The Business of Boots and Hearts
Boots and Hearts is the second largest music festival in North America. We attended this summer and it was fabulous. There were 20,000 people on Thursday and 45,000 people each of Friday, Saturday and Sunday. The real estate comprises 600 acres between Lines 7 and 9 in Oro Medonte, and Burl's Creek bills itself as Canada's largest outdoor event venue. Attending all four days this summer, I began to ponder the business end of the event.
According to property records, Stan and Eva Dunford through their numbered company appear to have bought the 600 acres in October 2014 for $3.33 million or $5,550 per acre. Oro Medonte is one of those places that you drive through en route to somewhere else. The weather most of the year is challenging at best. It can be blue skies in Barrie and sunny and warm in Muskoka and grey and sleeting in Oro Medonte. The Dunfords buying there and turning it into such a successful venue shows foresight. I love the economics of real estate so started to calculate how much money the music festival might bring in.
The smaller stage highlighted three Canadian country musicians Thursday night from 7 to 11 pm. Owen Riegling went from 11,000 monthly listeners to 110,000 within a few weeks of his performance, so it is likely he was not paid to attend but did it to raise his profile. My eldest son has been listening to him regularly ever since. Josh Ross is more popular but still likely was not paid to perform or was paid little given how much Boots and Hearts increases profiles. Tim Hicks was the headliner on Thursday night and he was likely paid something to attend, perhaps $200,000.
Friday night was sold out. Hardy opened for Nickelback. Hardy is a favourite around my house. He yells and screams while performing; is incredibly energetic; and always seems to be having a heck of a good time. He did not disappoint. He was likely paid around $300,000 to attend. Nickelback are a controversial Canadian institution, authentic, real and the exact opposite of politically correct. They put on an amazing pyrotechnic display with loud noises, great music, engaging conversation, and lots of lights. They were in a word spectacular. They were likely paid $700,000 to attend, and worth every penny according to my 14-year old daughter.
Saturday featured Lauren Alaina, Dallas Smith and Keith Urban. My 10-year old daughter loved Lauren Alaina, and she was likely paid $200,000 to attend. Dallas Smith rocked the place with good stage presence and good music. He was likely paid $300,000 to attend. Keith Urban was in a league of his own: so charming and engaging; getting down to greet the crowd at their level; playing all his great songs; owning the crowd for the 90 minute performance. He attracted an older crowd than Thursday and Friday, and was well worth the $1 million or so he was likely paid.
Sunday was the finale. Everyone in attendance seemed more subdued on the last day. More sweatshirts and jeans as opposed to shorts and tank tops. Travis Dennis, Riley Green and Tim McGraw were the main acts. Dennis was excellent and likely made $300,000. Riley Green was a complete stud and rocked the place, conversing with the crowd and appearing completely at home and in charge of the stage. His songs were amazing and he was as favourite with my youngest son and his girlfriend. Tim McGraw was his legendary self, breaking out his many hits and showing true professionalism in the way he performed. Riley was likely paid $500,000 and Tim $1 million. All three unbelievably good. The crowd Sunday was older.
Let's tally up the potential receipts from the four day weekend.
1. $21.1 million: The gate fees. It was $180 per day or $400 for the weekend. Let's assume half of the people each day only paid for one day and the other half paid for the entire weekend. That is $180 x 22,500 x 3 days and $100 x 22,500 x 3 days for Friday through Sunday, along with $120 x 10,000 and $100 x 10,000 for Thursday. Hence total gate fees tally about $21.1 million.
2. $3.85 million: The food concession stands were busy all weekend and the food prices were steep, so let's assume everyone there spent another $100 on food over the weekend, or $25 per day x 20,000 people on Thursday and $25 per day x 45,000 people on Friday, Saturday and Sunday. That is another $3.875 million.
3. $200,000: The merchandise sold out on Thursday and Friday, leaving little choice Saturday and Sunday. Again, let's assume 4,000 people bought something worth at least $50, meaning another $200,000 from merchandise.
4. $100,000: There were games and rides as well, so let's tack on another $100,000 there.
5. $6.4 million: Camping and RV fees. A lot of people camped, which cost another $400 per campsite per weekend. There are 16,000 campsites there and all seemed full. $400 x 16,000 = $6.4 million.
Total Revenues: $31.65 million
Now for the expenses. There is no mortgage on the property. There would be property taxes, maintenance, entertainment costs, security costs, administrative and marketing costs.
1. $200,000: Property taxes: I am assuming around $200,000 per year.
2. $900,000: Maintenance: Port-a-potty, groundskeepers, campsite monitors would be but a few of the maintenance folks needed. I am assuming 900 people for the festival itself at $25 per hour at 40 hours would be $900,000.
3. $4,500,000: Entertainment costs are detailed above based on some research into what various performers are paid. I am making broad assumptions.
4. $1,920,000: Security: There were police officers in obvious attendance along with private security. Assume $100 per hour x 200 security and police officers x 96 hours = $1,920,000.
5. $1 million: Administrative costs would be everyone responsible for running Boots and Hearts during the year. I am assuming 10 people at an average of $50,000 per year plus two people at an average of $250,000 per year. Total $1 million.
6. $3.165 million: Marketing and sales costs. I assume it is an ongoing job to promote Boots and Hearts, arrange the performers, and attract the crowds. I am assuming this would tally 10% of the total revenues, or $3.165 million.
Total Expenses: $11,685,000.
Total profits: $19,965,000, rounded up to $20 million.
Wow! If I am right, or even close to right, the Dunfords are making a fortune while putting on a great show every summer. It is a Canadian institution of which we can be very proud. Go Boots and Hearts! Hope to see you next year.