SFX Entertainment Sued by EDM Industry Veterans Over Alleged Deceit

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Over the last four years, SFX Entertainment along with its founder, Robert F.X. Sillerman, has bought up some of the most influential EDM businesses in the industry. This past week, a lawsuit was filed against SFX Entertainment, Mr. Sillerman, and Vice Charman Sheldon Finxel.

The lawsuit was filed by three EDM industry veterans alleging that the entertainment mogul and his associates engaged in fraud amounting to more than $100 million in valued stock and breached contracts they had entered.

The plantiffs include Paolo Moreno, longtime manager to party promoter “Disco Donnie” Estopinal, DJ manager Lawrence Vavra, and Gabriel Moreno, brother to Paolo.

To sum up the lawsuit, the plaintiffs allege that they met with Sillerman in Jan. 2012 to propose a venture that would “identify, acquire, consolidate, and operate assets” in the EDM industry. Sillerman allegedly agreed to “partner” with them, offering to provide financial backing while the plaintiffs used their connections to make seven of the company’s eight key acquisitions. (Read More)

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When I first heard of SFX Entertainment in 2010, it was through rumored whispers of big business buying up EDM from the top down. After some personal research and industry news developments, I would come to find out SFX already purchased famed-promotion company Disco Donnie Presents and had just purchased Dayglow, now Life In Color, in Aug. 2012.

SFX’s acquisitions have been some of the most coveted  in the EDM industry and have created somewhat of an EDM conglomerate. Founder Robert F.X. Sillerman has had past success with an earlier incarnation of the company, which also practiced similar strategic acquisitions.

The previous company was sold by Sillerman to Clear Channel Communications Inc. back in Feb. 2000 for $3.3 billion in stock and the assumption of $1.1 billion in SFX debt. The company is now known as Live Nation, who in Jan. 2010 acquired Ticketmaster in a merger to become a one-stop-shop entertainment company that handle’s ticketing, artist management, and live music.

Some argue Electronic Dance Culture would be better served not being under the control of one conglomerate. However, the exposure Sillerman and SFX Entertainment have brought to EDM is invaluable. The scene was perhaps more exclusive and personal just a few years ago, but commercializing our beloved music was eventual and ultimately will allow the music to reach more people and create more fans for years to come.

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*Below is an SFX Entertainment acquisition timeline which was compiled by the blog Into The AM:

@Kengoallnight