At about noon on the second day of TBD Fest 2015, as the first of some 20,000 fans entered West Sacramento’s dusty waterfront to watch the local DJ crew Sleepwalkers, a staggering panic fell over the festival’s founders.
Booking agents representing Porter Robinson and Cut Copy demanded an up-front cash payment before the musicians took the stage. Without the advance, representatives for the bands threatened to cancel the performance.
TBD Fest co-founder Michael Hargis, who had spent the last few years investing everything he had in the event, frantically sought an explanation for why a $300,000 wire payment from a festival investor hadn’t yet materialized, leaving Hargis unable to pay the talent.
As word spread of the missing payment, Hargis’ phone erupted with concerned calls from agents representing every major act on the lineup. If the money didn’t appear soon, Hargis worried the entire three-day festival would shut down.
“All hell is breaking loose,” Hargis recalls in an interview nearly two years afterward. “All the artists were going to walk out. My controller is in the fetal position crying … I’m trying to calm everyone down.’”
In the eleventh hour, Hargis says, the payment cleared and the show went on. But the episode only marked the beginning of TBD Fest’s financial trouble: Complaints from unpaid vendors and artists grew into lawsuits, and once news of the litigation hit the Sacramento Bee, investors pulled out. Hargis realized that TBD Fest wouldn’t return the following year.
In the dark, winter months following the September festival, Hargis says the bad publicity and finger-pointing literally made him sick: The promoter was hospitalized three times for stress-related illness. The first episode occurred at Lowbrau, the Midtown beer hall owned by Hargis.
“My left side of my body went numb twice and I thought I was having a heart-attack or a stroke,” he says.
After losing an undisclosed sum both years, TBD Fest (otherwise known as The Bridge District Festival) has incurred blame from investors and rival music promoters for being underfunded. General consensus is that if a festival can’t pay for its talent before selling a single ticket, it’s under-capitalized.
The Sacramento festival was a gamble for sure. TBD Fest started as Launch Festival in 2009, an avant-garde art party and fashion show that brought about 750 people to the Greens Hotel on Del Paso Boulevard. The event expanded each year, ultimately culminating in a day-long music festival drawing several thousand fans to Cesar Chavez Park. But the ambitious growth also triggered annual losses. The conversion to the three-day TBD Fest was a Hail Mary by Hargis to magnetize fans from outside California and investors who could stomach some initial debt.
Over its two-year run, the concert was also a valentine to Sacramento. With its genre-stretching musical lineup, artisan chef competitions, octopus tacos, acroyoga sessions and laser cube art installations, TBD Fest marked a cultural homecoming for the California region that had suffered the hardest economic hit during the Great Recession.
Memories of its aftermath still trigger in Hargis a low-grade post-traumatic stress. The promoter’s email inbox remains an albatross of unresolved concert-related issues, and Hargis says he’s still paying debts from his personal banking account.
The festival’s other co-founder, Clay Nutting, has cut all business ties with Hargis and declines to speak publicly about the festival. Hargis also abstains from any mention of Nutting.
‘The People are Hungry’
Yet the beat goes on. Sacramento Mayor Darrell Steinberg has marshalled conversations with executives from the Sacramento Kings and Live Nation, the world’s largest concert promoter, about hosting more concerts and festivals in the city. The Sacramento City Council recently cobbled over $20 million into a “Destination Sacramento” tourism fund that otherwise would have been spent on upgrades to the Sacramento Convention Center — but could help subsidize another festival.
“The people are hungry,” Steinberg says. “Music festivals are a key piece of our Destination Sacramento strategy.”
The City’s job is to hone expectations for the kind of festival that would work in Sacramento and the potential economic benefits. TBD Fest cost $3 million for each of its two years, and though it lost money, the concert sold 13,000 tickets the first year and 20,500 the second. Hargis says the event was on course for a three-year plan to profitability before its investors soured.
To be clear, TBD Fest also suffered from underperforming ticket and concession sales, and a dearth of sponsors. But what may get lost in the local lore of West Sacramento’s departed riverbank party is the chronic frequency of other music festivals slipping into the red during their startup years.
A festival that loses money before going dark is common and different from the borderline scam that was Fyre Festival (the notorious Bahamas disaster that sold wealthy millennials on a lavish island rave but ended like Jurassic Park without the dinosaurs). Consider that the Coachella Valley Music and Arts Festival — the world’s top-grossing annual music festival — also faced a rough start, losing nearly $1 million its first year.
Coachella Nearly Died
In the early years of Coachella, headlining bands and festival employees had to accept IOUs. The festival was postponed after its inaugural year in 1999 and didn’t turn a profit until its third year.
The sun-baked concert in Indio now sells out in hours, before even announcing its lineup. Coachella brought in revenue of $94 million last year, up $10 million from 2015, according to Billboard Boxscore.
Closer to home, Napa’s 2017 Bottlerock sold all its three-day passes in a single day. But the event’s grand opening in 2013 was far rockier: In its first year, Bottlerock missed a deadline on its payment to the City of Napa for municipal services, and unpaid vendors went public with their grievances.
The concert left Napa’s city officials with mixed emotions, however, because hotel taxes — a city’s primary indicator for tourism health — rose by 13.7 percent that year. Bottlerock’s second year saw hotel taxes spike another 28 percent, says Robin Klingbeil, a senior staffer with the City of Napa.
Bottlerock promoter Latitude 38 signed a decade-long deal with Napa Valley Expo, in downtown Napa where the festival is housed, last year. “It seems like it has a long-term home here, which would be great,” Klingbeil says.
When Botterock’s headliner ends at 10 p.m. each night, revelers spill out into the streets. The local food and entertainment industry has gradually built up an entire festivity week around Bottlerock, with hotels and concert halls featuring pre-shows and after-parties.
Three Days of Peace and Profits
While civilization’s earliest music festivals trace back to ancient Greek competitions in sixth century B.C., the Newport Jazz Festival of 1954 is credited with launching the modern festival movement in the U.S. Billie Holiday and Dizzy Gillespie topped the ticket.
In the late 1960s, subdued jazz crowds were replaced by longhairs at the Monterey Pop Festival and Woodstock. Some 400,000 people showed up for the “Three Days of Peace and Music” in 1969. Contrast that with Coachella’s total attendance this year of 125,000.
But it was perhaps the glitterati of Coachella that launched festivals into a prevailing millennial pastime, as the event incrementally transitioned from, in the words of the Indio Police Department, a “very well-behaved crowd” of about 20,000 indie fans gathering in 1999, into the world’s most sought-after selfie background, featuring global pop talent and a sponsored H&M clothing line.
One in 10 Americans attend at least one music festival each year, according to Nielsen’s Audience Insight Report. About 15 million, or half, of those attendees are millennials, the most targeted demographic for marketers. While promoters warn the festival bubble will inevitably pop and whittle down the number of festivals, they also argue that quality attractions — those that showcase local flavor and offer other amenities to keep outsiders flocking back — shall endure.
“A lot of new festivals in recent years have been brought into the marketplace — there is an impact of that. You will see lots of shifting sand,” says Rick Farman, co-founder of Superfly, a promotion company that jointly produces Outside Lands in San Francisco with Another Planet Entertainment.
“At the same time, I think there is more awareness of the value of a fun and engaging entertainment experience,” he says. “You have to be smart and calculated and careful about where the festivals are.”
It’s no wonder that U.S. cities are racing to bring a slice home. Economic impact reports for major music festivals dissect things like attendee spending and travel patterns, but to sum up the long-term value for any city: “It’s exposure,” explains Mike Testa of Visit Sacramento, the City’s tourism bureau.
Festivals bump “the cool factor” of cities like Austin or Portland, Testa argues. When people see The Weeknd and Muse headlining a festival in Dover, Del. (that actually happened in June, at Firefly Music Festival) they presume the city has more to offer.
Here’s how it works: A festival might draw 10,000 people from outside California. One guy in the crowd lives in Kentucky and also sits on the board of his regional bird watcher’s association. Years later, when Sacramento is floated to host the annual convention of the American Birding Association, the Kentucky guy jumps out of his seat and shouts, Let’s do Sacramento. That place is cool!
“There are lots of reasons to visit a city, and the more you know about a city the more inclined you are to use one of those reasons to visit it,” Testa says.
Speaking directly about Sacramento, Testa has reached the same conclusion as music promoters: A sustainable festival needs a venue and committed investors. If the Destination Sacramento fund is partnered with big talent drawn in by the Kings and Live Nation, then finding festival grounds remains the only missing piece.
Mark Friedman, the wealthy developer who owns The Barn in West Sacramento and helped bankroll TBD Fest, says he would be willing to once again commit his bridge district acreage following “assurances [the concert] was well-managed and well-financed,” he says.
But Hargis of TBD Fest argues the dirt lot was not ideal for its propensity to radiate heat and kick up dust. A 20,000-seat soccer stadium at the historic railyard is one possibility, but that project is uncertain until Major League Soccer makes a decision on its league expansion.
The recently approved infrastructural renovations to Sacramento’s downtown theater district at K and 13th streets are set to include an outdoor amphitheater, but the space couldn’t easily accommodate 20,000 or more attendees, Testa says.
Each year, over 20,000 metal-heads descend on Sacramento’s Discovery Park for the Aftershock hard rock festival. Danny Hayes, CEO of Danny Wimmer Presents, the promotion company behind Aftershock, believes he can grow the event from the current 23,000 daily attendees over two-days to 40,000 dailies over three days, as well as introduce a new country or indie festival in Sacramento.
But due to noise concerns from nearby residents, “There is no way the Discovery Park community would let us do that right now. It’s a shame,” Hayes says. “We told the City we are more than happy to replace TBD.”
Danny Wimmer Presents boasts that it is “the largest independent producer of destination festivals in the country.” The company has taken a measured path to growth, partnering with global entertainment company AEG for years before breaking out on its own, meaning the company can access the sturdy corporate cushion needed to sustain a festival.
But Danny Wimmer Presents is based in Los Angeles. While the company has worked to cater its festivals around local tastes — Aftershock promotes farm-to-fork concessionaires and aspires to add an onsite farmers market with help from Visit Sacramento — there is a distinction with TBD Fest that Hargis hopes isn’t lost on Sacramento music fans.
It’s the perennial conundrum of rock ‘n’ roll: Is the art betrayed or the experience diluted when the dominant producers are well-heeled outsiders decoding “the cool factor” to ensure profitability?
Hargis did not perform market research for TBD Fest or Launch. He says his small production team “bit off more than they could chew” each year before crossing their fingers that enough fans would back them. Though Hargis owns and operates a busy bar in a swanky neighborhood, as an art and music promoter he has repeatedly demonstrated a willingness to put passion before anything else. In 2011, for example, he sold his couch to pay a band that played at Launch.
He also recognizes that purism has its limits. “A Live Nation or AEG can throw a festival, but it won’t have the same cultural impact as Launch or TBD,” he says. But speaking about outside investment, he adds, “We learned along the way that we needed that help.”
To brighten his mood, Hargis occasionally plays the video of Cut Copy playing that second night of TBD Fest 2015. The promoter relishes watching a sea of smiles in the colorful mini-city he spent years composing.
“In that small moment, the despair, the discouragement, the hurt is wiped away and I get to see what is possible for this city,” he says. “There is no better high. There is no better enjoyment.”