British Trade Organization Calls for Government Action on PledgeMusic
By Jem Aswad
LOS ANGELES (Variety.com) – While PledgeMusic’s long-expected official move into administration — the British equivalent of bankruptcy — was rumored to take place today, instead the deputy CEO of the trade organization UK Music called on the government to take urgent action to investigate the troubled company and prevent a similar situation from happening.
, a direct-to-fan marketplace for musicians, made a long-expected move toward administration in May, owing thousands of musicians money for unfulfilled campaigns. It is estimated to owe between $1 million and $3 million to artists; Variety was the first to report the company’s legal troubles , and in subsequent articles detailed how artists of all stripes were being impacted . The company’s website went offline late last week.
A hearing to wind down the company was held at the Royal Courts of Justice in London today. According to Music Week , in a letter to Business Minister Kelly Tolhurst, UK Music’s Tom Kiehl said, “Many musicians across the UK relied on crowdfunding website PledgeMusic to deliver payments from patrons, to pay for album recordings and other costs. The winding up of this company represents an entirely unsatisfactory development for the many music fans and creators who have invested so much into projects through this scheme.
“I ask you to again consider the merits of a ministerial referral to the Competition and Markets Authority to investigate what went wrong with this case. I would also like to ask you to consider taking up the case with the Financial Conduct Authority, which holds responsibility for regulating certain types of crowdfunding, to consider the activities of PledgeMusic and whether there have been any regulatory breaches.
He concluded, “Furthermore, I would like to ask for a meeting with you to consider further possible Government interventions to ensure the issues which have arisen from PledgeMusic can never happen again.”
A source told Variety in May that artists can apply to become official creditors when administrator is named. 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 — 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.
Led by cofounder Benji Rogers — who left Pledge in 2016 when it was thriving, and returned early this year in an ultimately futile attempt to salvage it — the company was holding out hope that it might find a buyer until last week, when the primary candidate pulled out and administration became inevitable. Sources have told Variety that some questionable business decisions by the management team that succeeded Rogers caused the company to fall into financial peril, from which it never emerged.
