Over the years Coachella has brought in millions of dollars for Indio, CA and the profit stream is growing for the desert town. (Creative Commons)

It’s a brisk, dreary day in Seattle, but Gabby Chandler, 28, and best friend Melissa Ramos, 27, are bracing for their yearly trek to the desert plains of Indio, Calif., about 1,000 miles south.  The two are getting ready to head to the sold-out 2014 Coachella Valley Music and Arts Festival, opening April 11, for the tenth time in a row. 

“We’ve been to Coachella so many times now that’s going doesn’t even feel like an option anymore,” Chandler said. “It’s like our thing; it’s tradition.” 

The two friends went to their first Coachella festival in 2004, when they were both freshmen at Washington State University. Since then, they’ve graduated, gotten full-time jobs and become “real adults.” However, one thing that remains constant is their dedication to making the weekend event happen every year, no matter how expensive it becomes.

“Over the years, we’ve definitely spent thousands of dollars between festival passes, transportation and just surviving the weekend in general,” Ramos said. “It’s totally worth it, but I do wonder like where is the money going?”

As the Coachella’s popularity and exposure have developed, the ticket prices have had a mass increase in price scaling and have more than doubled. A weekend with all the amenities can cost up to $6,500 for two people.  Nevertheless, it has become one of the most popular destination music festivals in the world and is consistently amongst the highest grossing.  

But, as Melissa Ramos asks: Where are the millions of dollars in income going? 

During the show’s October, 1999, inaugural event, general admission tickets were sold for $50 a day or $125 for the entire weekend. With about 25,000 attendees, the income wasn’t nearly enough to compensate for the production costs. As a result Coachella promoter, Goldenvoice, lost more than $750,000 in expenditures and even skipped the show in 2000. When it returned in 2001, prices had already increased to $65 a day and $140 for the weekend.  The show had also moved to April, kicking off festival season and spanning two weekends. 

Goldenvoice is located in Los Angeles and is a subsidiary of the private media giant, Anschutz Entertainment Group (AEG), which owns the Staples Center, L.A. Live and the StubHub Center amongst others worldwide. Currently Goldenvoice promotes for dozens of Southern California’s most popular venues including The Shrine Auditorium, El Rey Theatre and Club Nokia. The company’s yearly profits are estimated at $145 million; a large portion of which comes from Coachella. In ticket sales alone the festival will bring in more than more than $62 million in 2014.

However, despite the seemingly massive cash flow, a large portion of the festival’s initial revenue goes directly to the site planning and general organization of the show.

“There’s a lot that goes into making sure that a festival not only happens but goes well,” Leo Nitzberg, Goldenvoice director of festivals, said in a recent interview. 

As a destination festival, which also has on-site camping, the cost for variables such as stagehands, insurance and security can get extremely expensive.  Between both weekends, Coachella can cost Goldenvoice up to $12 million in production expenses before it even begins. A significant, yet undisclosed amount of the finances are also used for the talent budget. 

“Dealing with all of the elements like providing free water, covering staffing in Indio, procuring the best talent; all of these things come at a cost and in order to provide the experience you have no choice, but to upsell the show itself,” Nitzberg added.  

And that term may be the secret to Goldenvoice’s success. 

For the past few years, Goldenvoice has stopped selling individual day tickets in exchange for weekend general admission passes starting at $349 per person.  However, they also offer more six different packages that can cost up to $6,500 for two people.  

Along with VIP admission, the $6,500 price tag comes with a fully furnished “safari tent” including air conditioning, private bathrooms, concierge service and many other amenities. 

“The safari tent is almost like its own business within the festival,” Nitzberg said. “However, I think that the product meets the price. We’re providing a type of elite service that you’d be hard-pressed to find at any other show.” 

The event grounds span 280 acres of space at Indio’s Eldorado Polo Club and Triangle Bar Farms. The show itself is complete with all of the conveniences that a festival attendee could want including six main stages, seven food courts and even a full size Ferris wheel to light up the night.

It’s clear that fans agree Coachella is a one-of-a-kind experience. Despite the cost, the 2014 festival sold out in less than two hours, and estimated 90,000 attendees are expected for each weekend, April 11-13 and 18-20.

In terms of music, Coachella has always set a standard for eclectic talent with a wide range of artists from various levels of notability. Earlier shows featured indie rock, which slowly progressed into hip-hop and the inclusion of electronic dance music (EDM). This year will be no exception as the excitement builds for the headlining act, legendary hip-hop duo Outkast. The festival will be the group’s first reunion in over 10 years. 

“From a marketing and economic standpoint, Goldenvoice has been ingenious when it comes to Coachella,” Jordan Levine, an entertainment economist, said. “They’ve created a great show and also set up small things that help add to ambiance of the festival itself and it’s an entirely different revenue stream for them.” 

A proven profitable revenue stream, indeed. 

According to the Coachella Valley Economic Partnership summit report, the 2013 show attracted $254.4 million to the desert region with a third of the revenue going directly to Indio. Most of this influx of money results from large sums of hospitality and travel fees during the month of April. The tourism industry is a huge part of the Coachella experience for those attendees who don’t want to partake in camping for the weekend.   

“The thing about the festival is that it attracts people to Indio who would’ve never come here,” Indio councilman Sam Torres said. “It’s invaluable to our local businesses because they have a surge of customers spending enough in two weekends to impact their profit margins for the entire year.”

Before last year’s show it was announced that the festival would remain in Indio until 2030.  Beginning with the 2014 show, however, Goldenvoice has agreed to increase the amount of per-ticket revenue it shares with the city. In previous years, Indio received $2.33 per ticket sold. This year though, that number will rise to $5.01 per ticket sold. Doing so will increase the ticket revenue for the city from $410,000 to more than $900,000.

“Overall, Indio is in a great place by hosting the show,” Levine said. “There’s many ways that their economy has the potential to expand because they’re gaining enough capital during the festival to have a huge impact on their economy in the long term.”

In addition to money, Goldenvoice has been a philanthropic force in the Indio community. The company paid for a new gym at John Carroll and Jim O’Brien Boys & Girls Club and donates regularly to the Indio Senior Center.

The week before Coachella 2013, Goldenvoice sponsored a free medical clinic that treated about 2,700 patients and provided more than $1 million worth of services. Ideally, Goldenvoice hopes to raise another $1.8 million to keep the clinic going continuously.

“[The medical clinic] is definitely something that we want to keep doing within the area,” Nitzberg said. “It tells the residents that we’re not just here trying to suck up your city for a little while, but that this festival is a partnership and we want them to benefit too.”

As Chandler and Ramos ponder which year of Coachella was best -- they say 2008 and 2013, respectively -- and think about the financial costs they both quickly determine that at the end of the day, it’s about music fans getting what they want: a great show. 

“For me, it’s not really about where the money’s going, it’s more about what I’m getting out of it,” Chandler said. “If I leave that desert and I’ve had a good time, am exhausted and have a smile on my face, the weekend was priceless anyway.”

Reach Staff Reporter Courtney M. Fowler here, Follow her on Twitter here