Lyte

Two independent music festivals that had hoped to generate approximately $70,000 in revenue by quietly scalping their VIP tickets through the since-shuttered ticketing company Lyte now each face more than $300,000 in losses, court records show.
The festivals are represented in two lawsuits — one filed by organizers of Chicago’s North Coast Music Festival in New York court and the other, Ohio’s Lost Lands Festival in Los Angeles court. The suits provide the first insights into the collapse of Lyte, which suddenly ceased operating earlier this month.

The sudden closure of the company, without any warning to its hundreds of clients, revealed that Lyte CEO Ant Taylor, a Princeton graduate and former media executive, had quietly shifted the business into large-scale ticket scalping in recent years. Lyte was marketed to the public as a fan-to-fan ticket exchange, but documents from recent lawsuits show that Lyte’s main source of revenue came from working directly with promoters to scalp hundreds of thousands of dollars’ worth of VIP tickets for their events to Lyte, which would then resell those tickets at large markups, splitting the upside between the promoter and itself.

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According to one court document, of the 3,064 tickets listed on Lyte for the North Coast Music Festival in Chicago (Aug. 30-Sept. 1) only 89 tickets came from fan listings. Lyte would use those fan listings to drive traffic to an additional 2,975 tickets posted directly on Lyte by the event’s promoters, with a collective face value of approximately $287,750.

Lyte was able to scalp those tickets on its own marketplace and generate $426,912 in revenue — a price lift of nearly 48%, or approximately $139,162 total — which it would then split 50-50 with the promoters. North Coast Music Festival’s cut of the action was to be $69,581, which represents a 24% increase in revenue over their original allocation.

But none of the above mentioned revenue was paid to the dance-centric NCMF festival and the festival was also never paid back for the $287,750 in revenue from tickets it listed on Lyte.

The team behind Lost Lands Music Festival, which takes place each September in Legend Valley, Ohio says its owed $330,000 for the tickets it sold on Lyte, plus the upside it generated from the markups. According to the Lost Land’s lawsuit (filed under its corporate name of APEX Management), Lyte paid APEX a $100,000 advanced fee for using the ticketing platform, which APEX repaid by early September.

Much of Lost Land’s lawsuit is heavily redacted, although the suit does provide some clues about the timeline surrounding Lyte’s collapse.

According to a court filing, APEX’s consultant for Lost Lands, concert giant AEG Presents, had learned that Taylor had resigned as Lyte’s CEO on Sept. 12, and “that Lyte had ceased virtually all of its business operations and laid off virtually all of its employees,” attorney Eric Levinrad writes in a recent court filing.

The lawsuits states that two days later, officials with AEG made contact with 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,” for money owed to Lost Lands. “Ms. Bashi further stated that this was an unfortunate scenario, and that defendant was hiring an outside company to help consult on how to wind down operations (Id.), making it clear that Defendant had become insolvent.”

On Sept. 18, an LA Superior Court judge overseeing the Lost Lands case approved the festival organizers’ request for a writ of attachment, allowing organizers to seize Lyte’s property before a judgment is entered, ensuring that Lyte’s assets are available to pay Lost Lands the $330,000 it is owed.

The failed payments come with significant risk for festivals, managing director of APEX Event Management Brett Abel said in a declaration filed in LA court, writing, “APEX 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 ticket sales,” increasing the risk that APEX would “suffer a loss from the festival rather than break even or to make some profit.”