Investing in Music Festivals.
With research on the music festival sector predicting substantial growth in the popularity of music festivals over the next ten years is now a good time to invest in a music festival. Anything related to entertainment and live events has had a history of high risk but with that comes potential high rewards.
As with any investment only consider investing money you're prepared to lose and always do the necessary due diligence taking appropriate financial and legal advice. For anyone interested in investing in a music festival organisation the potential returns can be high but there are ways to minimise that risk, what are the different routes to investing in the music festival sector?
Publicly Listed Companies.
Probably the safest form of investment is to consider publicly listed stocks, the advantage is the financial reporting, transparency and regulatory landscape each listed company must operate in. There are however limited options:
- Live Nation.
- Ticketmaster Entertainment.
These three companies dominate the live events and music festival sectors, the latter two focusing on ticketing. Live Nation alone hosts more than 34,000 live events and music festivals globally every year.
In the private sector there are thousands of music festivals in private hands and as events open up again after the coronavirus pandemic many are open to, or actively seeking, additional investment.
Established Independent Festivals.
Most independent music festivals are privately owned but for investment purposes it’s probably best to focus on the ones that have been around for a long time with an established brand name.
Up and Coming Festivals.
A festival that has perhaps been around for a few years but can demonstrate year on year growth in festival-goer numbers and impressive line-ups may be worth looking at.
To invest in a new festival is probably one of the riskiest investments to make as there is no historical data to analyse. It relies on the reputation of the organisers and producers along with the industry connections they have to make a new event a success.
The music festival sector has attracted its own share of sharks and shadowy characters over the years where ticket money has mysteriously disappeared. However, this has not stopped venture capital investors and business angels from investing in music festivals. Aside from the professional and legal advice potential investors should always seek there are some key aspects to consider when looking at a potential music festival investment.
Organising Team – check the credentials, experience and industry connections the team has and how these can be maintained over time.
Processes and Procedures – does the organising entity have robust processes and procedures in the place to run their event efficiently with accurate and up to date documentation or are they still using pieces of paper to scribble artist contracts on.
Financials – check and verify all financial records and accounts and most importantly check the status of shareholders and other investors. Negotiate and agree favourable terms to get a return on the investment. Understand what any investment will be used for and estimate growth rates.
For any event organiser planning their festival using a software management platform like Festival Pro gives them all the functionality they need manage every aspect of their festival logistics. The guys who are responsible for this software have been in the front line of event management for many years and the features are built from that experience and are performance artists themselves. The Festival Pro platform is easy to use and has comprehensive features with specific modules for managing artists, contractors, venues/stages, vendors, volunteers, sponsors guestlists and ticketing.
The views expressed in this article are not those of Festival Pro and investors should always take professional financial and legal advice before parting with any money. The information on this site is of a general nature. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions.
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