Agents, artists out of pocket after PMF bankruptcy
Booking agencies, artists and management companies are among those owed a combined C$13.2 million (US$9.8m) by Pemberton Music Festival Limited Partnership and 1115666 BC Ltd – the two holding companies behind Canada’s Pemberton Music Festival (PMF), which filed for bankruptcy last week.
PMF, promoted by New Orleans-based Huka Entertainment, entered receivership last Friday after finding itself unable to plug a $10m hole in its finances for 2017. Administrators at Ernst & Young (EY) advised the festival will not be reimbursing those with tickets (as, “with PMF in bankruptcy, it has no ability to provide refunds”), and EY has since directed ticketholders to “contact their bank or credit card issuer directly […] in determining whether a refund can be obtained.”
More than 18,000 people have bought tickets to Pemberton Music Festival 2017, which was to have been headlined by Chance the Rapper, Muse and A Tribe Called Quest. Bankruptcy documents list ticketholders as unsecured creditors, showing they are collectively owed nearly $8.23m.
In addition to the usual smattering of contractors, production companies and the taxman (Canada Revenue Agency [CRA] is owed $1.7m), other unsecured PMF creditors include an agency, two artists, two management companies and performance rights organisation Socan (the Society of Composers, Authors and Music Publishers of Canada).
Toronto-based The Feldman Agency, Canada’s largest independent booking agency, is owed $10,593.75, while WME act Lovecoast – who played PMF in 2015 – are out of pocket a more modest $107.52.
PS Business Management, meanwhile – whose roster has included Arcade Fire, Hot Chip, Tame Impala, Cut Copy and Natasha Bedingfield – is owed $70,007.31, while Burnt Tree Entertainment, which manages several artists but also lists Pemberton Music Festival as a client for its marketing/consulting division, is due $12,168.24.
PMF additionally owes secured creditors $3.6m, who will be be paid in full before unsecured creditors
After CRA and the festival’s ticketholders, Socan, which issues public performances licences, is one of the biggest unsecured creditors, with an outstanding debt of $373,016.
Promoter Huka Productions is also owed $99,762.96, although it is also listed as a debtor to the tune of $349,905.
PMF additionally owes its secured creditors – two companies called 1644609 Alberta Ltd and Janspec Holdings Limited – $3.6m, which would usually be paid in full before any money was reimbursed to unsecured creditors.
Aside from its obligations to creditors, PMF is also facing the threat of legal action from WME, whose head of music, Marc Geiger, has spoken of his intention to pursue the festival’s organisers “to the full extent of the law”.
Speaking to Billboard, Geiger – whose WME agency represents Haim, Ben Harper and several other PMF 2017 performers – says it is investors who must bear the responsibility for the festival’s insolvency – not fans. “This is just gross to me,” he says. “These guys are declaring bankruptcy, but none of them are actually bankrupt. Their shell company is bankrupt. And now they want fans to pay the price.
“That’s not bankruptcy. That’s fraud.”
Get more stories like this in your inbox by signing up for IQ Index, IQ’s free email digest of essential live music industry news.
Axed Pemberton lost “several million” in 3 years
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.”