The collapse of Soundwave has contributed a lengthy chapter to the annals of Australian music industry history. For many, the story of Australia’s biggest heavy music festival will be a cautionary tale.
To ask many industry pundits, Soundwave was undone by a turbulent and increasingly competitive touring market and a struggling local dollar, but also by financial mismanagement and an overly ambitious promoter, founder AJ Maddah.
As we wrote back in January, the collapse of Soundwave could well impact the rest of the Australian touring industry, with Innovation and Better Regulation Minister Victor Dominello concerned by the actions of the companies involved.
“We need to look at some of the failures and there needs to be greater scrutiny of corporations law,” he said. “What distresses me is the number of companies going the insolvency route. We really need to work to get a much better event standard.”
As we now know, none of the bands from Soundwave 2015 were paid and even as the liquidation of Soundwave is wrapped up, it’s unlikely any of the bands will receive what is owed to them, such as Slipknot, who were owed more than $1.5 million.
Leading the pack were Soundgarden who never got paid the $2.1 million they were owed. Also missing out on a big payday were Live Nation with over $1 million, Faith No More with $750k, and Smashing Pumpkins with $1.2 million.
However, according to documents obtained by Tone Deaf, Soundwave was already in dire financial straits before the 2015 festival. According to a circular to creditors from Deloitte, Soundwave’s administrators, the company may have been insolvent as early as April 2014.
“As liquidator of the Company, it is my duty to investigate the demise of the Company,” the circular reads. “My initial analysis revealed indicators of insolvency which suggest the Company may have been insolvent as early as April 2014, following the 2014 Soundwave festival.”
“I confirm that based on my investigations,” the circular continues, “the Company has lodged an insolvent trading [claim]… against the Estate of [AJ Maddah] for a total value of $19,439,182.35. This value is derived from the value of all the unpaid debts incurred by the Company after the date of insolvency.”
In other words, Soundwave was broke after the 2014 festival, which featured a lineup including Green Day, Avenged Sevenfold, and Alice In Chains, and did not technically have the resources to proceed with Soundwave 2015.
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Many suffered in the fallout from Soundwave 2015 and the subsequent collapse of the Soundwave company, like UK band Monuments, who were owed $19k and were forced to take to crowdfunding in the hopes of recouping their losses.
“We aren’t the biggest or best band in the world,” the band wrote. “But we are a very dedicated band that has given 200% of our time and dedication to get our music out there – so for us this is a HUGE amount of money that we do not have and couldn’t have come at a worse time.”
“For a small band like us this is like losing a million dollars… ALL donations will go to helping us pay back our friends and family who loaned us money to get to OZ in the first place but will also help us catch up on other bills.”
