Power’s Festivals Need More Cash
Sluggish ticket sales at Spain’s Benicassim Festival and the UK’s Hop Farm Festival have led to Vince Power’s publicly traded Music Festivals PLC issuing a profit warning and beginning a search for more cash.
Music Festivals, which raised £6.5 million by floating on the Alternative Investment Market in July 2011, previously warned that both festivals were suffering from slow sales, causing the group’s share price to fall 3.5 pence to 42.5 pence. The initial public offering was 65 pence per share.
As news of the disappointing crowd figures at Hop Farm and Benicassim has filtered through, the stock has tumbled and on Aug. 6 was trading at less than 5 pence – or down about 95 percent since going public.
CMU says that Power, who pocketed £13 million when he sold Mean Fiddler Music Group to Live Nation and Irish promoter Denis Desmond in 2005, has loaned the company £750,000 (nearly $1.2 million) to use as working capital.
Shareholders have been told that this year the company will make “a material loss” and is “exploring ways of raising additional working capital.”
Power hadn’t responded to a request for comment at press time.
Despite the warning of smaller crowds, local factors meant the box office returns in the UK and Spain were both lower than expected.
Power believed Hop Farm was so damaged by the BBC’s free-admission Hackney Weekend that he wrote to director-general Mark Thompson to complain that the corporation was using taxpayer money to subsidise festivals that threaten the business of commercial event organisers.
The criticism was later echoed by Isle Of Wight promoter John Giddings and Mama Group chief exec Dean James, who described the BBC event as being as welcome as “a fart in a space suit.”
In Spain, it seems the local economy’s struggles and a competing festival the same weekend cut down on the attendance, as Benicassim’s average daily crowd figure fell from 50,000 to 40,000, just enough for it to hold onto its position as the country’s largest festival.
The problem was that Spanish sales were less than 30 percent of the total, compared with last year’s 45 percent.
BBK Live, which ran over the same weekend as Benicassim, attracted 36,400 daily. BBK Live, which is run by Last Tour International and takes place at Kobetamendi, improved 30 percent on the 25,573 attendance in 2011.