This morning, One Reel and the international music and sporting event promoters Anschutz Entertainment Group (AEG Live) signed a deal to keep the Bumbershoot festival going.

This partnership—which includes the AEG facility Showbox Presents—comes after months of speculation and indications that One Reel has been in serious financial trouble, including layoffs, stagehands and other workers saying they have not been paid for the 2014 festival, and a slide in assets.

Heather Smith, who worked with One Reel between 1995 and 2007, returns to replace Jon Stone as executive director. Stone will remain with One Reel working on other projects. "He’s got some incredible institutional knowledge, over 25 years of history working on One Reel events," she said.

One Reel will remain a nonprofit, Smith explained, while "AEG is going to be backing the festival financially. Because of their size, they'll be able to take risks in a greater way than a small non-profit can and we can focus on the mission of the festival and what makes it so unique." Smith emphasized that the new arrangement was more like a "coalition" than a partnership, and One Reel will also be working with the city's Office of Arts and Culture, Office of Film and Music, and the Seattle Center.

As for One Reel's debt—and the people who are currently unpaid, including people who worked at this year's festival—Smith said, "I am not at liberty to disclose that... but it is important to meet with all the people who've been working with this festival and make sure they're taken care of."

In the future, she said, AEG and One Reel will divide up revenue generated by the festival. But for now, "because of the situation, AEG is going to need to recoup costs—helping us out with the people we are needing to resolve our financial issues with. It’s going to take awhile."

After a few years of focusing on big, expensive, marquee names (the often-cited example is Bob Dylan), One Reel had been trying to return its focus to the Northwest cultural scene. Smith says she intends to keep going in that direction, but that AEG will have some curatorial influence.

"We're going to work collaboratively," she said. "What we’re trying to do with AEG is take advantage of their strengths. They will be able to help programming the larger national acts and looking to us to maintain the essential character of the festival. Its a partnership that allows us to dig in deep."

She cited AEG's work with the New Orleans Jazz and Heritage Festival—a partnership that was begun in the difficult year after Hurricane Katrina—as an example of AEG's willingness and ability to work with festivals that have a long history of reflecting local interests and culture.

Though she was unable to talk about specific numbers, Smith says last year's festival was considered an artistic success but was financially harrowing for a variety of reasons, including ticket sales. "It's hard to Monday-morning quarterback what happened," she said. "There's not a lot of give on ticket sales. It doesn't take much to be off on that—and it can be a pretty big off. It was a very challenging situation."

Smith couldn't confirm whether other potential partners had been approached, but said that One Reel's negotiations with AEG have been ongoing for months. "There were a number of conversations happening," she said. "But Seattle's iconic event, Bumbershoot, is really an important part of our community—an essential part of the cultural fabric of the city."