KAABOO Fest Is Facing Cancellation (Again), Leaving Fans in the Lurch – Billboard
Written by GRB on 13/07/2022
In the summer of 2020, during some of the hottest, most difficult months of the pandemic, the management of the KAABOO festival in Del Mar, Calif., went to fans and made a familiar plea: Ticket holders who rolled their 2020 tickets into 2021, instead of asking for a refund, would get a free VIP upgrade or free companion pass when the festival returned the following year.
Approximately 1,500 to 2,000 fans holding approximately $500,000 worth of tickets accepted the offer, trusting that new owner Marc Hagle, a 72-year-old real estate developer from Florida who bought the festival in 2019, would make good on his promise. With the pandemic continuing last summer, the 2021 festival got pushed to 2022 — and now, sources familiar with the situation tell Billboard the festival likely won’t happen again this year. But this time, organizers can’t blame the pandemic.
In fact, assigning blame for the complicated downfall of one of the state’s most popular multi-genre festivals isn’t easy. Technically, the festival’s probable cancellation this year is the result of a legal disagreement — between the San Diego Padres and lawyers representing a maze of shell companies owned or controlled by Hagle — over who has the right to host the festival in 2022. That disagreement, which itself relies on the language of an unfinished 2019 contract between the Padres and KABBOO’s former chief executive Jason Felts, is far from settled. That’s bad news for Hagle, who can’t begin to recoup the $23 million he lost in 14 months buying KAABOO and its parent company until the issue with the Padres is resolved.
It’s also bad news for KAABOO fans holding tickets, who were led to believe that the festival would finally take place in 2022. While neither dates nor performers have been announced for the 2022 festival, ticket holders have widely assumed it would take place Sept. 16-18, the same weekend it’s been held since launching in 2015. Legal documents show that on July 8, 2021, a company controlled by Hagle licensed the rights to stage KAABOO to a recently registered Delaware entity called Festival Licensing and Acquisition Corporation, which Billboard has learned is controlled by veteran event producers and KAABOO alums Chris Racan and Carl “C3” Monzo. Legal docs show that the two technically have until Dec. 31, 2022, to stage the festival, but Hagle’s own attorneys admit that’s probably not enough time.
“Given the magnitude and size of the festivals like KAABOO, the planning and preparations can take a year or more,” writes Hagle’s Delaware attorney Steven Caponi in a March complaint filed against the Padres. “Further, there is a limited window each year in which to hold a festival like KAABOO decreasing the number of available dates, thus highlighting the importance of securing a date and planning the festival as early as possible.”
Instead of updating fans about the delays, Hagle has stayed silent – in fact, he has stayed relatively quiet since buying the festival in late 2019 and said nothing after his plan to license the festival to Racan and Monzo collapsed in September, after deputy state attorney general Josh Caplan, who represents the state-owned Del Mar fairgrounds, learned of the dispute with the Padres. On Sept. 9, Caplan relayed an order to Del Mar executives to halt discussions about bringing the festival back to Del Mar “until the issue with Petco Park is fully resolved,” according to court documents.
Racan and Monzo have stopped working on the event since Caplan’s intervention, while nothing has been communicated to ticket holders. The KAABOO website still features the same message that was posted in late July 2021 telling fans: “We have been hard at work tuning our strings for the highly anticipated return of KAABOO,” thanking them for their “patience and continued support of the brand.”
Officials at See Tickets, which served as KAABOO’s ticketing agent and payment processor, have been lobbying Hagle to immediately refund all fans for any money spent on the 2020 festival. While See Tickets officials did not comment for this story, sources tell Billboard that the Vivendi-owned ticketing company is considering taking legal action.
If Hagle is concerned about fans or the health of the festival, he’s not showing it. Instead of letting fans know that the planned 2022 relaunch was in trouble, the 72-year-old and his wife Sharon traveled to Texas in March to train for a once-in-a-lifetime trip aboard Jeff Bezos’ Blue Origin New Shepard rocket. On March 31, they took an 11-minute flight 66 miles above the earth’s surface, where they became the first married couple in history to travel into space.
The Hagles have also placed their $16 million Florida home on the market in recent months, pledged to donate $5 million to the athletics program at the University of Central Florida and openly mused about bringing their pet Pomeranian, Saba, along on a second space flight. Neither they nor their lawyers responded to multiple inquiries from Billboard regarding the status of the KAABOO festival.
GOOD INTENTIONS ONLY GO SO FAR
Hagle was originally hailed as KAABOO’s white knight in 2019 by Felts, when Hagle spent more than $10 million bailing out the festival after former owner Bryan Gordon pushed it to the brink of bankruptcy.
Gordon had burned through $69 million in lost equity, debt and liabilities in the five years that he had operated the festival and was unable to pay either key vendors for the festival or headlining artists — some of whom were refusing to take the stage in 2019 until they were paid in full. Gordon had also tried to expand to Texas with Dallas Cowboys owner Jerry Jones, who ended up losing at least $8 million on KAABOO Texas in 2019. And billionaire tax entrepreneur Ken Dart, a partner in the spinoff festival KAABOO Cayman in 2019, swore he would never work with Gordon again after he learned the executive had allegedly been selling tickets to a sequel event in the Cayman Islands without Dart’s permission.
Hagle, a multimillionaire commercial real estate developer from Florida, was going to finally clear up the festival’s finances and insisted that any money he paid to buy KAABOO go directly to the festival’s creditors. Hagle closed the sale on the eve of the festival’s 2019 opening day, only to later learn that he too was an apparent victim of Gordon. Court records show Hagle accused Gordon of misrepresenting the festival’s finances, stacking KAABOO with costly debt deals, failing to disclose more than a dozen lawsuits and allegedly ordering staff “to place the cash proceeds from food and beverage in backpacks and remove them from the venue,” according to legal filings in Delaware, where Hagle and Gordon are now suing each other.
Hagle’s attempt to launch Los Angeles-based Virgin Fest in 2020 didn’t fare much better. When Hagle bought KAABOO, he also purchased the right to stage the first-year festival, named after Richard Branson’s Virgin Group, which provided some limited marketing support, in downtown L.A. In early 2020, Hagle agreed to pay Lizzo $5 million to headline the inaugural festival in a deal with her talent agency WME, but when the festival was postponed due to the COVID-19 pandemic, they allegedly refused to return the money. Hagle now has active lawsuits against Lizzo and Kali Uchis over unreturned deposits.
Frustrated by his growing losses and the damage the pandemic was doing to the concert industry, Hagle decided to close out his position in the festival business. In October 2020, four months after asking fans who bought tickets to KAABOO 2020 to roll their tickets over to 2021 in exchange for VIP upgrades or free companion tickets, Hagle let go of most of the KAABOO and Virgin Fest staff – the latter including former chief marketing officer Steven Levy, who had left Insomniac to help launch Virgin Fest, and CFO Chuck Ciongoli, who had come from SFX. With his staff now gone, Hagle and his attorneys set a plan in motion to move the festival back to its original home at the Del Mar Fairgrounds with a new production team in charge.
WHAT ABOUT REFUNDS?
In January 2021, Hagle’s own real estate company, Tricor International, foreclosed on KAABOO’s assets — including its festival-related trademarks — after the festival defaulted on a $23 million promissory note. Those assets were then transferred to a trust Hagle controlled, which then moved the assets to a pass-through entity Hagle controlled, which subsequently leased the assets to another company Hagle controlled called Live Holdings. Live Holdings leased the KAABOO trademarks to a holding company registered in Delaware called Festival Licensing and Acquisition Corporation, an entity controlled by Racan and Monzo along with San Diego company Brand Exposure Activation Management (BEAM). Racan runs BEAM with Monzo, son of the late Carl Monzo II, who served as head of security for the band Phish for more than a decade.
Monzo agreed to pay Hagle approximately $1.07 million per year plus royalties for 10 years for the rights to produce KAABOO. Monzo’s group then began negotiations with representatives from the state-owned Del Mar Fairgrounds — KAABOO’s first and only home from 2015 to 2019 — to stage the event in the fall of 2022.
While Felts, on behalf of KAABOO, had signed a term sheet with the Padres in 2019 outlining a plan to move the festival to Petco Park the following year, that contract was never finalized. Once the Padres’ attorneys caught wind of Hagle’s maneuvering with BEAM and their plans to move the event back to the fairgrounds, they argued that the term sheet Felts had signed was binding and gave the team exclusive rights to stage the festival in San Diego and south Orange County. They demanded KAABOO pay $2 million to trigger the festival’s cancellation clause.
Attorneys for Hagle sued the Padres, first in San Diego in January and again in March in Delaware, accusing the team of tortious interference. The lawsuits made the local news and, by now, fans who had paid upwards of $5,000 for a VIP ticket to KAABOO were getting anxious. Officials at See Tickets were also growing concerned – the money generated from the 2019 presale had been advanced to Hagle’s group, and now fans were inquiring about refunds if the festival was postponed for a third time.
After spending $23 million to prop up KAABOO and launch Virgin Fest, many fans are wondering why Hagle doesn’t pay the Padres the $2 million they’re demanding, or personally finance the $500,000 in refunds to fans and be done with the whole headache.
“I think he would have had he not been treated the way he had by Gordon and other entities he dealt with,” says a former KAABOO consultant who watched Hagle harden his stance over time. “He came into this business a different person than the one who left, and he reached a point where he was not going to hand over any more money to anyone — even if it made the problem go away. I think he just does not trust anyone any longer and it is easy to see why.”