SFX, MasterCard lock horns as relationship sours

Following the breakdown of its relationship with Viagogo, SFX Entertainment has fallen out with another high-profile brand partner – MasterCard – as it continues its attempts to have its post-bankruptcy reorganisation plan approved by creditors and the courts.

The two companies signed a “multi-year global partnership” in August 2014, with MasterCard becoming a technology partner and “financial services partner” of SFX’s festivals and the EDM promoter “leverag[ing] MasterCard’s innovative technologies for its digital and physical platforms, including ticketing, retail, live events and social networking”.

Now, however, the former partners are at each others’ throats, with each party accusing the other of not holding up their end of the agreement.

New documents filed in the bankruptcy court of Delaware show MasterCard’s lawyer, Joe Khanna, making a claim against SFX for unspecified “damages related to SFX’s breach of the Master Framework Documents”, or the agreements between the two companies, which he notes were included in SFX’s executory contracts (a contract in which neither party has fulfilled its obligations) at the time of its bankruptcy.

“MasterCard – not SFX – has been in breach of the agreement since 31 December 2015 by failing to pay sponsorship fees owed to SFX”

SFX has recognised MasterCard’s claim for “unliquidated and/or contingent claims allegedly accrued for damages as a result of debtor SFX Entertainment, Inc.’s breach of that certain agreement”, but notes the claim is “silent as to how MasterCard believes SFX breached the agreement” and disputes “that such breach ever occurred”.

“To the contrary,” SFX’s chosen law firm, Bayard PA, shoots back, “MasterCard – not SFX – has been in breach of the agreement since 31 December 2015 by failing to pay approximately [redacted] in sponsorship fees owed to SFX.”

Bayard claims MasterCard’s alleged breaches have caused SFX significant to incur significant costs (the exact amount is, again, redacted). “Because the claim is devoid of any evidence suggesting that SFX breached the agreement, and in light of MasterCard’s significant and continuing breaches, the claim must be denied and disallowed in its entirety,” it concludes.

SFX’s motion to dismiss the claim will be heard by long-suffering judge Mary F. Walrath on 9 November.

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