SFX to Auction Off Beatport in May, Looks to Sell Fame House
Beatport was acquired in 2013 for $50 million to be an online platform to reach artists, producers, DJs and EDM fans.
Dance event promoter SFX Entertainment is in negotiations to sell its streaming/download service Beatport, an unsurprising event that will help the debt-laden company pay down its debts. Beatport was acquired in 2013 for $50 million to be an online platform to reach artists, producers, DJs and EDM fans.
According to a court filing, SFX talked with 24 parties that expressed interest, with 18 signing non-disclosure agreements and performing due diligence. Bids on the company, a stalwart in the dance community, are due by April 28 ahead of an auction that will begin with the highest bid received by April 28 and commence in increments of no less than $250,000 in cash or cash and non-cash considerations, on May 3. The court will approve the sale on May 5.
SFX is also looking to sell Fame House, the marketing company it acquired for an undisclosed sum in 2013. SFX’s court filing says creditors no longer view Fame House as “core” to the company’s business. Moelis is marketing Fame House to potential buyers. Founded in 2011, Fame House had Josh Wink, Pretty Lights and DJ Shadow as early clients, according to its website. It now acts as the chief digital agency for SFX properties such as Made Event, ID&T and Beatport.
There are a number of plausible scenarios for Beatport. It could attract a recognizable brand that wants to incorporate a brand into the business, or a private equity firm that would grow and sell or fold Beatport into other acquisitions.
Beatport lost $5.5 million in 2015 as it added a streaming service to diversify the business. That streaming service, which also features live and archived video, could be attractive to a potential buyer since streaming has more potential for a mainstream audience and the download store has a large but limited DJ customer base.