CMJ sued for nearly $1m after failed merger

The 33rd annual CMJ Music Marathon has gotten off to a rocky start this week, as a suit filed in New York State Supreme Court claims CMJ owes a concert promoter $1m.

The case stems from an attempt at a merger between CMJ and New York concert promotion and management company Metropolitan Entertainment in 2009. A lawsuit filed by Metropolitan Entertainment CEO John Scher claims that CMJ has failed to repay nearly $600,000 in loans that were proffered by Scher in 2009 and 2010. Allowing for interest, the debt is close to $800,000, with Scher seeking an addition $99,000 in legal expenses and other fees.

A 2009 article discussing the merger, quoted founder and CEO of CMJ Bobby Haber as saying, “We’re shackin’ up but not officially married yet,” while Scher stated, "Bobby and I have been friends for a long time, and we’ve been talking about this kind of merger for a long time, going back probably 15 years now."

The relationship soured as the merger collapsed.

“We were going to take over a company that was habitually in the red, and make them a considerable payment, and they just decided to ignore that,” Mr. Scher told the New York Times.

While CMJ was valued at approximately $2.4m four years ago, their annual conference is increasingly dwarfed by the more successful SXSW, while their trade magazine has moved online and is struggling in both the college music market – where younger rival publications are routinely touted as tastemakers – and the wider industry sector, which Billboard dominates. This lawsuit could send the company into a tailspin from which it may not recover.