Beatport is in a transitional period right now as it changes leadership, attempts to shift focus from just a retailer of electronic music to a streaming service and editorial outlet, while also coping with the turmoil of its parent company SFX. It appeared to be turning the corner having just announced an exclusive partnership with Spotify and on its way to a successful 2015, but now news has emerged that the Denver based company has suspended payments to labels while SFX completes its ongoing privatization process.
An email was sent out to music rights holders yesterday, which was posted online by musician and label owner Morgan Geist, who owns Environ Records.
"Since inception over 10 years ago Beatport has paid almost $200,000,000 to its label partners. Beatport's parent company, SFX, is currently involved in a 'going private' process that has trapped certain earned label payments. This process will be coming to an end in the next few weeks, at which time all payments will be able to be made," the email from Beatport reads.
"Beatport prides itself on being the broadest and original friend of the makers of electronic music and will clear this one time obstacle very shortly. In the meantime, feel free to contact your label manager with any questions. Thank you for your patience and continued support." - The Beatport Team
The mounting backlash against Beatport and SFX may force them to continue payments to labels, despite their mounting financial troubles in the face of an aggressive share buyback plan by chairman and CEO Robert S.X. Sillerman.
The bad new continue to pile up as a judge said a lawsuit filed by three former SFX advisors who claim they are owned $100 million in stock could forward.
