The Sydney Gay and Lesbian Mardi Gras has revealed it has suffered a massive net operating loss of $1.2million for the 2023-24 financial year, despite receiving funding from the City of Sydney and the NSW Government. 

The figure marks the first deficit for the festival since 2020 and its largest since their digital records began in 2010.

It comes after the City of Sydney handed out $250,000 in free rent over a two-year-lease.

The council also teamed up with the state government to give the not-for-profit organisation $1.1million in August to bail the festival out of a budget shortfall. 

The festival, which is run by an elected board of directors, marked a high point in 2023 after it recorded a $1.6million profit after a super-sized program as part of Sydney WorldPride.

The 2025 program will be scaled-back to ensure the financial viability of the festival.

A Destination NSW spokesperson said the cash boost was a recognition of the significance of the event held in the harbour city. 

‘The NSW Government’s decision to work with the City of Sydney to provide a rescue package reflects the festival’s stature on the state’s event calendar,’ the spokesperson said. 

‘[It] not only celebrates Sydney’s diverse, inclusive and creative community, but is also a key driver of visitation to our city,’ 

The organisation’s $1.2million deficit takes this recovery package into account and comes despite a record high $12.4million in revenue.

The City of Sydney council found that without the recovery package, there was ‘a risk the organisation will no longer be able to deliver its events and festivals to support this important community’.

The announcement of this outsized deficit comes just weeks after the organisation shared their slate of events for the 2025 festival, beginning from 14 February and culminating in the Mardi Gras Parade on March 3.

The all-night Mardi Gras after-party will be headlined by Grammy award-winning American electronic DJ Honey Dijon and English musician Romy of indie band The xx.

Mardi Gras’ Bondi Beach Party, a 15,000 capacity dance event on the foreshore of Australia’s most famous beach, will not go ahead in 2025.

According to the organisation’s financial report, the beachfront event suffered a loss of over $1m in 2024.

NSW Police estimated the attendance was at 5,825, which was approximately a third of the event’s capacity.

Priced at $239 per head in 2024, the beachfront dance party was held for the first time as part of the tourist-filled 2023 WorldPride.

‘Strong results from Bondi Beach Party during the Sydney WorldPride program and support by key stakeholders warranted investment as an ongoing event for SGLMG, that would allow us to continue to develop high quality celebration events for our communities into the future. Our reserves allowed us to take this risk,’ a Destination NSW spokesperson said.

Sydney Gay and Lesbian Mardi Gras did not respond to specific questions relating to the success of the Bondi Beach Party, but committed to ‘a more conservative budgeting approach for 2025, emphasising sustainability over expansion’.

Smaller and medium scale community-focused events like a transgender and gender diverse boat party will return in 2025, as well as Ultra Violet, a day-to-night party for LGBTQIA+ women hosted at the National Art School.

The organisation explained their 2024 deficit as ‘a perfect storm for live events, affecting not only Mardi Gras but the broader live events sector in Australia’.

‘The weakened Australian dollar, inflationary pressures, and shifts in discretionary spending created an extremely challenging environment for the entire arts and culture sector,’ a spokesperson for Mardi Gras said.

A major setback for the festival was the forced cancellation of Fair Day, which was announced during the set up for the event.

The cancellation was due to Sydney’s crisis of asbestos-contaminated mulch across the city, including Fair Day’s home at Victoria Park. 

Mardi Gras stated that the cancellation of Fair Day ‘eliminated key revenue streams, such as bar sales and donations, and disrupted the festival’s momentum.

The organisation’s financial report attributed a $653,000 loss to the cancelled Fair Day, excluding potential run-off impacts on other events.

The festival also noted the tragic deaths of community members Jesse Baird and Luke Davies as a challenge.

Other challenges included cost-of-living pressures and rising production costs, with some expenses rising by 20-40 per cent  according to the Mardi Gras.

According to Mardi Gras’ 2024 financial report, major unexpected costs incurred were $3.37million on personnel, a 16 per cent increase from what was budgeted and $1.74million in infrastructure, which was 23 per cent higher than budgeted.

‘Each of these challenges on its own would have been manageable, but together they converged to create a series of compounding pressures,’ a Mardi Gras spokesperson said.

The organisation has stated a commitment to long-term financial viability, implementing a more conservative budget for 2025. 

This includes a 20 per cent reduction in staff costs and a more community-focused approach to programming.

The 10,000 capacity official Mardi Gras after-party in 2024 also took on a loss, operating at a $300,000 deficit.

Minister for the Arts and Minister for Jobs and Tourism John Graham said ‘Mardi Gras had a tough year in 2024, but it was great to see the parade proceed’.

‘The Mardi Gras Parade is an important expression of the diverse and welcoming character of Sydney,’ he added.

‘The NSW Government has proudly supported the Parade since 2009.’