Gay Pride festival heads for financial fall

The future of the annual London Lesbian and Gay Pride festival, which claims to be the world's largest free music event, attracting more than a quarter of a million people, has been thrown into serious doubt by the voluntary liquidation of the festival's organiser, The Pride Trust.

The situation is not new. Pride has always lurched from financial crisis to crisis - the Pride Trust itself was set up five years ago after the previous organisers went bankrupt. Since then, the company, which relies heavily on volunteers, has managed to deal with accumulated losses by encouraging suppliers and sponsors to pay in advance for the following year. This year's event, which was overbudgeted by pounds 80,000, inherited a rollover deficit of over pounds 100,000 from last year.

"Pride needs a clean slate and the Trust is not prepared to defer the deficit for yet another year," said Rachel Smith, chairperson, who is likely to make an announcement next week. "In August our figures showed we had made enough money this year to clear the deficit. But a number of additional invoices have since come in, including things we were not prepared for, such as pounds 40,000 in lost equipment, some higher than expected invoices, and some sponsors paying us less because things didn't go to plan."

Teddy Witherington, The Pride Trust's company secretary and festival producer, who left the organisation this summer to work in the United States, blames "power struggles within the Pride Trust", with "too few people making too many decisions", and the fact that the Trust has failed to raise new sponsorship deals over the past four months.

"Pride has become a monster that's got out of control," said Kim Lucas, the woman behind Summer Rites, set up two years ago as a commercially based alternative festival for gay Londoners. She blames this year's losses on a lack of contingency money set aside for "those extra expenses which always crop up".

Whoever is to blame for the current crisis, it is likely to bring to the surface a rift in the community based on different philosophical approaches to the event. Trust directors are hoping to find volunteers over the coming weeks to develop a new community-based, not-for-profit organisation which could oversee a scaled-down festival next year.

This approach is in line with Pride's history of community politics. It was born in 1972 with a march of 800 members of the then London Gay Liberation Front. Over the past few years, Pride has grown substantially year-on-year, becoming a commercial event attracting big-name pop groups and mainstream businesses such as United Airlines, Holsten Pils and Evian, who put up a total pounds 200,000 in sponsorship this year.

"It has been run by well-intentioned amateurs, which perhaps was okay when it was small, but when you're talking about up to 500,000 people you've got to run it differently," says John Holding, who has acted as the Pride Trust's auditor since 1994. Mr Holding, and others within the community, believe it is time to develop a profit-based consortium of businesses to run the show. He warns: "The danger is that if we don't do it, then purely commercial interests will end up taking control."