The past 24 hours have seen the demise of what was perhaps the last of Australia’s giant touring festivals, with fans later learning that Stereosonic is in fact only on hiatus and will return in 2017.

Initial reports claimed that the festival had been scrapped permanently due to the number of drug deaths and overdoses that took place at last year’s event, including the deaths of 25-year-old Sylvia Choi and 19-year-old Stefan Woodward.

But a statement from organisers Totem Onelove insisted the festival was merely taking a break for 2016 and will be back in 2017. Meanwhile, Stereosonic’s Melbourne office is currently looking for new owners.

So why was Stereosonic actually cancelled? Well, according to the festival’s co-founder and former owner Frank Cotela, it has nothing to do with poor ticket sales or the deaths of Woodward and Choi.

“Interest in dance music in Australia is quite strong,” Frank told triple j’s Hack. “I think it’s been impacted by the financial situation in the US.” Cotela was referring to Totem Onelove’s parent company, SFX Entertainment.

SFX purchased Stereosonic in 2013 for $75 million, adding to its extensive portfolio of EDM events. But the company has been suffering highly publicised financial troubles over the past 12 months.

Back in February, SFX filed for chapter 11 bankruptcy to rid itself of debts of almost AUS$500 million. However, a statement released by Totem Onelove at the time insisted SFX’s financial troubles would not affect Stereosonic.

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Cotela does not think Stereo was cancelled over lacklustre ticket sales and is considering launching his own event, similar to Stereosonic. “I’m thinking about it definitely,” he told Hack. “I’d do things differently but yeah. Watch this space.”

Cotela was also adamant the hiatus has nothing to do with last year’s drug controversy. “Festivals in general have come under the spotlight across Australia and world,” he said. “I don’t think that’s part of it.”

However, Cotela agrees the cancellation of Stereosonic 2016 will have a huge knock-on effect in the Australian music industry. “There’s maybe 60 or 70 slots in every city for Stereosonic – that’s a lot of artists going to be impacted – whether they’re a headliner or a young guy on the start-up stage.”

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