The NSW Government pulled its landmark investment in SXSW Sydney before the organisers cancelled the event, cutting the festival short just three years into a five-year deal.
Mumbrella understands that Destination NSW, which signed a $12 million agreement in 2022 to host five events between 2023 and 2027, invoked its break-fee clause to exit the contract early.
The Texas-founded SXSW had been intended as a major drawcard for international visitors, and was intended to inject millions into the NSW visitor economy.
Originally signed by a Liberal NSW government, the Labor government’s decision to end its SXSW contract comes just a year ahead of the next state election. The state recorded a $5.1 billion deficit for 2024‑25.
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Destination NSW declined to comment on whether any remaining funding for SXSW Sydney would be redirected into local events.
In a statement to Mumbrella, a Destination NSW spokesperson said: “SXSW Sydney has played an important role in showcasing Sydney’s creative and innovation sectors; however, the decision has been made not to proceed with the event in 2026 and 2027.
“The event has delivered cultural, economic and industry outcomes for the city over the past three years. Following a review, it was agreed not to proceed with the event in 2026 and 2027. Destination NSW will continue to support a diverse, year-round calendar of major events that drive visitation and deliver benefits for NSW communities and businesses.”
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Despite the cancellation, Destination NSW has set ambitious targets for visitor expenditure over the next decade.
After recording $59.4 billion in the last financial year, the department is now aiming for $91 billion by 2035.
Its most recent annual report noted plans to refresh event assessment and investment processes to “ensure funding attracts visitors and delivers economic benefits for Sydney and NSW”.
The inaugural SXSW Sydney festival launched on 15 October 2023, featuring guests including Nicole Kidman, Baz Luhrmann and Chance the Rapper.
For more than 20 years prior, the festival, dedicated to film, entertainment, culture, education, and technology, had been hosted solely in Austin, Texas. Last year, the conference launched its second international event in London.
Speaking to Mumbrella, Murray Hurps, chairman of the Australian startup event Spark Festival, which received $80,000 in NSW government sponsorship in 2024, said: “It’s good to see consideration made to the state’s spending, but the question is what the NSW government will spend that money on instead?
“If they do nothing, they will have to be prepared for the looming productivity crisis, but it is unsurprising to see the government focus on more priority areas while there are budget pressures.”
Alongside Destination NSW funding, SXSW also received support from the City of Sydney, including $300,000 in cash across three events and $369,533 in value-in-kind, a third of which covered the venue fee waiver for the 2025 event. The city council had budgeted an additional $100,000 per year for SXSW between 2026 and 2027, plus $424,000 in non-monetary support.
Pricewise, tickets to last year’s event started from $295 for a day pass or full-week access passes starting from $495 for its 1,600 sessions.
In a joint statement, SXSW Sydney co-managing directors Simon Cahill and Jono Whyman said the organisation had “worked closely” with the NSW government and SXSW’s global owners, Penske Media Corporation, to explore potential pathways for the festival’s future.
“SXSW Sydney would not have been possible without our partners, Destination NSW and SXSW, as well as our speakers, sponsors, volunteers and attendees,” they added.
In a LinkedIn post, Whyman further reflected on the closure of the project, acknowledging the disappointment: “It’s not the ending any of us wanted, but I’m incredibly proud of what we built together over the past three years.”
He also pointed to some of the event’s achievements, including 2025 attendance of more than 345,000, $276 million in “economic impact” over three years and “35% year-on-year growth in international visitation”.
While the cancellation of SXSW Sydney drew widespread disappointment online, not all reactions to the festival’s three-year run were positive.
Jessy Wu, the founder of Sydney-based communications agency Encour, posted on Linkedin that she was “glad to see the back of” the conference, adding: “To me, it was a scourge that hoovered up government funding, sponsorship, attention from corporates and [learning and development] budgets… all while delivering a conference that was, frankly, quite lacklustre.”
“The term ‘rent-seeking’ was coined by economist Anne Krueger in the 1970s. It refers to attempts to obtain economic rent (income exceeding what’s necessary to keep a resource in its current use) through manipulation of the social or political environment,” she continued.
“SXSW Sydney was, in my view, a classic example of rent-seeking. The conference took millions in public funding earmarked for driving tourism and innovation, and optimised for extracting value from a community they didn’t build.”