Big Chill bought by Festival Republic

[eFestivals]

Isn't this the tactic AEG tried with Guilfest?

Offer to buy them out, when they don't roll over, go and try and put an event in the same area, crowding out any competition

I'm not sure of all the exact details, but it was something like that.

[Robin Bird]

This is a really interesting discussion - just to add to the majors owning everything gloom, Barfly are owned by the Mama Group who own Love Box, Global Gathering and loads of major London venues such as the Forum etc, etc ...

all true, but unless it's changed hands, Barfly venues aren't a part of a multinational (they were part of Poonana group or something). Mind you, that as a group looks suspiciously like one of those companies that is set up to establish a business, which when established gets sold to a multinational .... but maybe I'm wrong.

[eFestivals]

This is a really interesting discussion - just to add to the majors owning everything gloom, Barfly are owned by the Mama Group who own Love Box, Global Gathering and loads of major London venues such as the Forum etc, etc ...

Ahh, they have changed hands (or I got confused over who their owners were).

However, I think you're wrong about Lovebox - that's owned (or part owned) by Groove Armada. But they do have a tie-in with Barfly of some sort, but I think it's more the 'friendly' sort rather than an ownership one.

And Global Gathering is owned by Angel Music Group, with Live Nation having an amount of ownership.

[Robin Bird]

The definitely are major investors in Lovebox and own Angel Music - as well as a whole host of other stuff

more details here http://www.mamagroup.co.uk/Announcements.aspx

Dean James their managing director is the ex CEO of Mean Fiddler before it was sold to clear channel

I think once you scrape the surface it is amazing how many festivals are owned by majors and it is going to be a really tough few years for the independents.

Ahh, they have changed hands (or I got confused over who their owners were).

However, I think you're wrong about Lovebox - that's owned (or part owned) by Groove Armada. But they do have a tie-in with Barfly of some sort, but I think it's more the 'friendly' sort rather than an ownership one.

And Global Gathering is owned by Angel Music Group, with Live Nation having an amount of ownership.

[eFestivals]

The definitely are major investors in Lovebox and own Angel Music - as well as a whole host of other stuff

more details here http://www.mamagroup.co.uk/Announcements.aspx

Dean James their managing director is the ex CEO of Mean Fiddler before it was sold to clear channel

I think once you scrape the surface it is amazing how many festivals are owned by majors and it is going to be a really tough few years for the independents.

Blimey, you're right.

Those passed me by entirely. I'm particularly surprised that the Angel Music Group thing did. And of course, Angel also own Swansea's Escape into the Park, so that's another one.

Edited September 30, 2009 by eFestivals

[eFestivals]

and just reading thru those docs, MAMA also own the Godskitchen brand, Surfstock, and the Great Escape (which I knew had a Barfly tie-in).

[beamends]

It's interesting to note that the corporates get the "blame" (if that's the right word) for hoovering up all the festivals, and all the quite reasonable concerns that raises, but I do think we should bear in mind the descision to sell is down to the original owners, so any problems cannot be laid soley at the big boys doors. Yes, I know very few people will refuse a nice big cheque (me included), and that sometimes it may even be the only way forward, but a descision to sell means accepting all that goes with it.

[5co77ie]

It's interesting to note that the corporates get the "blame" (if that's the right word) for hoovering up all the festivals, and all the quite reasonable concerns that raises, but I do think we should bear in mind the descision to sell is down to the original owners, so any problems cannot be laid soley at the big boys doors. Yes, I know very few people will refuse a nice big cheque (me included), and that sometimes it may even be the only way forward, but a descision to sell means accepting all that goes with it.

[beamends]

It's not really a question of blame, once the corporates own the festivals, then they can do whatever they like with them. Things to worry about are: lower the number of catering concessions to just their own, only selling their own drink affiliates, only putting their own circle of acts on all the bills (less variation), charging what they like, lack of style over substance, and taking away the nice stuff that doesn't turn a profit.

[Ringo_Spar]

as I said almost everyone will say and do one thing until presented with a large cheque - such is life.

[st00ka]

I'm not sure that anyone can blame a promoter who has spent many a years blood, sweat and tear establishing and running a festival deciding to make some money out of it.

While I think it worrying that so many of the festivals are in the hands of a few companies surely if the quality of these festivals reduces then people will start to look elsewhere and to smaller, better run, more unique events. And just because the corporates have the upper hand at the current moment in time doesn't mean it will always be the case, a change in the law or fashion or appetite for festivals could have a big effect in the future.

Also it seems to me that the tying down of bigger acts to certain festivals just means that smaller festival need to be a bit more creative in getting punters in, surely not a bad thing. After all the BigChill started off with about 500 people and carved itself a niche market and look where it is now. I'm pretty sure that there weren't as many independent festivals in 1995 as there are today.

[5co77ie]

I've just put online an interview with the AIF's vice chair Ben Turner, who alongside lots of toher things talks about Big Chill

http://www.efestivals.co.uk/misc/interview...aif091001.shtml

He also says that he believes Big Chill won't be the only festival to hand over the keys to the corporates in the next 12 months or so.

[BT Rich]

I've just put online an interview with the AIF's vice chair Ben Turner, who alongside lots of toher things talks about Big Chill

http://www.efestivals.co.uk/misc/interview...aif091001.shtml

He also says that he believes Big Chill won't be the only festival to hand over the keys to the corporates in the next 12 months or so.

Edited October 1, 2009 by BT Rich

[Flounder]

But what happens when they have bought up all the big festivals they can? Do you think they will stop there?

Assuming for a moment that Live Nation employs the same tactics to festivals that it did when it was Clear Channel with American Radio stations - then, once it had bought out the commercial radio stations it then went on to buy up Classic, Urban, Hispanic, Country, and even Religious stations - some on AM which do not have sizeable audiences - the creed seemed to be to try an tap into as many markets as possible.

Considering this model once they've bought into pop festivals, they could branch into metal, retro, and even folk festivals. You could say that any festival that attracts a market they don't already have inroads into could be seen as potentially desirable to them, and more than likely size wouldn't be an issue.

Don't forget that Kilimanjaro have/had an interest in Big Green Gathering - no one expected that.

Of course this assumes that the big boys still have the same ethos as they did with US radio - but with music often finding popularity popularity in different genres who knows what might become the next big thing? Whatever this new music direction could be I'm sure the big boys would want a stake in it.

At the moment possibly it's only the fact that there isn't a lot of profit floating about, and there are still the big ones to buy into that could be holding them back.

[eFestivals]

So how does a festival - Big Chill - get to go into liquidation because "the company sold insufficient tickets to cover the cost of the 2009 Big Chill festival", whilst having extra income because "Rights to hold future festivals had been sold to Festival Republic prior to the liquidation", according to the liquidator.

http://www.vantisplc.com/Vantis/News/Chill...liquidation.htm

I'm confused by this.

[Paul ™]

Perhaps the rights of the name Big Chill were sold to FR for a nominal fee, say £1?

Seems a weird one though

[chumpton]

By Paul Gorman

The difficulties faced by parts of the UK festival business have been exposed by the liquidation of Chillfest Ltd, the company that licensed The Big Chill before last month’s takeover by Festival Republic.

At the same time, the impact of festival cancellations on the wider music industry has been highlighted by the continuing rumblings surrounding Brighton’s Beachdown festival, with local record stores taking a possible financial hit as a result of the event’s last-minute cancellation in August (see page 3).

Chillfest Ltd entered into voluntary liquidation last Thursday (October 15) with industry accountancy firm Vantis appointed as liquidator.

It has emerged that the 15-year-old event had been suffering cash-flow problems over the last few years. This was primarily a result of intense competition from more recent arrivals such as Bestival and the huge outlays resulting from the policy of booking big-name headliners such as Leonard Cohen and David Byrne over the last two years.

“That’s a high-risk gambit in a crowded market,” says one industry insider. “The level of ticket sales to sustain such bookings is no longer guaranteed.”

As a result, the festival was increasingly shored up by majority shareholder The Cantaloupe Group, which licenses The Big Chill brand for three venues/bars in London and Bristol.

Last month Cantaloupe made the decision internally to liquidate Chillfest Ltd. “Unfortunately, this has meant that a small number of creditors will not be paid out in full and we very much regret this,” Big Chill co-founder Katrina Larkin explains.

Cantaloupe director Nigel Foster is also on the board – with Larkin – of the new company Big Chill Republic, which has been formed to run the festival. He was unavailable for comment.

It is understood that FR paid just over £500,000 for worldwide rights to the name for a term of 125 years, according to a reliable source.

“That’s knockdown money for an established brand turning over millions every year,” the source adds.

“I had no idea that Chillfest was about to go under when we did the deal a few weeks ago,” says Festival Republic managing director Melvin Benn. “It has come as a surprise.”

Larkin now holds the position of creative director at Festival Republic and is working on next year’s event, which will be held from August 5–8.

Larkin also retains a post at Cantaloupe, which is understood to have been the beneficiary of the amount paid by Festival Republic. In return it will not press for the remainder of its debt, according to another insider.

The implications for the future of The Big Chill record label, run by Eugenie Arrowsmith and whose signings include DJs Tom Middleton and Mr Scruff, are not yet known.

The Big Chill was launched by Larkin and her then-partner Pete Lawrence in 1994. They brought in Cantaloupe as a 50:50 partner in 2002 and on Lawrence’s departure in spring last year the venue operator increased its share to 75%.

Cantaloupe subsequently bailed Chillfest out of the cash-flow problems caused by falling ticket sales, the escalating cost of talent and increased competition.

“It’s not news that this has been an oversaturated market for at least three years,” says Association of Independent Festivals vice chairman Ben Turner, who confirmed that The Big Chill resigned its membership five weeks ago. “There are now 350 festivals held a year, so we are bound to see a process of natural selection. Only well-run businesses with strong brands will survive.”

[st00ka]

So effectively FR have bought the big chill but haven't taken on any of the debts.

[Medina]

Interesting!

It would appear the organisers of The Big Chill have probably got out reasonably intact financially but a number of suppliers will have lost out.

I wonder how keen they will be to do business with The Big Chill again in 2010 when the people who haven't paid them in 2009 are still involved under a different corporate name?

Wasn't that part of the problem with Beachdown? Unpaid bills from 2008 caught up with them in 2009.

[beamends]

So effectively FR have bought the big chill but haven't taken on any of the debts.

[vargos]

The first time the company managing the big chill brand went into liquidation was 1995, the second time in 2002 and now in 2009. On each occasion Katrina Larkin remained a director and the suppliers and the people and families relying on their income lost out.

If they knew that they did not have enough tickets why did they not cancel the event before it took place and not draw other people into their problems?

I am far more concerned about the people who did not get paid and that this sort of unethical business practice stops.

[eFestivals]

The first time the company managing the big chill brand went into liquidation was 1995, the second time in 2002 and now in 2009. On each occasion Katrina Larkin remained a director and the suppliers and the people and families relying on their income lost out.

If they knew that they did not have enough tickets why did they not cancel the event before it took place and not draw other people into their problems?

I am far more concerned about the people who did not get paid and that this sort of unethical business practice stops.

While what you say is the route of most integrity in many ways, things are often not as clear-cut as they'd have to be for that to work.

If they'd have cancelled, they quite possibly would have dropped more contractors in it than they have done by going ahead with the event. After all, a number of contracts would have been agreed and work done on the basis of those contracts by the point they knew they hadn't sold enough tickets for the event to work financially - so it could well be the case that fewer people have suffered a loss by the event going ahead than would have done if it had been cancelled.

There's other festivals that have had similar financial difficulties and bankruptcies over the years, and which have carried on under a new company but with the same people in charge, and while that's not the way that these things should happen in an ideal world, at least one of the examples I'm thinking of wasn't the result of anything fraudulent or even incompetence of any greatness, but what can be quite reasonably considered to be just bad luck.

After all, if a promoter puts the event together with a belief (gained thru experience rather than over-optimistic but unrealistic hopes) that what he's offering should work but it fails to sell the necessary number of tickets for it to be really able to work, that's from one angle just bad luck. Until that promoter tries and fails, how would they know that it won't work? The only way to find out one way or the other for sure is to try.

The only 100% guarantee that can be for the financial side of every person involved would be if events were only run by those with the financial backing to pay for everything up-front without need to call on ticket monies. While that would give greater financial guarantees, it would mean that the market was pretty much controlled by only a handful of rich event companies with it being almost impossible for anyone outside to establish any new events. If that was the case then the likes of (for instance) Glastonbury wouldn't have come to exist along with many others great festivals.

All the same I find it strange that Big Chill failed this year, as it appears to spend less on performers than many other festivals, and looked to have attracted as many people this year as it has in previous years.

[beamends]

<snip>

I am far more concerned about the people who did not get paid and that this sort of unethical business practice stops.

[eFestivals]

You say things are being tightened up - and they might be in some areas - but some things are so slack that it encourages fraud. For example, the Inland Revenue simply write off non-payments of PAYE payments of up-to £100k, essentially giving free reign for companies to set-up, exploit this fact by undercutting competitors or pocketing the money themselves, and then 'fail' the business.

And it's all not helped by the huge reduction in HMRC staff to follow up these sorts of things, where the costs of those cut workers is lower than the money they used to bring in by chasing people for not paying what they should.

Currently, all of the govt systems are far too much slanted to the advantage of businesses and the rich, with the poorest picking up the tab via increased taxes. And it'll get even worse if/when the tories get in, cos as is always the case they're not going to penalise themselves.

[beamends]

You say things are being tightened up - and they might be in some areas - but some things are so slack that it encourages fraud. For example, the Inland Revenue simply write off non-payments of PAYE payments of up-to £100k, essentially giving free reign for companies to set-up, exploit this fact by undercutting competitors or pocketing the money themselves, and then 'fail' the business.