Disrupt Fest, Ozzfest Meets Knotfest Promoter Forced To File For Bankruptcy
The touring market is as much of a gamble as ever. One bad tour and you are done. Take for example Synergy Global Entertainment. Company founter John Reese made his name tour managing for Guns N Roses and then later co-founding the Rockstar Mayhem Fest. In recent years, he worked more with destination festivals like Ozzfest Meets Knotfest and Travis Barker's MusINK festival.
He tried to give the touring market another go with this summer's Disrupt Festival, and, according to Billboard, the returns were so low that it put the company in too big a hole to climb out of.
The company owes about $8.4 million to creditors, according to their bankruptcy filing. They have about $1 million in assets and $54,000 in the bank. The filing showed they brought in $17 million of gross revenue for the last eight months of the year.
Reese told Billboard he was "hit by a perfect storm of adverse market conditions" this year, seeing a “massive drop” in ticket sales and a decline in revenue per ticket compared to previous years. Reese said problems started appearing on the horizon in April, only to worsen through the summer and ultimately become “untenable.”
This was already after Reese canceled Mad Decent festival headlined by Billie Eilish, G-Eazy, Major Lazer and Miguel in Massachusetts due to poor advances.
The company lists Sumerian Records owner Ash Avildsen as their sole secured creditor. Avildsen loaned the company $1 million in June when the promotions company was facing a liquidation crisis. Ash told Billboard "All of his summer events were already booked and on sale so there was no time to do proper due diligence, hence it was a very risky investment but I care about John and the SGE family dearly.”
Billboard has a breakdown of the filing:
According to the filing, SGE mostly owes money to vendors, publicists, lawyers, and staging and rental companies tied to his events, along with about $500,000 to American Express. His biggest creditors are Front Gate Tickets, who he owes about $1.7 million and Groupon, who he owes $1 million, both for "ticket refunds." He also owes $445,000 to concessionaire Outer Springs of Anaheim and $227,142 to Rat Sound Systems of Camarillo.
The filing shows he owes about $180,000 in artist fees to Paradigm and $162,000 to WME. He’s also believed to have an outstanding debt to Sound Talent Group. The full bankruptcy filing can be found here.
Here is Reese's full statement on bankruptcy:
It is with deep regret and after exhaustive efforts to save the business, SGE is now closed.
After 15 years as a successful festival promoter, SGE was hit by a perfect storm of adverse market conditions and a massive drop in ticket sales and RPT (Revenue Per Ticket) since late April of this year compared to historical ticket sales metrics. As a result of these issues, the negative economic impact for SGE became untenable.
After having creative impact in over 45 Festival Brands and Tours in the company’s history, we most appreciate the years of partnerships with fans, artists, brands and vendors”