A consortium of dj booking agencies including WME, AM Only, Windish and Paradigm Talent Agency have agreed to a carve-out agreement with SFX. This agreement effectively allows SFX access to $15 million in funding to pre-pay for dj and music act fees. While a portion of dj fees are pre-paid, it is uncommon to have 100% of the entire fee paid before 5 days of the show as this agreement stipulates.
SFX attorney Dennis Meloro stated in a motion “the value of the debtors’ estates and their ongoing business depends on their continued successful festivals, events and club shows. The profitability of these shows hinges, in significant part, on the artists performing and their ability to attract large numbers of fans. The pool of artists that can reliably attract large numbers of fans to the shows is extremely limited and the vast majority of them are represented by the agents. Thus, the debtors relationship with the agents and their represented artists are vital to a successful reorganization.”
“Since the Petition Date, the Debtors have been negotiating with Agents to ensure that the Artists they represent will continue to perform at SFX’s Shows. The Agents and Artists have required adequate assurance that the Debtors will satisfy their obligations under the Artist Agreements. Without such assurance, the Artists have stated they will refuse to perform at upcoming SFX festivals and the Agents have refused to book Artists for future Shows. The Agents and the Artists have required 100% payment cash in advance of Shows and in certain instances 100% payment prior to permitting the Debtors’ announcement of a particular Artist as part of the line up for a Show.”
“In order to provide the Agents and Artists adequate assurance, the Debtors negotiated with their DIP Lenders to provide a carve-out (the “Operational Carve Out”) for certain postpetition amounts owed by the Debtors to artists, talent agents and credit card processors in an aggregate amount not to exceed $15 million.
“To further provide the Artists and Agents assurance that the Artists will be compensated for their postpetition performances, the Debtors have also agreed to assume the Assumed Agreements, which are Artist Agreements entered into prior to the Petition Date for performances after the Petition Date, and the counterparties to those Assumed Agreements have consented to such assumption”
Talent payment terms:
Festivals and Events (greater than 10,000 capacity):
Headliners Deposits & Payments: Provided that Producer (defined as the Artist-loan out organization which is party to the Artist Agreement), is not in breach of any of Producer’s material obligations and in consideration for Producer’s furnishing the services of Artist’s performance (including, but not limited to: exclusivity of Artist’s performance within a certain geographic area and during a certain time; advertising of the performance (including use of Artist’s name, likeness, and image); solicitation of sponsorships and ticket sales based upon Artist’s name, likeness, and image, and personal performance at the contracted-for engagement) (collectively, the “Event”), Company shall pay the fee owed to Producer for Artist’s performance (the “Guarantee”) as follows: 25% before announcement of the lineup; 50% thirty (30) days before the Event Date (herein defined as the date on which the Festival or similar Event commences), and 25% not less than five (5) business days prior to the Event Date.
Non-Headliners Deposits & Payments:
Provided that Producer is not in breach of any of Producer’s material obligations and in consideration for Producer furnishing the services of Artist’s performance (including, but not limited to: exclusivity of Artist’s performance within a certain geographic area and during a certain time; advertising of the performance (including use of Artist’s name, likeness, and image); solicitation of sponsorships and ticket sales based upon Artist’s name, likeness, and image, and personal performance at the contracted-for engagement) (collectively, the “Event”), Company shall pay the fee owed to Producer for Artist’s performance (the “Guarantee”) as follows: 15% before announcement of the lineup; 40% thirty (30) days before the Event Date, and 45% not less than five (5) business days prior to the Event Date.
Events (for venues of 10,000 capacity or less) or Club Shows:
Deposits & Payments:
Provided that Producer is not in breach of any of Producer’s material obligations and in consideration for Producer’s furnishing the services of Artist’s performance (including, but not limited to: exclusivity of Artist’s performance within a certain geographic area and during a certain time; advertising of the performance (including use of Artist’s name, likeness, and image); solicitation of sponsorships and ticket sales based upon Artist’s name, likeness, and image, and personal performance at the contracted-for engagement) (collectively, the “Event”), Company shall pay the fee owed to Producer for Artist’s performance (the “Guarantee”) as follows: 20% before announcement of the lineup; 40% thirty (30) days before the Event Date, and 40% not less than five (5) business days prior to the Event Date.
SFX artist carve-out agreement – dj fees by EDM Life
