It has come out today that Beatport, the digital music store where many people go to find their favorite electronic tracks, is up for auction. SFX Entertainment, the company that filed for bankruptcy earlier in 2016 announced that they would be putting Beatport up to auction. In the filing for bankruptcy, court documents showed that SFX was not in the financial situation to be able in such an investment. The biggest concern was the fact that, as valuable as something like Beatport is, future investments needed for maintenance of the site would be too costly for the franchise.
For those wondering, that means that the new buyer must prove that when they make a promise to buy Beatport, they must provide the credentials to prove they can afford to spend money on Beatport when necessary, the buyer will keep to their promise and pay what is agreed upon at the date of signing, and they will not release in any way, shape or form the information that customers enter in order to purchase Beatport content.
If you’re interested, here is the link to the 52 page Docket regarding SFX Entertainment Inc. applying for bankruptcy and how that is going to affect Beatport, Inc. This part of the Bankruptcy case will take place March 21st, 2016.
In the document, it states what will happen to each sub-set of SFX Entertainment and Page 5 begins the issue of Beatport, Inc. In March of 2015, Moelis & Company LLC was retained to look into strategic alternatives. The document claims, “With respect to the Beatport Assets, during the engagement, Moelis was in contact with approximately 24 potential buyers, of which 18 executed non-disclosure agreements and performed due diligence, with 3 potential buyers submitting preliminary indications of interest. This engagement concluded in mid-November 2015.” So the search for those buyers has been going on since last year and now is when they are able to start voicing their interests for consideration.
It is also said that, “[Moelis & Company, LLC] and Beatport have been in contact with approximately 18 potential buyers, including certain potential buyers that expressed interest during the Special Committee Engagement. 5 new non-disclosure agreements were executed, and there has been 1 preliminary indication of interest”. The list has increased since then as Moelis & Company, LLC created a list of additional parties interested in Beatport Assets, as per section 363 of the Bankruptcy Code. In other words, as part of the Bankruptcy agreement, the search for sale was not to get rid of the assets but sell them for maximum value.
Here’s hoping that whoever decided to purchase Beatport does not encourage a hike in the prices, since they already sometimes charge more than iTunes for a single.