What Happens When Music Festival Creative Directors and Investors Disagree.

Music festivals can be complex business structures and are mostly the creation of individuals who have a creative vision for a live event but lack the funds to execute. Bringing in investors to bank role a festival can secure its future, but what happens when the creative founders and directors clash with investors.

Disagreements between the founding visionary creative directors of a music festival and the investors funding it can be catastrophic for all parties concerned. A serious boardroom battle can impact contractors, artists, festival-goers and sponsors either immediately or soon after an occurrence. Disagreements in these circumstances can cause an operational paralysis often because funding is withdrawn. What are the common disagreements experienced in these situations and how can they be resolved.

The Roles.
Founders of music festivals are often the creative soul of an event; they usually have a vision to create something unique in the market that is different and groundbreaking. Unfortunately, these visionaries rarely have sufficient funds to bring their ideas to fruition and seek investors to bankroll their festival. Sourcing funds has become more critical in recent years as production costs and artist fees have risen way above inflation rates. Investors make decisions based on solid financial records and robust forecasts and do not have the patience to fully understand the creative aspects of a music festival.

Common Disagreements.
Investors will be involved in financial planning of events and can stipulate strict budgetary restrictions, particularly when considering the funds available for talent curation. It is common for investors to insist that the talent budget does not exceed 40% of forecast overall ticket sales revenue. Creative Directors will push for cool new talent whereas investors prefer the commercial safety of bland well know headliners for example. Investors see the importance of improving infrastructure like cleaner toilets and great Wi-Fi service because this is what the festival-goer feedback is telling them. Alternatively, Creative Directors would prefer to spend that money on additional stages or artistic installations. Investors put a high priority on attracting commercial sponsors which can create friction with creatives who may view their festival-goers as counter-culture with resistance to corporate business involvement. Similar disagreements can exist when it comes to data collection which investors see as a key asset of the music festival entity, but creatives view as unnecessary surveillance of attendees.

Immediate Consequences.
Friction between investors and Creative Directors can cause an immediate operational paralysis, especially if funds are instantly frozen. If this is during the planning phase, the festival will have a commitment to pay deposits for booked talent, for example. This can have a knock-on effect on booking agents who may have concerns about the festival's viability, therefore preventing future artist bookings from being made. If disagreements irrevocably break down, it can cause ongoing disputes over the ownership of the music festival entity. It is often the founders who own the ‘creative concept’ of a music festival, but it will be the investors who own trademarks and logos, for example. This tussle over intellectual property ownership can see a festival spiral into eventual liquidation if not mutually resolved. In such cases, a common tactic is for a forthcoming festival to be postponed rather than cancelled, therefore avoiding "Force Majeure" clauses, so ticket holders do not need to be refunded. In these situations, festival-goer confidence in the event can be permanently eroded.

Disagreement Resolution Strategies.
There are a number of common dispute resolution strategies for music festivals when disagreements arise between investors and Creative Directors or founders. Both parties may agree to appoint an interim director who will balance the needs of each party to ensure the event continues to operate. If the relationship looks like being permanently broken, both parties may seek an exit strategy by mutual consent. It is not unusual for original founders to seek a buy-back option where they buy out the disgruntled investor, but this will require them to source a new investor. Another option is to sell the festival entity to a corporate operator like AEG or Live Nation, if they see value in the event, sometimes with a low-ball offer because of existing investor and founder disputes. If disputes are unresolvable, either party could force the entity into liquidation, which is not preferable for anyone involved with the festival. In these cases, it is not uncommon for creative founders to create a new music festival.

For festival organisers planning their next event 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, site planning, cashless payments and contactless ordering.

Image by Antoni Shkraba Studio via Pexels

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