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Is there Financial Value in Defunct Music Festival Brands.

Andy Robertson

With numerous music festivals getting cancelled this year inevitably some with financial problems could go bankrupt. In any downturn there are always opportunities and with some well-known festivals in financial trouble potential investors may be on the look out to acquire a music festival brand.

Putting finance into any music festival is considered a high-risk investment by many but for the adventurous there may be opportunities to acquire a well-known brand at a knock down price. Owners of a festival brand will always inflate the potential value, but investors can often obtain a brand at a reasonable price as long as they conduct sufficient due diligence. What do potential investors need to consider when assessing a defunct music festival brand and where does the potential value lie? 

When a music festival entity collapses financially any assets are usually used to pay off debtors and owners may only retain the intellectual property of the brand. Valuing this can be very difficult because it is an intangible asset. Key considerations in assessing its value will include examining the reputation which may have been damaged if festival-goers were left out of pocket. If the festival closed without any debts there may be value in the audience loyalty, established historical reputation and goodwill. Other considerations may be any merchandising intellectual property and associated licences. Look for historical content that may be included which has revenue earning potential. 

Diamonds in the Rough. 
Whilst many festivals close with ongoing financial issues and debtors some do close in a relatively intact state. A festival with a strong loyal fanbase and brand image may be worth acquiring for its intellectual property and customer data. Any events that retain partnerships with sponsors and location landowners may save considerable time against establishing a new event from scratch. A thorough assessment of the brand’s current and potential value can be made with robust market research. Due diligence should also include assessing any existing legal contracts or agreements. These actions can help identify festival brands with the best potential for a return on investment. 

If an investor intends to relaunch a festival brand they acquired there are some key considerations in doing so. What were the reasons for the brand to cease trading and has this impacted on its reputation possibly making it difficult to shrug off disgruntled suppliers, ticket buyers, staff, artists, sponsors and vendors. For these reasons it is essential to choose carefully when looking to invest in a defunct festival brand, a good purchase will make a future relaunch much easier. 

Alternative Investments. 
Potential investors may be wiser to consider starting a completely new music festival but building a new event and brand from scratch will cost more and take time. Rather than acquiring a defunct festival brand investors could consider helping an existing entity that is struggling financially. This is a common entry route for many potential investors as the festival is already operating but perhaps needs investment in certain aspects like technology, staff and marketing for example. 

For festival organisers planning their events using a software management platform like Festival Pro gives them all the functionality they need manage every aspect of their event 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, ticketing, cashless payments and contactless ordering.

Image by bbolender via Pixabay

Andy Robertson
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