This thesis investigates in which ways attributes of social capital theory such as collaboration, reciprocity and trust can further understandings of the governance of arts festivals. Unlike existing festival studies which incorporate social capital into their analysis from the sole perspective of organisers, attendees or local communities, this research focuses upon the sum of relationships between organisers and participants (defined as artists, performers, organisations and venues). The case study is LightNight Liverpool, a not-for-profit, free to attend, annual one-night arts festival organised by community interest company Open Culture. The use of a third sector festival is deliberate, with my reasoning being that the lack of payment to participants would increase the necessity of attributes of social capital to effectively programme and deliver events. The fieldwork took place between January-September 2018 utilising a mixed-methods approach to explore relationships formed within the festival, combining documentary analysis, netnography (analysing social media interactions) and semi-structured interviews. I position Liverpool's hosting of the 2008 European Capital of Culture designation within the city's contemporary use of culture as a central component of its urban regeneration strategy. Explaining Open Culture's changing role post-Capital of Culture, I examine the links between LightNight Liverpool and the trend of festivalization. I argue that through theming the programme and integrating existing creative communities and cultural quarters, Open Culture have successfully marked the festival with differentiation. Through an analysis of austerity induced cuts to arts funding, I contrast the wider pertinence of social capital theory to the day-to-day working practices of those within the city's arts and cultural sectors. Finally I contend that the tailored support provided by Open Culture to participants through their concurrent roles as programmer, intermediary and producer showcases the pre-eminence of leaders in providing access to resources and mobilising networks of contacts within arts festivals. The implication of these findings go against the majority of social capital literature which underplays the importance of leaders, with this thesis arguing their primacy as catalyst of its successful generation and diffusion.