Two Festivals Sue Ticketing Site Lyte After Abrupt Shutdown, $300K Losses
Two festivals have filed a lawsuit against the ticketing company Lyte after its demise allegedly caused the festivals to lose more than $300,000.
Lyte, the San Francisco-headquartered ticketing company, abruptly shut down last week and seemingly went out of business, which has left promoters unpaid and thousands of tickets in limbo. The company’s website has been down for days, reading “Be Back Soon!” with a note that the website “is currently undergoing scheduled maintenance.”
Antony Taylor, Lyte’s founder and chief executive, confirmed to Billboard his resignation from the company, and there is reportedly an effort underway to identify a potential buyer to repay fans and promoters affected by the shutdown. Insiders told The Ticketing Business that Lyte’s workforce was notified the company was ceasing activities and product development during a meeting earlier this week, and access property was restricted for most employees.
According to court records obtained by Billboard, Lost Lands and North Coast Music Festival are facing more than $300,000 in losses after quietly scalping their VIP tickets through Lyte. Chicago’s North Coast Music Festival has filed a suit against Lyte in a New York court, while Ohio’s Lost Lands Festival filed in Los Angeles.
One court document showed that out of 3,064 tickets listed on Lyte for the North Coast Music Festival, only 89 of those tickets were fan listings. The remaining 2,975 ticket listings were posted directly on Lyte from the event promoters, amounting to a collective face value of around $287,750. These tickets would go on to generate $426,912 in revenue — showcasing a 48% price increase — and that money would be split 50-50 with the promoters. North Coast Music Festival was set to receive $69,581 — a 24% increase in revenue from the originally listed price. The festival never received this revenue, nor was it paid back the $287,750 for the tickets listed on Lyte, court documents read.
It’s a similar scenario for Lost Lands Music Festival; the festival claims in court documents that it is owed $330,000 for tickets it sold on Lyte, as well as the revenue generated from markups. In the lawsuit, filed under its corporate name of APEX Management, the festival alleges Lyte paid APEX a $100,000 advance fee for using the platform, which was repaid by early September.
The court filing also noted that APEX’s consultant, AEG Presents, learned of Taylor’s resignation on September 12 and that “Lyte had ceased virtually all of its business operations and laid off virtually all of its employees.” The lawsuit states that two days later, officials with AEG contacted Lyte’s CFO Lisa Bashi and learned “she could not commit to the timing of any payment or even that there would be a payment” to Lost Lands, noting that “this was an unfortunate scenario” and the “Defendant had become insolvent.”
Earlier this month, a judge overseeing the Lost Lands case approved the organizers’ request for a writ of attachment, which would allow organizers to seize Lyte’s property before a judgement is entered, ensuring the festival would be paid. APEX noted ini the court filing that failed payments severely effect the festival, as they will have to “urgently find alternative sources of revenue to pay the vendors and artists who will be working at the festival, to make up for its planned share of the secondary market sales” and will “suffer a loss from the festival rather than break even.”
Lost Lands organizers posted the following statement regarding the situation:
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Lost Lands and North Coast Music Festival are not alone. According to the music festival news source Festive Owl, both big and small event organizers have reached out saying they have hundreds, if not thousands, of tickets currently stuck in Lyte’s system. If this is a showcase of Lyte’s bankruptcy in real time, festivalgoers will be out of tickets and organizers will be out hundreds of thousands in funds. As for small event organizers, this could result in losing all of the event’s revenue.
Lyte first launched in 2014, and Taylor raised around $53 million in four major funding rounds — including rounds of $15 million in 2019 and $33 million in 2020. The ticketing site billed itself as a fan-to-fan exchange, allowing fans to resell their tickets, though Lyte’s clients told Billboard the company had allowed promoters to scalp their high-end tickets and VIP festival tickets on the site as well. Additionally, Lyte acted as a primary ticketing platform for many smaller events.
Lyte’s clients included the Baja Beach Festival in Mexico, Pitchfork Music Festival in Chicago, and Rhode Island’s Newport Folk Festival, though it is unclear how much money Lyte owes each of the events.
While there has been no word regarding Taylor’s decision to resign, there could be many reasons for the company’s downfall at play; insiders told The Ticketing Business Lyte’s demise is due to mismanagement, as well as the acquisition of Festicket. One person familiar with the transaction said it was “the stupidest deal ever done” and things “went downhill pretty much” after the deal.
Attorneys representing a number of Lyte’s clients are reportedly hoping to pull their money from the platform as soon as possible.
