The large festival business, once an opportunity for entrepreneurs to enter the game, has become increasingly devoid of independent players as as the live music business shifts to tours bankrolled by global promoters.
Live Nation’s acquisition of a controlling interest in the massive Bonnaroo Music & Arts Festival in Manchester, Tenn., from founders AC Entertainment and Superfly continues the global concert firm’s aggressively acquisitive streak in the U.S. festival space, and at the same time eliminates the "independent" status of what was the largest independent music festival on the continent.
The move was a bit of a shocker, but less so after the firm’s $125 million move late last year to acquire a 51 percent stake in thriving Austin-based promoter C3 Presents, at that time the U.S.’ leading indie. Live Nation and rival promoter AEG Live, along with EDM promoter SFX, have been snapping up festivals at a steady pace, a gold rush in what remains the music industry’s most competitive space.
Live Nation has been the most active of late, and the world’s largest promoter has raised its festival presence in the U.S. exponentially in the process. The ongoing success of both Bonnaroo and C3 made them ripe targets -- Bonnaroo is a perennial sellout, with more than 80,000 in annual attendance and gross receipts estimated at $25 million, and C3 was the leading independent, with global brands in Lollapalooza and the ACL Music Fest, among others.
Both C3 and the Bonnaroo producers say that selling out offers them the opportunity to grow their festivals, and serves as a return on the sweat equity (and literal equity) they’ve poured into building their events. In the case of both C3 and Bonnaroo (along with another key festival space acquisition, Insomniac Events, in 2013), Live Nation CEO Michael Rapino promised autonomy to those acquired, vowing to let the festivals’ producers continue to do what they do. Superfly partner/co-founder Rick Farman says Rapino has done "a fantastic job with... entrepreneurs of creating a dynamic where we’ll be empowered to go on as their partner, take this thing to the next level."
As the only publicly-traded live music company, Live Nation aims to show Wall Street it is a force in this robust space, and Bonnaroo, which Rapino calls, "another crown jewel in this festival channel strategy," definitely sends that message home. Live Nation now has more than 60 festivals in its portfolio of European and North American events, including U.S. events like Lollapalooza, ACL Fest, Electric Daisy Carnival, an exploding country music fest roster that will have at least seven events in 2016, and, now, Bonnaroo.
Privately-held AEG Live, the world’s second largest promoter, has also been on a festival shopping spree, with a portfolio of 27 festivals that includes the highest-grossing fest in the world, Coachella (through its Goldenvoice division), and the pioneer in the space with the New Orleans Jazz & Heritage Festival. AEG Live chairman Jay Marciano has focused on investing in businesses that, unlike tours, create sustainable revenue, and has doubled down on festivals, which Marciano believes will "continue to explode in North America." In 2015, AEG Live acquired the Firefly festival in Dover, Del., then subsequently launched the Big Barrel country fest for that site this year with the Firefly partners; the Hangout festival in Gulf Shores, Ala.; and event production/promotion firm Madison House, co-producers of the Grateful Dead Fare Thee Well megaconcerts. Other successful events in the AEG stable include Stagecoach, thrown on the Coachella site in Indio, Calif., Electric Forest in Rothbury, Mich., and Country Superfests in Baton Rouge, La., Jacksonville, Fla., and Columbus, Ohio, the latter to bow this year. Marciano expects AEG Live will launch "several more" festivals in 2016.
As all of this unfolds, the festival landscape has changed greatly since its early days, when Coachella and Bonnaroo shook up the doldrums of a post-consolidation touring industry. At the time festivals were a place where ambitious, savvy talent buyers could develop a business without having to build an amphitheater, or trying to outbid the giants on arena tours. Goldenvoice, C3, and Superfly and AC Entertainment were the risk-taking trailblazers in this world, and now all three are part of bigger players.
It’s a shift few would have predicted back in 2002, when Red Light Management founder Coran Capshaw -- as it turned out, presciently -- bankrolled a neo-hippie throwdown in the rolling fields of rural Tennessee. "It’s important to remember that almost no one thought [Bonnaroo] was a good idea at the time," AC Entertainment founder Ashley Capps says. "A lot of people thought we were crazy. So when you see how not only our festival but the festival scene in the United States has evolved during this decade-and-a-half, that has been an incredible validation. It’s an exciting wave to be riding, and I think in many ways it’s still in its early stages."
It is worth noting that both Superfly and AC Entertainment remain independent festival producers outside of Bonnaroo. Among their ventures are Superfly’s Outside Lands fest in San Francisco with Another Planet Entertainment, and AC’s Forecastle fest in Louisville, Ky. The Live Nation/Bonnaroo deal "doesn’t impact [these events] in a structural way at all," Capps says. "Live Nation is not buying AC or Superfly. But I think we all are looking forward to developing this relationship, and I know we all look forward to exploring what the future may hold."
Along with Outside Lands, Governor’s Ball on Randall’s Island in New York City, owned and operated by Tom Russell, Jordan Wolowitz, and Yoni Reisman, now looms as the highest-profile major contemporary festival in the U.S. Asked his reaction to the Bonnaroo sale, Wolowitz tells Billboard he is "very happy for my friends at Superfly and AC, who are entering into a great partnership with Michael and his team at Live Nation. Producing a major festival is an intense risk and reward, and the risk takers deserve all the success they achieve."
Indeed, the Governors Ball team is not immune to the attractions of a deep-pocketed backer, having themselves partnered with Live Nation’s country music division on the launch of FarmBorough, New York’s first country music festival set for June 26-28 on the Governors Ball site. For now, Governors Ball remains happily independent as it tees up its fifth edition June 5-7, but Wolowitz does not rule out the possibility of a deal down the line.
"My partners and I are all 31 years old," Wolowitz points out. "We have a lot of goals and things we want to achieve in this business. Perhaps that means taking on a partner that would give us the resources to grow. Perhaps it means we keep our heads down and remain independent. Whatever happens, we'll make the best decision for Founders."
Farman believes the festival market is still open enough that an independent could launch a new event just as Superfly and AC did in2002. "I think you will always have innovators in this space," he says. "Superfly and AC stay independent companies and, as independent companies, absolutely believe that there’s plenty of new opportunities directly in the festival space and around the edges of the live experience, in general."
An edited version of this article first appeared in the May 9 issue of Billboard.