Although an interested buyer continues to circle the troubled direct-to-fan music marketplace PledgeMusic, the company is in pre-administration — the U.K. equivalent of pre-bankruptcy — sources close to the situation confirms to Variety. While the source notes that the company is not yet in administration, it is likely if a buyer does not emerge by the end of this week.
A private email from the “proposed” administrators, the U.K.-based FRP Advisory firm, leaked by Digital Music News, says the company is “seeking expressions of interest in the business and assets of the Group … ahead of an administration process.” A source close to the situation tells Variety that the email may have been leaked by someone attempting to kill the sale of PledgeMusic in order to get a cheaper deal on certain assets.
Reps for Pledge and FRP did not immediately respond to Variety‘s requests for comment.
The letter notes, as has been stated by Pledge, that all projects and campaigns have been suspended and there are no employees on the payroll, although a small number of former employees have remained on-board as consultants. “With the right support and backing, the platform and e-commerce services are available to be switched back on, including the pre-sale, marketing, and distribution digital media, merchandise, memorabilia and exclusive experiences.” Assets include all technical aspects of the platform, infrastructure, trademarks and domain names.
It notes that expressions of interest are being sought by 4 p.m. (GMT) Thursday.
PledgeMusic subsidiary Noisetrade was sold to Paste Media for an undisclosed sum, which brings some money into the company, although clearly not enough to salvage it.
It should be noted that a buyer of PledgeMusic would be taking on the debts owed creditors, which include artists who launched programs with the company and owed money, which is estimated to be as much as $3 million total (here’s a small list of how much certain artists were owed, as of February). As the company has demonstrated in the past, tends to go to the most prominent, or at least the loudest, artists affected.
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. The company is in triage mode: Founder Benji Rogers, who left the company in 2016, returned on a temporary, unpaid basis last month in an effort to stabilize the situation. While his return was greeted with relief by many in the artist community, the company advised all artists to suspend their campaigns shortly after his arrival (many already had). Beyond the recommendation to suspend artist campaigns, the company has not commented on its recent challenges beyond a statement late in January, in which it said, “It is our expectation that payments will be brought current within the next 90 days.”