The Disastrous Fyre Festival May Have Wrecked It for Everyone | Hacker News Reader

The Disastrous Fyre Festival May Have Wrecked It for Everyone

bloomberg.com

73 pointspetethomas36 comments

Nothing in the article indicates that insurance will be harder for other festivals to obtain. The insurance executive quoted says that insurance probably wouldn't have covered the organizers of the Fyre festival. The event did not fail because of an external event; it failed because the organizers didn't have the money and organization to prepare for it.

Fyre Media is being forced into bankruptcy by their many creditors. The WSJ article is "Lenders Seek to Force Fyre Festival Into Bankruptcy". (If you search for that in Facebook, you can read it for free. Searching for it in Google won't help. This, as an aside, reflects the changing power situation between Google and Facebook.)

The conclusion I walked away with was articles that describe how insurance works need clickbaity titles.

I think the article indicates insurers need to do some due diligence on these festivals. Its unclear if Fyre even had insurance for a festival on a remote (basically unpopulated) island in the Bahamas. Most festivals aren't that ambitious in location.

The Fyre organizer basically didn't have it together: "Farland, 25, is alleged to have cheated at least two investors out of about $1.2 million by lying about the revenue and income of Fyre Media Inc., which he founded in 2016. He gave them phony documents claiming the company generated millions of dollars in revenue from thousands of artist bookings in a single year, when it really earned just $60,000 from about 60 performances, they said."[1]

https://www.bloomberg.com/news/articles/2017-07-01/u-s-charg...

Just for your information, it wasn't on an unpopulated island but on Exuma, specifically 1 mile north from the resort "Sandals Emerald Bay" .

Yep, they tried really hard to make it sound like it was some far flung place and showed a lot of cleverly oriented pictures to make their case, but this is where the festival was meant to be located:

https://www.google.com/maps/place/Exuma,+The+Bahamas/@23.635...

Zoom out a bit to see exactly how 'remote' it really was.

Edit: Meh, mobile GMaps is messing with the link, but their property was on the north side of the island a few hundred yards from a marina.

This is the actual beach they would have been on: https://goo.gl/maps/VN5r6NPas512

I found it by comparing the stylized ground maps they released with the satellite imagery.

Exactly, they advertised it to be on an island “once owned by Pablo Escobar” implying that it was on Norman's Cay ( https://en.wikipedia.org/wiki/Norman%27s_Cay) but Norman's Cay is 100 miles away. Just lies...

> This, as an aside, reflects the changing power situation between Google and Facebook.

This is about as clear a case of anecdata as I've ever seen

Weird article. As others have mentioned, it uses the Fyre Festival as a hook for an article about insurance, but the Fyre disaster doesn't have anything to do with insurance, and the article doesn't even try to make the case that it did.

Also, the article tries to make the case that festival insurance is expensive, but the actual costs quoted in the article seem...not that bad? Basically a few percentage on top of the ticket price. They multiply that number by a million, saying that if you had a festival that big, the absolute amount of money would be large, but that doesn't really mean anything. Lots of numbers are big after you multiply them by a million. Presumably the organizers care about the cost as a percentage of revenue.

Responding to the misleading headline (as opposed to the content) Fyre only "wrecked it" for themselves.

As to the content, had they shown that "DesertTrip II" or some other festival was not held because they couldn't find an insurer they might have something to talk about but I didn't see that in this piece.

I did learn a bit about how festivals are insured though so it wasn't a complete waste of time, but I don't like clickbaited titles and "trusted" media sources would be wise to avoid them imho.

Risk vs reward. An insurer only wants the gains, but without taking a risk on the outcome? That's why you have insurance -- insurers just need to have proper risk management in place and correctly determine a price they want to charge to insure an event.

A festival that has had 10+ annual successful runs will likely be (much) cheaper to insure than a startup project.

If drugs and/or alcohol are the problem, then you raise the premium to account for that.

>> insurers just need to have proper risk management in place and correctly determine a price they want to charge to insure an event

Is that supposed to be a definition of the insurance industry?

The article discusses a number of tactics the insurers take to make this happen, including walking the event site before and after, and monitoring who manages the event, down to the boots on the ground.

This comment seems to say all the dummies are doing it wrong and just need to wise up and crunch a few numbers.

A lot of talk about attendees' use of drugs and alcohol creating risk, but this catastrophe had nothing to do with that.

"Inevitably, there will be claims, with spectator liability being the most common, said Nuccio. “Most of them are liability claims: slip and fall, molestation, alleged rape, false arrest, false imprisonment, assault, battery.” "

These cases often involve drugs or alcohol.

I don't understand - how could assault or rape be the responsibility of the event organiser? If people are being dicks they should be paying for it, not the event's insurance.

From the article:

> In late June, Insomniac Holdings LLC and Live Nation Entertainment Inc. were sued for the wrongful death of attendee Tom Nicholas at the Electric Daisy Carnival festival in Las Vegas, alleging the event made it difficult to access water and medical staff. In 2016, the mother of Emily Michelle Tran, who died at the HARD Summer Festival in 2014 after taking MDMA and having a seizure, sued Live Nation for negligence and wrongful death. Insomniac and Live Nation declined to comment on the litigation.

The key there was the difficulty accessing staff. For assault and rape, the organizer could be at fault if there was insufficient security staff, or the hired staff ignored an issue allowing for negligence. Furthermore, if the security ignored an individual who was drunk and belligerent leading to an assault or rape, that would also be an issue. With the prevalence of drinking at such events and security missing or overlooking such an event, this is a very real concern for insurers.

There's a large body of law in the U.S. on the responsibilities of "dramshops" (places that sell alcohol) and social hosts.

http://www.nolo.com/legal-encyclopedia/alcohol-related-accid... is a good place to start your research.

If something bad happens to you at a festival, why would you sue the festival? In the words of Willie Sutton (who was talking about robbing banks) "That's where the money is."

I think it's purely an English law thing (?) but have you heard of Vicarious Liability, it's kinda crazy what a company can be liable for.

Yes, that was the general argument for why it's hard/expensive to insure a festival. But all the problems with Fyre festival were the fault of those who organized it. (Or didn't organize it, I guess.)

And the insurers saw how wrong it can go and how much the payouts for such could be. This then was fed back into the risk / premium calculation equations and have kicked out a new, higher number for festivals that lack a history (and even those that do have a history, as the risk has gone up too). Furthermore, as insurers tend to spread the cost around (the festivals with a good history, and the festivals with little or no history), the festivals with a good history will pick up a bit of additional cost for insurance to make sure that insurers have enough to be able to cover possible losses.

There's the other side to the coin too. Now, a bunch of con men saw how easy it is to swindle a bunch of idiots for thousands or tens of thousands of dollars and even get them to fly to a remote island before making away with the money. This will attract some bad characters and that's why it's time to ship out a piece like this. It's a hit piece to highlight the punishment and tightening controls to keep the con men at bay from trying the same thing. Smart.

Also, you'd think that requiring a commercial flight to a remote island would filter out most of the drugs anyway.

LSD can be stored in liquid form inside of eyedrop sized containers. MDMA and coke are powders which can be stored in a makeup bag without arousing suspicion. Weed can be baked into edibles (brownies, cupcakes, etc) or added to candy (gummies, lollipops). Basically the only thing you need to do is make sure they visually don't look like drugs, since the TSA isn't going to be drug testing everything, they'll just be passing it through an x-ray machine and visually inspecting it.

I'd wager that's not how the bulk of whatever was used there was imported, but I may have seen too many James Bond movies.

What about dogs? Dogs can certainly detect weed in an edible, as well as very small quantities of cocaine and mdma.

Would require ridiculous amounts of dogs, they get bored very fast.

I've heard that most dogs in airports are specifically trained to detect explosives, not marijuana.

Airport security != customs

Still, there's a risk-reward ratio, where the risk is presumably chance of search * chance of detection * penalty for detection.

With a flight the chance of search is 100% - and the TSA are famously tough on innocent people, so I can't imagine they're easy on guilty people.

One would think the increased risk would at least raise prices, if not limit the supply.

Ha, I personally would not think that but fair enough.

I was simply pointing out that if it's soo hard and expensive to insure a festival because people do drugs, what has Fyre festival got to do with that? It was a disaster because the organizers didn't do their jobs.

Since there are drugs in US prisons, probably nothing stops people from getting them into a remote island.

I would assume the opposite because of the cash available to the attendees and someone probably flew private. This is a rich clientele with a desire to party. Someone would figure the logistics of supplying them.

Neither is the article claiming it had? Despite the headline, it really is primarily talking about festival insurance in general.

1. Festivals are hard to insure because the attendees get wasted, then they hurt themselves and do dumb stuff. (OK)

2. Fyre festival was a huge disaster because the people who put it together did a bad job, and not really for any reasons regarding attendees at all. (Also OK)

3. Therefore, Fyre festival has "ruined it" for other festivals -- i.e., made it harder for them to get insurance. (???? This doesn't follow from 1 & 2)

The article makes the claim that due to the fact that Fyre failed so spectacularly that Festival insurance's rates would rise such that Festival organizations wouldn't be able to throw the Festival. I think that insurers will be more conservative on out there Festivals for the first time and do more due dilligence. Also, they will inccrease fees to the other Festivals and that may limit Festivals or they might insitute new rules and Festivals may be forced to figure out how to decrease their risks.

Reply on news.ycombinator.com