Australian music news has all week been dominated by the potential collapse of Soundwave Festival and the impending fall out that would be sure to follow.
For those of you living under a rock, festival boss AJ Maddah revealed that the metal juggernaut would not be returning in 2017 or ever again, and that he in fact would close down Soundwave Touring and leave the music industry to look for another job.
The shock decision came after severe backlash from fans on the final lineup announcement, closely followed by headliners Bring Me The Horizon revealing they aren’t 100% committed to performing.
Since then a war of words has erupted between Maddah and Eventopia, the ticket merchant for Soundwave and a subsiduary of industry giant Ticketek built around the concept of DIY ticketing.
“Eventopia were supposed to give SW a scheduled advance to pay deposits to NOFX and BMTH,” Maddah alleged on Twitter. “Their CFO changed her mind and decided not make the advance but didn’t tell anyone. so we (SW & bands) waited and waited for $”
“If they had informed us that scheduled funds were cancelled we could have made other arrangements,” he continued. “So now we are in bad situation. There have been discussions today. I”m waiting on Eventopia/Ticketek to make their decision. We cannot hold festival without their support. As soon as I hear from them, I will let you know.”
Eventopia on the other hand were being relatively coy about the situation, telling alarmed ticket holders that “currently there isn’t anything to be said – tickets remain on-sale and the festival is going ahead”.
They also disagree with Maddah that the festival cannot be held without their support. “We don’t have any say in whether the 2016 festival goes ahead,” a representative wrote online.
But is that entirely truthful, and what does Maddah mean when he says Soundwave relies on Eventopia’s support to continue?
It would appear that the dispute that has brought the festival to a grinding halt is related to an advance payment Soundwave was expecting from Eventopia.
Unbeknownest to most ticket holders, ticketing companies are known to pay out huge cash advances ahead of an event similar to Soundwave so that organisers can use the capital to build and promote the event. Often these payments exceed current ticket sales, and a speculative on the ticketing companies behalf in anticipation of future ticket sales.
It’s a dangerous game, and you don’t need much of an imagination on how that could go very wrong.
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Of course promoters want the money so that they can use it to pay band and contractor deposits, pay for advertising to sell more tickets, and secure venues.
So why do ticketing companies do it? Because of how competitive Australia’s ticketing market is, companies have been known to use cash advances as a carrot to promoters in order to secure what are extremely lucrative contracts.
Soundwave in 2013 sold in excess of 200,000 tickets nationally, so a booking fee of only a few dollars starts adding up to a big pay day for the ticketing company really quickly.
We don’t know how much Soundwave has already received from Eventopia, although we know that when the original Soundwave Festival Pty Ltd was put into administraion earlier this year they had already received $1.9 million in advances from ticket sales.
So if Eventopia had been paying advances to Soundwave, why would their CFO pull the plug as Maddah has alleged? There could be a couple of reasons.
If a ticketing company wasn’t satisfied that ticket sales targets were going to be met, they may not want to pay an advance because they’re not confident enough tickets will be sold in the future to cover it.
Eventopia is also currently embroiled in the collapse of Echo Festival in New Zealand which was due to be held at Vector Arena in Auckland on January 11th and 12th but was cancelled last week due to poor ticket sales.
The situation that has become extremely messy for Eventopia, as it has emerged that they had paid out the ticketing revenue to Echo Festival in advance and the company behind the festival has now gone into liquidation earlier this week.
Now that Echo is in liquidation all remaining funds are frozen, and Eventopia have been caught with their pants down, desperately attempting to get the funds returned so that they refund irate ticket holders – a prospect that looks very dim.
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The fury of ticket holders has been compounded by the fact that tickets sold through Ticketmaster, who it appears didn’t pay out advances, have all been refunded.
So could the huge financial fall out from Echo Festival have an impact on Soundwave? Absolutely.
With Eventopia remaining tight-lipped we can only speculate, although AJ Maddah is currently threatening to release his email correspondence with Eventopia to show ticket holders what’s really been going on.
In the meantime however it isn’t hard to imagine bosses at Eventopia getting cold feet on paying out advances to other promoters after they were left high and dry by Echo Festival.
And without those advances they were expecting to receive, Soundwave has been caught at deadline unable to pay their deposits to NOFX and Bring Me The Horizon, thereby compromising the entire festival.
Only time will tell what Eventopia decide, although they appear to be caught between a rock and a hard place.
If they refuse to pay out any more advances to Soundwave, it may very well bring on the cancellation of the 2016 event and they could find themselves in another situation similar to Echo Festival where they don’t have the money anymore to refund ticket holders.
So it may be true that they don’t have direct control over whether Maddah cancels Soundwave 2016, but when they control the purse strings we’d say they’ll have a pretty big influence.
Update: Eventopia would like to clarify that they had not advanced Soundwave money in excess of ticket receipts and they are not privy to the business deals, operations, or obligations of Soundwave Festival.
