there an SFX years ago?

Yes. Sillerman created a different SFX Entertainment in the '90s. Sillerman owned radio and television stations in the '70s and '80s. Following a change in regulation that allowed for ownership of more than one class of radio station in the same market, Sillerman aggregated stations into what would become SFX Broadcasting, selling to Capstar in 1997 for $1.2 billion. Next, Sillerman took the same approach in buying small and regional concert promoters and built SFX Entertainment, which was sold to Clear Channel in 2000 for $4.4 billion and later spun off and rebranded as Live Nation.  

Wait... isn't EDM dead?

Not a chance. U.S. purchases of the dance genre did fall 16.4 percent in 2015, but a cursory look at the year-end Hot 100 shows EDM, whether artists or producers or overall style, is alive and well.