The fact that Hulu released a competing Fyre Festival documentary five whole days before Netflix dropped its own doc was not the only surprise for people who can’t get enough of the luxury-festival-turned-disaster. Those who delighted in the viral story back in 2017 likely knew little about Fyre founder Billy McFarland’s credit card, Magnises, which becomes one of the unlikely stars of both of the new documentaries. Here's a look at the company whose demise didn't get quite as much attention.
How It Started
McFarland's entrepreneurial ideas started early. He dropped out of college before finishing his freshman year to launch his first start-up, Spling, but after that failed, he tried a new venture: Magnises. He wanted to improve the regular plastic credit cards he and his friends used around Manhattan by transferring his debit card strip onto a sheet of metal. It worked, and he created a make-shift version of American Express' black card — the prototype for Magnises.
What It Was Supposed To Do
The company launched in March of 2014, according to Billboard, and in addition to acting as a “black card for 20-somethings,” the card was also meant to get members exclusive things like access to the Magnises townhouse in SoHo, private parties, and discounts on luxury and designer items. Membership, which cost $250 annually, was also supposed to include a car and driver and a 24/7 concierge to assist users in getting tickets to big events. Plus, the American Express Black Card requires an income of at least $250,000 per year, whereas Magnises didn’t. It was marketed as a status tool for wealthy millennials, but one former employee, Emily Boehm, says in the Hulu documentary that it was actually more for those wanting to join an “out of college frat."
Why It Didn't Work
Fyre Fraud includes interviews with journalists who covered Magnises and the company's former employees, and more than one person likened Magnises to madcap NBC sitcoms about ineffective workplaces. Boehm equated McFarland and VP of Marketing, Grant Margolin, to Michael Scott and Dwight, respectively, saying “When Billy and Grant got connected, it was like The Office, except with no redeeming qualities.” Another voice can be heard saying, “When I think about Magnises, I think about Entertainment 7Twenty [from Parks & Recreation]. There is no actual business, it’s just guys being in business.”
To be more specific, though, the company promised to get exclusive tickets to things like Beyoncé and Jay-Z concerts or Hamilton, but often didn't followthrough with the actual tickets. Events were often cancelled last minute and the number of actual members was unclear, despite McFarland's numerous claims that membership was growing, according to a Bloomberg report on Magnises. With numerous customer complaints and conflicting membership stats, it was increasingly difficult to measure the company's actual success.
What Actually Ended The Company
McFarland used connections in Silicon Valley, investors, and marketing agencies with good pull and got celebrities to endorse Magnises, including Wale, French Montana, and Ja Rule. Ja Rule was given the title vanity "Creative Head," even though he had nothing to do with the actual business of the company, according to Boehm's statements in the Hulu doc. And while those moves appeared to keep Magnises afloat for a time, McFarland's public failure with Fyre Festival seems to be what brought the company down entirely. Magnises' social media pages are live, but haven't been updated since March 2017, the month before the festival disaster, and the card's official website is no longer live. Magnises.com simply loads as an error page.
Now, he's is in prison for multiple counts of fraud and McFarland's 2018 court documents (available in total on the Securities and Exchange Commission's website) include the following charge: "McFarland’s offering fraud and materially false and misleading statements and omissions were purposefully designed to make Fyre Media, Fyre Festival, and Magnises appear more successful and financially strong than they actually were, to tout McFarland’s management expertise and oversight of Fyre Media, Fyre Festival, and Magnises, and to induce investors to invest tens of millions of dollars into McFarland’s companies."
Even if the members-only card had survived the PR disaster that was the Fyre Festival, it didn't exactly stand a chance against details like that.