Artist management house the Firm has dropped its lawsuit against entrepreneur and former SFX Entertainment topper Robert F.X. Sillerman and his nascent media venture, FXM.
Under the terms of the deal, the Firm, which reps such hit pop acts as the Backstreet Boys and Limp Bizkit, will buy back a 16% equity stake it sold to Sillerman while he was at the helm of SFX. The cost of the buyback was not revealed, but Sillerman paid $25 million for the stake, according to the Firm’s original suit.
Apologies and then some
In a somewhat bizarre peace offering, the Firm donated an undisclosed sum to the Marine Science Scholarship Fund at Long Island University’s Southampton College, where Sillerman is chancellor, and delivered an unqualified mea culpa for filing the suit in the first place.
“We came to the realization that it was without merit and a mistake,” Firm chairman Jeff Kwatinetz said in a statement. “Bob Sillerman is a true visionary and I am certain we will do business with him in the future.”
The Firm also agreed to cover FXM’s legal expenses in the case.
The Firm filed the suit in L.A. County Superior Court in January, alleging Sillerman had “misappropriated the Firm’s business plan and used his position as a director and shareholder of the Firm to pursue his own interests at the Firm’s expense.”
Sillerman had planned to purchase the Firm for a reported $200 million and merge it with FXM, in an effort to build a one-stop talent-management powerhouse — similar to SFX in the concert promotions business. Last year, Sillerman sold SFX to radio giant Clear Channel Communications for $4 billion.
However, the proposed pact ran afoul of a non-compete agreement between Sillerman and Clear Channel stemming from the SFX deal and was subsequently shelved.
In its suit, the Firm claimed Sillerman intentionally misrepresented his competitive status with Clear Channel, causing the Firm “cruel and unjust hardship in conscious disregard of its rights.”