A QUICK EXIT FOR FXM? — UPDATE

Robert Sillerman's big-bucks attempt to buy up top-name management firms and create a management colossus has suddenly hit the wall, sources revealed to hitsdailydouble.com. The companies that they were in negotiations with, including HK and The Firm, have been informed the deals are off.

Meanwhile, Sillerman's #2 man in FXM, Howard Tytel, who joined him from SFX, where he was a corporate executive, reportedly stepped down Tuesday (12/12).

Funding for Sillerman's acquisition of HK and The Firm was supposed to take place this week, but after selling SFX to Clear Channel last February in a stock swap worth $4.6 billion, the entrepreneur has apparently run afoul of a non-compete clause that was part of the deal, sources said.

Clear Channel reportedly had a 4% stake in the new company, which Sillerman initially valued at $750 million. Considering that stake, why did Clear Channel put hurdles in front of Sillerman? One possible explanation is that the conglom is concerned that Sillerman's new venture would have been in a position to leverage the concert-promotion company he sold to Clear Channel. Other sources believe that Sillerman may have had trouble raising the funding for the venture. Billionaire Dallas Mavericks owner Mark Cuban had previously been reported by inside.com as a source of financing for the deals.

Sillerman set out to buy up some of the leading management companies in hopes of using their big-name artists as the basis for a new-media play. He was looking at an IPO in January, but no filing with the SEC has yet taken place.

Sillerman representatives could not be reached for comment.

The entrepreneur began his big move into management Nov. 13 by agreeing to purchase management powerhouse The Firm for a reported $200 million. The Firm's clients include Backstreet Boys, Korn, Limp Bizkit, Martin Lawrence, Ice Cube and Michael Jackson.

Sillerman formed his own talent management company, FXM, and as he'd done with promoter SFX, planned to build the company through rapid purchases.

The Firm warned then that the deal had not been closed, and their fears were borne out.

"Contrary to an article that appeared on Inside.com Monday, acquisition of The Firm by Sillerman's new entity has not closed," a spokesman at The Firm told hitsdailydouble.com. earlier this week.

But in a statement released Nov.13, Sillerman said, "The Firm, whose name will not change, will continue to provide the vision and service that its clients and their fans have come to expect. However, they will benefit greatly from the expanded resources FXM will afford them. Over the next few weeks, we look forward to several more major announcements," referring to the other management companies that Sillerman had set his sights on.

"The digital revolution provides a unique opportunity for artists to connect with their fans in new and unprecedented ways," Sillerman said. "We will continue to provide unparalleled service to our clients. Moreover, the resources we expect to bring to bear will add to the opportunities for our clients and their fans alike."

Sources claimed Sillerman was offering six-to-eight-times annual earnings—half in cash, half in stock in his new company—to the management companies he is eyeing. But those figures are being disputed as well, as some claim to have been offered more, insiders said. Terms of any deals, however, were never officially released.