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Beatport To Continue Payments, SFX CEO Says He’s Deeply Embarrassed

After a stir of controversy this past week, Beatport plans to process royalties next week to record labels.

The controversy began when Beatport said that payments to record labels were on hold while the parent company SFX Entertainment was in the process of going private. Just yesterday Resident Advisor claimed that Beatport had paid “trapped” royalties to major labels while leaving independent record labels out of pocket this past quarter.

Beatport says that “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.”

The memo to its label partners also expresses regret for “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.” Robert Sillerman, CEO of SFX, said that he was “deeply embarrassed” by what happened.

Read the full statement below.

A statement from Beatport to our label partners:

It was confirmed today that Beatport's label supplier payments, which have been delayed temporarily via a hold at SFX Entertainment, will be processed next week. 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.

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

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“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.”

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