A Denis Desmond and Live Nation backed joint venture firm received a €36.6 million Covid-19 insurance pay-out for the cancellation of the 2020 Electric Picnic and other major music festivals.
New accounts for LN Gaiety Holdings Ltd also show the joint venture has paid out £48.3 million (€57.7m) for Denis Desmond’s MCD Productions.
The accounts for the UK-based Live Nation’s and Mr Desmond's LN Gaiety Holdings Ltd outline details of the deal, which have been under wraps until now.
It was first announced in August 2018, but was not formally given the green light until February 1st 2020 as it had to be approved by competition authorities here and in the UK.
Mr Desmond and other shareholders in his Gaiety Investments stood to effectively receive around half of the proceeds at £24.15 million from the deal as they retain half a shareholding in MCD through their 50-50 venture with LN Gaiety Holdings Ltd.
Electric Picnic
The accounts also reveal that LN Gaiety Holdings Ltd in 2020 received a Covid-19 insurance payout of £30.6 million (€36.6 million) concerning cancelled events for Electric Picnic and the Reading, Leeds and Latitude music festivals for the pandemic hit 2020.
Concerning the MCD deal, a note attached to the accounts states that the purchase was funded by shareholder loans “which are yet to be settled”.
The deal details also offer a rare insight into the finances of MCD Productions as it has unlimited status here and therefore not required to file annual accounts at the Companies Office.
The section of the accounts dealing with the purchase show that the £48.3 million purchase price was arrived after putting ‘fair value’ of £26.1 million on assets acquired and goodwill on acquisition of £22.19 million.
The fair value of assets consisted of MCD cash funds of £36 million, debtors of £13.2 million, net assets acquired of £32.1 million, tangible and intangible assets of £317,271 offset by creditors totalling £49.25 million and deferred tax of £6.1 million.
Covid impact
MCD’s business was badly hit by Covid-19 in 2020 when restrictions prevented any concerts taking place from mid-March.
The impact is underlined with the LN Gaiety Holdings Ltd accounts confirming that MCD contributed £7.26 million to group revenues and a loss of £2.7 million from February 1st 2020 to December 31st 2020.
Mr Desmond declined to comment on the MCD purchase on Monday.
However, Mr Desmond did confirm that part of the £30.6 million Covid-19 insurance pay out was made concerning the cancellation of Electric Picnic in 2020.
Mr Desmond said that the payout was also for the likes of the cancelled Reading, Leeds and Latitude music festivals.
The £30.6 million insurance payout was not enough to prevent LN Gaiety Holdings Ltd recording pre-tax losses of £10.4 million for 2020 - and followed pre-tax profits of £5.87 million for 2019 - a negative swing of £16.27 million.
It recorded the losses after revenues plunged by £190.5 million or 85 per cent from £224.49m million to £33.97 million.
The business received £5.2 million in Government grants. It recorded operating losses of £5.66 million and net interest payments of £5.2 million resulted in the pre-tax loss of £10.4m.
Numbers employed by LN Gaiety Holdings Ltd reduced from 679 to 543 during the year as staff costs reduced from £20.6 million to £15.9 million.
