REPORTS: What’s the Big Deal About the Fyre Festival?

Fyre Festival was a “luxury music festival” created with the intent of promoting the Fyre music booking app. It was scheduled to take place April 28–30 and May 5–7, 2017, on the Bahamian island of Great Exuma.

The event was promoted on Instagram by “social media influencers” including socialite and model Kendall Jenner, model Bella Hadid, model and actress Emily Ratajkowski, and other media personalities, many of whom did not initially disclose they had been paid to do so. During the Fyre Festival’s inaugural weekend, the event experienced problems related to security, food, accommodations and artist relations resulting in the festival being postponed indefinitely. Instead of the luxury villas and gourmet meals festival attendees paid thousands of dollars for, they received prepackaged sandwiches and FEMA tents as their accommodations.
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Two documentaries about the events of the festival were released in 2019. Hulu released an original documentary, Fyre Fraud, on January 14, 2019. On January 18, Netflix released Fyre: The Greatest Party That Never Happened.

The festival was organized by Billy McFarland and Ja Rule to promote the Fyre music booking app. Ja Rule had come to know McFarland through regular visits to events McFarland hosted at his previous venture, Magnises. During a flight to the Bahamas, McFarland and Ja Rule’s private plane touched down on a deserted island which they later discovered was Norman’s Cay, the former private island of drug lord Pablo Escobar. McFarland arranged to lease the island, which he envisioned as the venue for his Fyre festival, on the strict condition that no reference be made to the island’s Escobar connection. The island footage with the hired supermodels used for the Festival’s promotional material was all shot on Norman’s Cay, and planning for the event went ahead. In early 2017, McFarland violated the terms of his contract by promoting the island’s Pablo Escobar connection in Fyre’s social media posts, and the owners immediately cancelled the freehold. A frantic search for a new island venue ensued.

After several small islands that seemed like likely venues were turned down, the Bahamian government gave McFarland a permit to use a site set aside for development at Roker Point on Great Exuma. Material released on social media continued to promote the falsehood that the Festival was being hosted on Pablo Escobar’s private island, with maps of the site altered to make it appear as if Roker Point was an island unto itself.

On December 12, 2016, Kendall Jenner, Emily Ratajkowski and other influencers paid by Fyre, simultaneously posted to their Instagram feeds an image of an orange square with a stylized logo of flames. Clicking the logo opened a promotional video showing Bella Hadid and other models represented by her agency running around a tropical beach. Text with the video promised “an immersive music festival … two transformative weekends … on the boundaries of the impossible”. This was the beginning of the Fyre Festival’s promotional campaign.

An investor, fashion executive Carola Jain, reportedly arranged for Fyre to receive a $4 million loan, which the company used most of to rent luxurious offices in Manhattan’s Tribeca neighborhood. With no experience staging an event of the proposed festival’s scale, McFarland began approaching companies that did, and he was reportedly taken aback when they told him the event would cost at least $5 million, perhaps even $12 million to stage in the time available as he had promised. He and his associates at Fyre believed it would cost far less, and continued with their plans under that assumption. They tried to do things themselves where possible; McFarland supposedly learned how to rent the stage by doing a Google Search.

Scheduled for two weekends in April and May 2017, the event sold day tickets from $500 to $1,500, and VIP packages including airfare and luxury tent accommodations for US$12,000. Customers were promised accommodations in “modern, eco-friendly, geodesic domes” and meals from celebrity chefs.

Contrary to the festival’s promotional material, the festival’s site Fyre Cay — claimed to be a remote private island that once belonged to drug trafficker Pablo Escobar — did not exist. Instead, workers in the Bahamas were busy preparing Roker Point for the festival, scattering sand over its rocks and improving a road to a nearby beach, where they built some cabanas and installed swing sets.

On the mainland, 5,000 tickets had been sold and an air service was hired to charter festival-goers from Miami. A medical-services company and caterer were also hired, but the latter withdrew a few weeks before the festival. With only two weeks to go, a new catering service with a $1 million total budget was hired, drastically reduced from the $6 million originally allocated to provide for the luxury cuisine promised to attendees.

In March 2017, Fyre also hired a veteran event producer, Yaron Lavi, who saw that it was impossible to hold the sort of event McFarland and Ja Rule envisioned, at the site. He assumed they would postpone the event to November as they had been discussing since they were not ready, but after Fyre told him they would stage the event in the spring anyway, claiming weather would ruin the event, Lavi told them to abandon plans for temporary villas and instead erect tents, the only accommodations that could be delivered in the time remaining. Lavi advised Fyre to make this clear to those who had already bought tickets, as otherwise it would be damaging to their brand. He says the company assured him that an email was being prepared, but he is not sure if it was sent.

Comcast Ventures considered investing $25 million in the app, which McFarland apparently hoped would allow him to finance the festival, but declined days beforehand. Reportedly, McFarland had valued Fyre Media at $90 million, and was unable to provide sufficient proof of that when Comcast requested it.

Writing for New York magazine, one of the event organizers later noted that since at least mid-March there were significant problems with the planning, and at one point it was agreed to outright cancel the 2017 festival in favor of working to perfect a 2018 one.

These plans, however, were revoked at the last minute with the decision to go on with the event as planned. “Let’s just do it and be legends, man,” one of the organizers is reported to have said. Later that month, Page Six began reporting rumors that the festival organizers were too disorganized and “in over their heads.”

After the Comcast deal fell through, McFarland had obtained some temporary financing for Fyre through investor Ezra Birnbaum that required the company repay at least half a million dollars of the loan within 16 days. Around this same time, Fyre informed ticket-holders that the event would be “cashless (and cardless),” and encouraged attendees to put up to $1,500 in advance on a digital Fyre Band to cover incidentals, according to one lawsuit. Each attendee will be issued an RFID, smartwatch-like ID to use in-island. This was despite advisors warning McFarland that such digital bracelets would be useless because of the poor Wi-Fi connection at the site. McFarland, who signed the email, suggested that they upload $300–500 for every day they planned to attend. A total of $800,000 was loaded by festival attendees onto these Fyre Bands in advance. According to a lawsuit later filed by Birnbaum, 40% of this money was to be used to pay off the short-term loan.

Early in the morning of April 27, heavy rain fell on Great Exuma which soaked the open tents and mattresses piled out in the open air for guest arrivals later that day. The first flights from Miami International Airport to Exuma International Airport, operated by Swift Air and Xtra Airways, landed at 6:20am. That afternoon, Blink-182 announced that it was withdrawing from the festival, stating in a Twitter post that: “We’re not confident that we would have what we need to give you the quality of performances we always give our fans.”

Initial arrivals were brought to an “impromptu beach party” at a beachside restaurant, where they were plied with alcohol and kept waiting for around six hours while frantic preparations at the Festival site continued. Later arrivals were brought directly to the grounds where the true state of the festival’s site became apparent. Festival-goers were dropped off at the production bungalow where McFarland and his team were based so they could register, but after hours of long lines the process broke down and turned into a free-for-all as people rushed to claim their own tents. Around nightfall, a group of local musicians took to the stage and played for a few hours – the only act to perform at the event. In the early morning, it was announced that the festival would be postponed and that the attendees would be returned to Miami as soon as possible.

Reports from the festival emerged of various problems, including the mishandling or theft of guests’ baggage, scattered disaster relief tents with dirt floors, some with mattresses that were soaking wet, a lack of housing assignments causing guests to leave with no place to sleep, an unfinished gravel lot, a lack of medical personnel or event staff, no cell phone or internet service, portable toilets, no running water, inadequate and poor quality food (including cheese sandwiches served in foam containers), and heavy-handed security.

Many attendees were reportedly stranded, as flights to and from the island were cancelled after a government order that barred any more planes from landing.

The first flight back to Miami boarded at 1:30 AM on April 28, but was delayed for hours due to issues with the flight’s manifest. It was cancelled after sunrise and passengers were locked in the Exuma Airport terminal with no access to food or water and no air conditioning; a passenger recalled that at least one person passed out from the heat and had to be hospitalized.

The flight eventually left Exuma that morning, and more charter flights to Miami departed from Exuma throughout the day.

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On May 21, 2017, The New York Times reported McFarland and his associates were under an active federal criminal investigation by the Federal Bureau of Investigation for mail fraud, wire fraud, and securities fraud. The case was overseen by the United States Attorney for the Southern District of New York. On June 30, 2017, McFarland was arrested and charged with one count of wire fraud.

On March 6, 2018, McFarland pleaded guilty to one count wire fraud in what the U.S. Justice Department called a scheme to defraud investors, as well as a second count of wire fraud related to a scheme to defraud a ticket vendor. McFarland was ordered to repay $26 million to investors.

On July 24, 2018, the Securities and Exchange Commission (SEC) announced that McFarland, two companies he founded, a former senior executive, and a former contractor agreed to settle charges arising out of an extensive, multi-year offering fraud that raised at least $27.4 million from over 100 investors. McFarland admitted to the SEC’s allegations against him, agreed to a permanent director-and-officer bar, and agreed to disgorgement of $27.4 million. Grant H. Margolin, Daniel Simon, Fyre Media, and Magnises, Inc. agreed to the settlement without admitting or denying the charges. Margolin has agreed to a seven-year director-and-officer bar and must pay a $35,000 penalty, and Simon has agreed to a three-year director-and-officer bar and must pay over $15,000 in disgorgement and penalty. The settlements are subject to court approval.

On October 11, 2018, McFarland was sentenced to six years in prison and ordered to forfeit US $26 million for wire fraud.

To read up on the whole mess and to see how easily it is for things to go belly-up, check out:
https://en.wikipedia.org/wiki/Fyre_Festival

Categories: Reports

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