Beatport is ‘very sorry’ for keeping label money – and it’s paying up

Beatport has confirmed that its latest quarterly royalty distributions to labels will be processed next week – with SFX box Robert Sillerman personally apologising for the “deeply embarrassing” and “inexcusable” decision to freeze Q2 payments.

As revealed by MBW on Wednesday (August 5), the digital music platform had postponed its Q2 payments to independent labels, blaming the ‘going private’ process of parent SFX.

In a statement released to labels last night and obtained by MBW, Beatport apologised. It also admitted that it had paid major labels before the royalty freeze was put in place.

The decision to unblock the royalty distributions as early as next week came after intense lobbying from the Association For Electronic Music (AFEM).

The statement from Beatport said: “We deeply regret any hardships this delay has placed on members of the creative community – especially independent labels and artists, who are the lifeblood of electronic music culture and who have been long standing partners and suppliers to Beatport since 2004.

“We are truly sorry this has happened, and that we allowed payment distribution to get caught up in unrelated matters.


“I regret beatport’s delayed payments. The way we handled this was inexcusable… I am deeply embarrassed.”

Robert Sillerman, SFX

While the majority of payments were delayed, some payments were made before the hold went into effect, and those included payments to major labels and some labels participating in the new Beatport streaming service. This was not preferential treatment in any way, but we understand how the optics may illustrate just the opposite.

“Beatport is nothing without creative partners. We remain indelibly committed to serving the electronic music community and providing tools and resources for DJs, producers, and labels around the world to reach their fans and develop their careers.

“Anything that gets in the way of that mission must be dealt with swiftly so we can all get back to focusing on our core goals. To that end we appreciate the assistance of AFEM during the process this week and we look forward to continuing the growth of Beatport in support of the electronic music community.”

Robert F.X. Sillerman, Chairman & CEO, SFX Entertainment said: “I regret that unrelated elements made Beatport delay some payments for the first and only time in its more than 10 year history.

“The way we handled this was inexcusable and should never have happened.

“The thousands of creators who have made Beatport what it is today deserved better, and I am deeply embarrassed, both personally and professionally, by what has happened.”

Mark Lawrence, CEO, AFEM: “It’s been a difficult and delicate few days leading up to this positive outcome.

“I can’t commend Beatport enough for the way in which they have handled the resolution and I am pleased that AFEM was able to support both its member labels and Beatport.”

Robert Sillerman aims to take SFX off the US stock market in the coming weeks by purchasing the shares he doesn’t currently own in the ‘EDM’ specialist.

Sillerman is believed to currently possess around 37.4% of SFX, and a complete buyback will cost him a further $774m.

However, some now question whether Sillerman is able to raise the funds needed to purchase the remaining shares in SFX.

If he can’t, then an asset sale – which may or may not involve Beatport, bought by SFX for $50m in 2013 – would be a possible option to bring down the pricetag of the business.Music Business Worldwide

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