The risky business of music festivals

WATCH: What goes into planning some of the biggest music festivals in the world, from Coachella to Sziget?

Summertime in the music business means one thing: festivals.

But for promoters, the competition to book the best artists — and to draw you to their festival — heats up months before the weather does, and the stakes only get higher for planners as the big show nears. It can be a risky venture for artists, as well, who sign onto joining the lineups of these events, hoping to gain some exposure and a little extra cash.

“The idea of a music festival: great,” said Alan Cross, the spokesperson for upcoming Ontario festival Roxodus. “The logistics of making it happen successfully and profitably: very tough.”

So, what goes into planning some of the biggest festivals in the world (Sziget in Budapest, Rock in Rio, and California’s Coachella, just to name a few)?

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Promoters firstly have to decide who will hit the stage. Headlining artists are the easy picks — these include the biggest names in the business (Ariana Grande headlined this year’s Coachella, and Ed Sheeran is part of Sziget’s lineup later this year). But they also have to bring on B-, C-, and even D-list artists who haven’t hit it big, and industry insiders call these “green bananas.”

“When you sign them, they could be completely unknown or just getting a little buzz,” said Cross, who hosts the podcast Ongoing History of New Music. “But six months, eight months, nine months, 12 months down the road, they’ve broken through and become huge, and therefore, they become a draw.”

One of the most famous examples of a green banana is rapper Cardi B. Before she hit it big, Coachella’s promoters saw the potential for their 2018 festival, and they plucked her from a bunch of other ripening bananas months before the big show.

The festival’s promoters knew they’d cash in big time by bringing her onto their festival lineup, but Cardi B, a newbie in the business when she signed her deal, didn’t know she’d actually lose money by playing Coachella — at least $460,000 of it.

WATCH: Coachella 2019 Highlights

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Coachella 2019 Highlights

In her interview with SiriusXM in April of 2018, she said Coachella paid her $70,000 per weekend, meaning she got paid $140,000 for the two weekends. But the cost of her stage set alone was $600,000.

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“I did not know Coachella was such a big deal like that,” she said. “I have to invest so much money on my stage set that I gotta go to to Wells Fargo and write a cheque. That is crazy.”

Pay is just one factor artists have to consider when joining a festival — sometimes getting there can be one of the biggest challenges, too.

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Some artists, however, travel easier than others. Just ask Canadian EDM duo Loud Luxury, who have played festivals all over the world, from EDC Mexico to Veld in Toronto, their hometown.

“Our biggest strength and weakness as DJs is the fact that we don’t travel with a lot of equipment the way a band would,” said Andrew Fedyk of the duo. “We don’t have a tour bus. We fly everywhere. So, we can do a lot of shows and … play a lot of cities at once … even double up, play two shows in the same day.”

Playing back-to-back shows in one place is a smart move for many artists, but there is something in the festival world that can prevent them from doing this very thing: the radius clause. This is an agreement which prevents artists from playing within a certain “radius” of a festival, sometimes months before and after the event.

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Coachella’s radius clause actually turned into a legal battle. Soul’d Out Music Festival’s founders, Nicholas Harris and Haytham Abdulhadi, approached American singer/songwriter SZA in 2018 to play their festival, Soul’d Out, Billboard reports. But they were turned down because Coachella’s radius clause prevented artists from playing any festival in North America from Dec. 15 to May 1, as well as any concerts in Southern California during the same time.

The two promoters of the Oregon festival also claimed that the funk/soul group Tank and the Bangas had confirmed to play Soul’d Out in 2018, only to later cancel after complications with the festival’s radius clause became an issue.

The men then launched a lawsuit against Goldenvoice, the promoter for Coachella, but an American judge sided with the Goldenvoice attorneys in 2019 and prevented the other promoters from refiling their suit.

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Thousands stranded after bus breakdown at Miami’s Ultra Music Festival

Booking artists for festivals can truly be this fiercely competitive — and all because promoters are trying to make sure their big show is the one you pick.

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The festivals at the top of the ranks, however, usually stay there. In 2017, Coachella crossed the $100-million mark, making it the first time a festival has hit a nine-digit gross.

Festivals can make the most money when things go according to plan, but there are many factors that can make or break an entire event. Promoters have to foot the bill for the space, and they then have to consider other big expenses like garbage, food, sanitation, parking and unexpected weather.

The promoter and founder of one of Canada’s biggest music festivals, Osheaga, says weather is his biggest concern inching closer to his annual event. Rain put a damper on his Montreal festival during its first couple of years in 2006 and 2007.

“People wait … until the day of, and then if it’s nice, then they come,” said Nick Farkas. “I’ve got seven weather apps on my phone. I’ve got connections all over the city to get people to tell me what’s happening.”

Osheaga had only about 25,000 people show up during the first-ever weekend of the event. Last year, that number grew to 135,000, said a spokesperson for Evenko, the festival’s promoter.

Farkas cited a few other numbers to give a clear picture of the “massive logistics” that go into the festival: he employs around 5,000 people, including staff to build six stages.

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While some festivals, like Osheaga, have grown to be successful, not all of them have a happy ending. A prime example would be the infamous Fyre Festival, which will go down as one of the biggest festival flops in history.

Its organizers, Billy McFarland and rapper Ja Rule, had never put together a festival before, and they promised a luxury experience on the beautiful Bahamian islands of Exuma in 2017.

But the entire event crumbled into chaos. Although many people paid tens of thousands of dollars to go, people were forced to camp out in what one person called a “tent city.”

McFarland is currently serving six years behind bars after pleading guilty to defrauding investors in the festival and in a fraudulent ticket-selling scheme after his arrest in the festival scam.

However, Fyre is an extreme example of what can go wrong in the realm of music festivals.

WATCH: Fyre Festival descends into chaos, frustration, leaving rich festival-goers angry (May 2017)

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Fyre Festival descends into chaos, frustration, leaving rich festival-goers angry

Artists now have more of an incentive than ever to do festival gigs. Most people listen to music through streaming services, but artists likely get only a small cut of the revenue. Artists now make the bulk of their money through touring, including festivals.

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“It keeps them working and paid,” said Cross.

And if you’re a budding band or artist, a festival is a chance to perform for people all over the world and get tons of exposure — maybe enough to turn green bananas into yellow ones.

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