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SFX share price slips further after problems at TomorrowWorld
By Chris Cooke | Published on Tuesday 29 September 2015
Shares in flagging EDM powerhouse SFX slipped another 12.5% at one point yesterday, and while it wasn’t a great day for stocks in general, that was in no small part because of problems at one of the firm’s big events Stateside this weekend, the third edition of TomorrowWorld, the American spin off of European dance festival Tomorrowland.
Described as an “epic disaster of near-riots and looming lawsuits” by Vice site Thump, the problems at TomorrowWorld were caused by inclement weather, though at least some festival-goers are blaming the event’s promoters for how they responded to the infrastructure issues the rainfall caused.
The biggest problems came on Saturday night after transportation off the boggy site was cut back, making it hard to exit the festival and resulting in some having to give up trying to get home and sleep on the roadside instead. Uber drivers that could get through were, unsurprisingly, operating at a considerable premium. Keen to avoid repeat issues on Sunday, SFX announced that only those already onsite would have access to the final day’s festivities, with non-campers offered refunds on their tickets.
Announcing that decision, organisers said in a statement: “We take the safety of all of our visitors very seriously. The rainfall since Thursday resulted in limited capacity of festival parking fields, drop-off locations, and the shuttle system. Festivalgoers with day tickets, guest list tickets, and anyone not already camping at DreamVille will unfortunately not be able to access today’s events”.
It’s not quite clear how big a financial impact the refunds TomorrowWorld will now have to pay will have on the SFX business, but it will likely affect the company’s third quarter performance. Wash out festivals are nothing new, of course, and live music firms usually prepare for and insure against the extra costs bad weather can cause, but investors are already particularly interested in SFX’s finances, so will be watching these events all the more closely.
The EDM company’s share price has tanked this year, of course, amidst shareholder concerns over founder Robert FX Sillerman’s aborted attempt to take the company back into private ownership, and other concerns about the festival promoter and Beatport owner’s finances. The firm recently secured an extra $90 million in financing while the board continues to consider options for the company’s future.
