He said the Big Day Out should never have gone ahead that year.
"We had it all stacked the wrong way. We'd been talking about the viability in New Zealand for five years leading up to that ... You get into a position where you think, 'It's not viable, we shouldn't do it'.
"But we were committed so we followed it through."
The 2012 Big Day Out was initially billed with the double headliners of Soundgarden and Kanye West. But Kanye was pulled from the New Zealand line-up after tickets went on sale, resulting in what the promoter called "a backlash" from fans.
"I definitely shouldn't have carried through with the show once the backlash was there, but that was part of the blind thing of 'The show must go on' ... it lost $1.5 million."
He said New Zealand's Big Day Out festivals were "scary as hell" because "no one bought their tickets until the last week, which is a fairly 'New Zealand' thing".
West said the New Zealand leg of the 2014 Big Day Out - on January 17 at Western Springs Stadium and Park - had been reorganised to make it viable.
"We've gone into this one on the basis that it has a stand alone budget and we've pulled everything into line. We've negotiated the artist's fees down specifically for New Zealand and explained that it's New Zealand dollars over there.
"We've had to reinvent the process to create a viable event."
Read the full interview here and check out the full 2014 Big Day Out line-up here.
* See todays's TimeOut for extended coverage on headliners Blur, Pearl Jam and Snoop Dogg. And Big Day Out promoter Campbell Smith will be joining us for a live chat at 12.30pm.
- nzherald.co.nz
