SFX, out of bankruptcy, relaunches under new name with new CEO

Image: SFX owns Australia’s axed Stereosonic festival

After the woes of the last two years during which its ambitious worldwide expansion led to bankruptcy this February with debts of US$345 million, global dance empire SFX is going into 2017 with a different step.

Officially out of bankruptcy on December 2, the company is debt-free and has changed its name to LiveStyle, Inc. It still has the same mission as SFX, to become one of the world’s biggest live entertainment companies.

But the focus has moved to music from just electronic dance music.

It will now be led by President and CEO Randy Phillips, the one time head of one of the world’s biggest promoters AEG. The new management set-up includes execs from the investment, capital raising and media sectors.

Phillips said: “LiveStyle has the same potential that AEG Live had when I assumed the reins of that company as CEO. In fact, it has many more assets to build upon, has an impressive management team, especially at the event level, including most of the original founders of these world-renowned festival brands.

“Armed with no debt, a re-capitalized financial structure, and an incredibly supportive board, we will build LiveStyle into an essential company in the live entertainment sector. Having done this once before, my team and I are very excited to get started.”

During Phillips’ 13-year tenure at AEG Live, he expanded its festivals portfolio with Coachella and the New Orleans Jazz and Heritage Festival.

He introduced the likes of Prince, Santana and Shania Twain to lucrative Las Vegas residencies.

He staged major tours by Bon Jovi, Justin Bieber and Britney Spears.

He also expanded AEG client’s brand appeal by producing documentaries for them. Among them was Michael Jackson’s comeback This Is It tour which he was rehearsing for when the singer died, and which generated the This Is It documentary which grossed $231 million by 2011.

Phillips was initially brought into SFX as a consultant while two of its investors, Allianz SE and Axar Capital Management LP, took over to slash its debt by $400 million.

As he sorted through the SFX mess, Phillips advised that its assets were still valuable even if SFX founder, successful radio and concert mogul Robert F.X. Sillerman, had paid too much for some.

He was then asked to be the company’s CEO, at a salary rumoured to be $2 million.

Phillips has moved the company’s headquarters from New York to Los Angeles. It retains EDM festivals as MADE Events, React, Mysteryland, Spring Awakening, Tomorrowland and Electric Zoo and companies as online store Beatport and ticketing platform Paylogic.

Phillips’ strategy is to shift away from strictly EDM is so that LiveStyle will not repeat the mistakes that Sillerman made after he set up SFX in 2012 just as EDM was bubbling into the mainstream.

His plan was to spend $1 billion in setting up a rival to AEG Live and Live Nation Entertainment. He had hoped to use the huge EDM audience to entice advertisers and corporate sponsors.

But EDM’s close ties with drug culture and inevitable drug overdose deaths spooked the suits.

The finance sector became more alarmed when news emerged that he paid far too much for some of its assets, and growth slowed. It started to sell assets, the share price rapidly went south to 7 cents each, and no one took Sillerman’s takeover offer in early 2015 seriously.

SFX lost $144 million on $249 million revenue for the nine months ended September 2015, and filed for Chapter 11 less than six months later.

The 68-year-old Sillerman quit as CEO in March this year.

By broadening the company’s musical appeal, Phillips hopes to bring back sponsors and advertisers. The plan is to increase gross earnings from $18 million to $50 million in three years.

Given that he thinks that the North American festival market is “very crowded”, expansion will be aimed at growing markets as Asia and Latin America.