The Gathering faces crippling debt crisis
The Gathering dance party is in deep financial strife after confusion over ticketing saw big debts incurred at the New Year event in Upper Takaka. Nelson Mail reporter Mariam El Orfi asks, is the party over?
Gathering organiser Murray Kingi is desperately trying to save his New Year's Eve dance party after a mix-up over ticket sales which has put him in a financial crisis.
Mr Kingi says he owes about $200,000 to contractors, performers and crew members who helped run the 72-hour Upper Takaka rave, and does not have the money to pay.
He blamed the crisis on a misunderstanding with the Gathering's ticketing agent, Wellington-based Online Reservations. He said the misunderstanding led him to believe he had sold more tickets to the event than he actually had.
Online Reservations chief executive Teva Loos said Mr Kingi had not contacted him about his concerns. He declined to comment further until he had spoken with Mr Kingi, except to say his company had fulfilled its obligations to the Gathering.
Mr Kingi said some of the debtors had threatened legal action which could force the Gathering, the country's largest dance party and a huge money-spinner for the Nelson region, into liquidation.
Mr Kingi said he was determined to repay his debtors, who were owed between $160 to $30,000 each, and has urged them to stand by him while he sorts out the problem.
"Don't panic, I'm trying my best. I haven't dropped one bit of faith in this party," he said.
Many contractors have already been paid, including one of the event's two security teams and a special effects supplier.
Several people owed money by the Gathering say they support Mr Kingi and are optimistic of getting their money back.
However, at least two companies are angry about not being paid and are considering legal action to recover the $60,000 in total they are owed.
Mr Kingi, the Gathering's sole shareholder, said he got into "financial strife" after information from Online Reservations led him to believe it had sold 12,500 of the 15,000 tickets available to the event, when only 9000 had been sold - a difference in revenue of between $450,000 and $500,000.
The mix-up is centred around a secure website managed by Online Reservations that Mr Kingi used to get instant updates on ticket sales before and during the event, which started on December 31 and ended on January 3.
He said the company led him to believe the website figures stated the number of tickets sold, but he later discovered the figures were for the amount of tickets forwarded to distributors.
"To us it looked like they had sold them. There was a dollar figure and a number. As the party progressed the money looked fine. I didn't notice until the second day of the party that there was a lot less money than I expected."
Mr Kingi said he relied on the website figures to assess how many people were at the Gathering and how much money was available to him.
Thinking he had an extra $400,000 he increased the budget by $200,000 and hired extra camping space, security staff, crew and medical teams and bought more signs, plumbing and sewage equipment to cater for the extra party-goers who never turned up.
After checking the site on January 1 and seeing that 12,400 tickets worth $1.785 million had been sold he felt confident they would be making a $200,000 profit.
"During the event I was none the wiser, it was packed solid. I was convinced there were 12,500 people there."
Mr Kingi said he only discovered he was $200,000 over budget a few days after the Gathering when "the money stopped coming".
He tried unsuccessfully to contact On Line Reservations after the party to get the company to admit liability for the mix-up and repay the $420,000 he lost.
Mr Kingi said the company eventually replied via a fax sent to him on Thursday night after he threatened legal action.
Meanwhile, Mr Kingi is desperately trying to repay his debtors, particularly smaller companies that could be made bankrupt if they are not paid.
He is negotiating with potential investors, sponsors and the Nelson and Tasman councils for funding and is planning fundraising ventures, such as holding mini-Gatherings in the main centres during the year.
He expects to repay some of the debtors within a month.
Nelson Hirequip manager Trevor Tuffnell said the Gathering had already paid him $90,000 for hired equipment but it still owed $30,000.
Mr Tuffnell said the debt was only two days overdue and he expected to be paid. If not he would take legal action.
"I'm quite a supporter of the Gathering... but we're not a charitable institution."
Mr Kingi said none of the five Gatherings had made a profit and, if his company was sued, it would probably be forced into liquidation, leaving debtors with "a pittance" and him bankrupt.
Event worth a billion to Nelson
The Gathering has pumped amost a billion dollars into the Nelson economy and would be a major loss if it disappeared, Nelson's tourism promotion body says.
Gathering organiser Murray Kingi yesterday said the 72-hour Upper Takaka rave was in financial crisis. He said the Gathering owed $200,000 to contractors and crew who helped to run this year's event.
Latitude Nelson chief executive Paul Davis said the party attracted thousands of people to the region and had pumped almost a billion dollars into the local economy in the five years it had been running.
"It would be a major loss if it disappears," he said. He described the rave as an "icon event", rivalled only by the Montana Wearable Arts for its contribution to the region's tourism and business industries.
Caption: Photo MARTIN DE RUYTER GATHERING DEBT: Dance party organiser Murray Kingi at the empty offices of the Gathering in New St, Nelson.