Synergy Global Entertainment, the concert promotion company launched by John Reese, has filed for Chapter 7 bankruptcy protection after a rough 2019.
According to Billboard, the Southern California promoter owes $8.46 million to creditors including WME, Paradigm, and Abe Management USA. With $1 million in assets and $54,000 in the bank, SGE owes most money to vendors, publicists, lawyers, and stage booking companies, including $500,000 to American Express.
The Company Comes to a Crumble
Since the group began 15 years ago, SGE quickly grew into one of North America’s largest festival promotion groups. The company profited $15 million in 2017 and expanded by more than 30% in 2018. A whopping $20 million in sales stemmed from events like Lost Lands and MusInk. For “ticket refunds”, Reese owes about $1.7 million to Front Gate Tickets and an additional $1 million to Groupon. He also has a significant debt of $445,000 to vendor Outer Springs of Anaheim and $227,142 to Rat Sound Systems.
Reese had high hopes of expanding in 2019, but told Billboard he was instead “hit with a perfect storm of adverse marketing conditions.” Problems began to surface in April, continuing with a “massive drop” in ticket sales and a decline in revenue per ticket compared to previous years. A significant loss from the cancellation of the 25-date Disrupt Festival and the Mad Decent Block Party Festival proved otherwise.
Listed as one of the company’s only secure editors is Sumerian Records founder Ash Avildsen, a good friend of Reese. Avildsen loaned Reese $1 million back in June after SGE was hit with a “liquidity crisis” and “needed help.”
“All of his summer events were already booked and on sale so there was no time to do proper due diligence,” Avildsen wrote. “Hence it was a very risky investment but I care about John and the SGE family dearly.”
Reese Reflects his Regret
In a statement on the file, Reese reflected his remorse. “It is with deep sadness and after exhaustive efforts to save the business, SGE is now closed,” he wrote. “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.” You can view the full bankruptcy file here.
With the SGE website now disabled and no employees, it’s unclear what the future holds. We’ll be anxiously waiting to see what concert events will be affected by its foreclosure.