The planned sale of troubled direct-to-fan music marketplace PledgeMusic has fallen through and the company will go into bankruptcy in the coming days, according to cofounder Benji Rogers.
A letter to artists from Rogers states: “I am sorry to say that the sale process that I have been speaking to you about over these last weeks and months for PledgeMusic was unsuccessful and that the buyers have withdrawn.”
The letter, obtained by Variety, continues:
“I am truly sorry.
I promised to let you know as soon as I had news either way and I received final confirmation of this just now at the board meeting. The company will go into administration [the British equivalent of bankruptcy; Pledge is a U.K.-based company] at some point this week or early next which means that any funds received for the assets of Pledge will be distributed to all of the creditors involved. This will include all of the artists who are owed money.
This was the last thing I wanted, and I am holding out hope of a decent recovery for all of you.
It is not yet certain that the company mentioned in the articles will be the appointed administrator, as it might be someone else, but either way I will let you know as soon as I know, should there be anything specific that you need to do to register as creditors.”
He provides a link to the fan data the company provided.
“I am once again so sorry that we couldn’t pull the sale off and for the harm that this has caused to you all. I really am. Please let me know if there’s anything else that I can do to help.”
Once the company goes into administration, its assets presumably will be sold off to the highest bidders, but it seems unlikely that there will be enough money to cover the entire amount owed to artists, which sources estimate is between $1 million and $3 million — in short, many artists probably never will receive the money that is owed to them. The assets were detailed in a leaked letter from a company that may be its administrator. Variety was the first to report the company’s legal troubles, and in subsequent articles detailed how artists of all stripes were being impacted.
Rogers, who left the company in 2016 (when it was thriving) and returned earlier this year on a volunteer basis in an attempt to salvage it, went into greater detail in a post on Medium, also published Wednesday afternoon.
“I went back into PledgeMusic just over three months ago as a volunteer to try and help the board and team turn around and sell the company, but I am sad to report that this effort has not met with success,” he wrote in part. “I cannot begin to appreciate how all of you affected artists are feeling about this and I am deeply sorry for what you have been through. I ask all of the fans to please understand the awful and near impossible situation that this has put the artists that you love and supported in, and as such I ask you to bear with them as they do their best to make any obligations to you right. I am also sorry for all of the labels, fulfillment companies and other vendors affected.
“I was CEO of PledgeMusic twice, and even though I left for the last time in 2017, I still always felt connected to the company and to the mission. I wanted to be a part of the efforts to get things back on track but it is obvious now that too much damage had already been done.
“I have seen recent media articles criticizing the business model of crowdfunding and I feel that these are unfair. A failure in execution does not mean that the model is fundamentally flawed. I still believe that there is a great future for fan-funded projects in this industry and I hope that someone builds a new version of, or resurrects what we started. I would gladly help in this effort.
He concluded, “Once again, I am truly sorry that it has come to this.”
Last June, Variety broke the news that the company is struggling to pay artists, and its problems have snowballed in recent weeks, with hundreds if not more artists unpaid. While Rogers’ return was greeted with relief by many in the artist community, the company advised all artists to suspend their campaigns shortly after his arrival early this year.