Money, Music, and Molly

This is also bad news for SFX Entertainment, a new company that profits from media deals and corporate sponsorship of electric dance music. SFX Entertainment intends on making its initial public offer just weeks after these festival related deaths. Could these recent drug deaths threaten the livelihood of electronic festivals and the companies that profit from them?

On September 26, SFX Entertainment announced the terms of their I.P.O. According to their filing with the Securities and Exchange Commission, SFX plans to make their initial public offering of 16.7 million shares just weeks from now. Each share will be priced between $11 and $13. This puts the value of the company at a colossal 1.1 billion dollars.⁵ The I.P.O is part of the company’s plan to raise $300 million, which will go towards establishing and acquiring concert promoters. SFX is making moves in order to contend with Live Nation and AEG, its top competitors. The company has already spent half a billion dollars acquiring numerous electronic music companies including Australian event promoter Totem/OneLove, German festival promoter iMotion, Miami nightclub managers MMG, and even the producer of Electric Zoo Festival, Made Events. However, these recent deaths are causing investors to question the reliability and overall profitability of the electronic dance music industry. In his interview with Forbes, SFX CEO Robert Sillerman slyly avoided questions about the profitability of his company. “The last thing we’ll be thinking about is margins,” Sillerman told the magazine. “That’s not the way I view the entertainment business- I view it as an art, not a science.”⁶

The Context

Many blame this spike in Molly related deaths on the recent resurgence of electronic dance music. After hearing so many references to molly in recent chart topping hits from celebrity artists such as Madonna, Kanye West, Miley Cyrus and many more, one can only wonder if it is a coincidence. These artists have certainly helped molly find its place back in today’s popular culture. However, many experienced festival goers have stated that drug use and the dangers associated with music festivals is nothing new. Their defense lays in the fact that MDMA is one of the least fatal drugs available – the danger of its use mainly lies in immaturity and inexperience. A 2011 BBC report stated that out of 500,000 yearly users, there are only an average of 27 deaths in the U.K attributed to molly overdose. Fans of the genre say that the media is singling them out; that the genre of electronica has no specific correlation with the recent occurrence of overdoses. So the question becomes, are artists influencing the phenomenon or just documenting it?

Undoubtedly, the I.P.O of SFX Entertainment has caused the media to bring extra scrutiny on electronic dance music festivals and the role they may have played in the deaths. “The scrutiny that this is going to come under because of the stock market deal with SFX, it’s like a magnifying glass that’s unfair,” stated manager behind Swedish House Mafia, Amy Thomas. This has put added pressure on SFX to address both the physical and economic safety issues of electronic music. Sillerman stated that he is committed to providing a safe environment at music festivals. He also noted that the electronic music scene has evolved from the rowdy scene of raves to the professional world of corporate sponsored festivals. SFX declared the recent deaths at Electric Zoo as possible “risk factors” in their recent filing with the SEC. SFX plans to acquire ownership interests in Made, which produces Electric Zoo. These consequences relating to drug overdoses may also make it more difficult for SFX to obtain or retain sponsorships, lower consumer demand for their events, and subject the company to liability claims. Profitability and stock prices would take a hit.⁷

Countermeasures

Some have actually used the festival scene as a platform to promote safety and provide health guidance. DanceSafe, a non-profit, which provides educational information about drug-use and its dangers, is working with several festivals such as TomorrowWorld, an Atlanta based festival which partners with SFX. SFX has even appointed a surgeon with experience in “comprehensive medical coverage for large-capacity venues” to its board of directors in an attempt to appease potential investors.

Undoubtedly, festivals will be taking heightened security precautions. Almost all major festivals have to comply with required state law regulations by having first aid tents on site, security searches, and no-tolerance drug policies, but one can only wonder how effective these measures are with the news of so many recent overdoses. However some festivals are already making it very clear that they will be taking their new heightened security measures very seriously. This was apparent at the Boston Calling Festival early September where twenty-one drug related arrests were made. Many festivals and promoters alike are taking the initiative of joining forces with safety organizations, like TomorrowWorld with DanceSafe.

A debate in the dance music world has recently emerged between those who believe that the best way to advocate safety at festivals is recognizing drug-use and those who encourage abstinence.⁸ Believers in acknowledging drug-use feel it allows for open communication, education, and other harm-reduction methods. However many venues will not even entertain this idea, sticking by their strict policies of having zero-tolerance for drugs. These venues simply reject the idea of involving non-profit organizations like DanceSafe, which focuses on education rather than abstinence. This is reasonable when considering the Illicit Drug Anti-Proliferation Act. Passed in 2003, the legislation states that promoters can be fined (up to $250,000) or even arrested if they know about drug-use at their event and do nothing about it.