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Huka Entertainment's now-cancelled Pemberton Music Festival owes creditors $2.5m after incurring significant losses every year since its debut in 2014
By Jon Chapple on 22 May 2017
Canada’s Pemberton Music Festival, which filed for bankruptcy on Friday, has burned through “several million” US dollars in cash losses since its debut three years ago, according to administrator Ernst & Young (EY).
Pemberton Music Festival (PMF), which was revived by Huka Entertainment in 2014 after a one-off outing with Live Nation in 2008, was the biggest music festival in British Columbia, attracting close to 180,000 attendees last summer.
Despite increasing revenue from ticket sales ~100% year on year from 2014 to 2015 – US$5.8m to $10.3m – and a further $5m in 2016, revenue to date for 2017 is just $8.23m (against expenses of $22m), and festival operating companies Pemberton Music Festival Limited Partnership and General Partner, 1115666 BC Ltd now owe creditors approximately $2.5m.
PMF also incurred “significant losses” from 2014 to 2016, bankruptcy filings reveal.
The festival’s bankruptcy is attributed to the relative weakness of the Canadian dollar to its US counterpart – which doesn’t bode well for UK festivals faced with a slumping pound sterling – as well as difficulties in sourcing talent “due to a limited number of artists touring in 2017”. Acts booked for 2017 included Chance the Rapper, Muse, A Tribe Called Quest, Haim, Major Lazer, Diplo, Run the Jewels and MGMT.
“We are extremely disappointed for our fans, artists and all of our partners who have supported the festival over the years”
The cash shortfall for 2017 was expected to exceed $10m, with “no certainty of cash available” to fill the hole in the festival’s finances, says EY.
The more than 18,000 people who had already bought tickets for the event will not receive automatic refunds – as, “with PMF in bankruptcy, it has no ability to provide refunds for tickets purchased” – although ticketholders may file a proof-of-claim form with EY as unsecured creditors.
A statement from Huka, which will continue to promote Tortuga Music Festival in Florida, makes it clear it was PMF’s directors who made the decision to file for bankruptcy. “For the past four years Huka Entertainment has worked to create a one-of-a-kind experience in the most beautiful place on earth,” it reads. “We are heartbroken to see the 2017 Pemberton Music Festival cancelled.
“As a contract producer, Huka did not make the decision to cancel the festival. That decision was made by the Pemberton Music Festival LP. We are extremely disappointed for our fans, artists and all of our partners who have supported the festival over the years.”
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