Gathering Debt$ by the truckload
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SHADES of Sweetwaters!
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.
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 blames the crisis on a misunderstanding with the Gathering's ticketing agent, Wellington-based Online Reservations. He says 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 Kingi had not contacted him about his concerns. He declined to comment further until he had spoken with Kingi, except to say his company had fulfilled its obligations to the Gathering.
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.
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 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.
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 centered around a secure website managed by Online Reservations that 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 says 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 were dollar figures 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."
Kingi says 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."
Kingi says 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 Online Reservations after the party to get the company to admit liability for the mix-up and repay the $420,000 he lost. Kingi said the company eventually replied via a fax sent to him on Thursday night after he threatened legal action.
Manwhile, Kingi says he 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. 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."
Kingi says none of the five Gatherings had made a profit and, if his company is sued, it will probably be forced into liquidation, leaving debtors with "a pittance" and him bankrupt.