Festival cancellations happen for a variety of reasons, and lately it’s no surprise, the major cause of cancellations has been the worldwide pandemic COVID-19, also known as the Coronavirus. Due to public health concerns about the COVID-19, SXSW in Austin, Texas and the major EDM festival Ultra Music Festival in Miami have been cancelled. Coachella, has also been postponed from April to October 2020. In addition to those, a long list of live music events and gatherings around the world have been affected. No matter the updates in the coming few weeks, the virus has taken a huge hit on the music festival industry in 2020.
Regardless of the reasons behind the cancellations, these have financial repercussions for everyone involved from the artists, fans, staffers, vendors, to the festival organizers themselves. What happens afterwards greatly depends on the insurance coverage and if the cancellation was voluntary or by some external force (institution, government…etc). The most important of details being the specific contract details between promoters and artists.
In short, it all depends on what the contract says. But in the case of the coronavirus-related cancellations, things may be quite different. Especially if a local or state government has caused the shutting down of any events from taking place, as in the case of SXSW and Ultra, which were shut down in response to mandates from the Austin and Miami mayors. It is important to note that the public health safety is always a top priority.
So what is the process for making such a heartbreaking call?
Note: Please make sure you’re always washing your hands, and following the WHO‘s recommendations on staying safe and keeping others safe.
Caused by unforeseeable events
Sports and entertainment lawyer, Tim Epstein, explains that government-mandated festival shutdowns may trigger “force majeure,” a contract provision that lets people off the hook for their obligations under the deal if there are certain unforeseeable circumstances, such as a natural disaster or in our case, a global viral pandemic.
Simply put, the parties are basically returned to their position pre-contract. Of course, the work done up to that point will be the exception, the production team that worked and produced whatever part of the project will usually be reimbursed for the job done so far. In these festivals, the majority of the work is done on the day of the event, so most of the contracts for that work will not be paid because these will not happen due to the “force majeure” and the cancellation. The performance did not occur, so the payment will not be fully processed. Some artists require a down-payment prior to accepting the terms of the contract. These will have already been paid in this case. Each payment agreement is different and depends on the booking agency.
“Organisers need to uphold four licensing objectives under the Licensing Act, and one of those is public safety,”
says Jon Drape, managing director of Ground Control Productions and the festival director of Derby’s Y Not festival.
The most pressing of issues facing any cancelled festival is refunding buyers and partners. It should be relatively quick when the event is entirely cancelled and has cancellation insurance. The payback usually happens in a matter of weeks, not months. Festivals always want to keep good relationships with all their suppliers and production partners and they don’t want them to go under. So, the payment processing for this side of the business is usually a long process that takes months to reconcile.
Artist & Festival Insurance
The second most important thing is the insurance policy. In order to be covered for communicable diseases, event organizers need to pay additional money for that specific protection from their insurance provider and recently, insurance companies have stopped providing coverage for COVID-19 no matter the situation. SXSW revealed recently that even though they were covered for terrorism, weather and other catastrophic situations, COVID-19 and viral pandemics were not part of their coverage. Lacking such insurance, like in this previous case, will cause the festival organizers to incur out-of-pocket expenses for things like staffing, marketing and logistics even if their payments for performers are covered under a force majeure clause in their contract.
On the other hand, artists also have cancellation insurance options in place, but due to the fact that pandemic situations are rare occurrences, they are not likely to be covered for them. Paul Langer, a lawyer who represented Lady Gaga’s touring company, states that “if they don’t already have infectious disease coverage as of, say, the last few weeks, they’re way too late to get it going forward.”
But we all know that in many cases, insurers will try to avoid paying for such cancellation situations.
Let’s Talk About The Fans
Fans everywhere are definitely disappointed for the cancellations of these major EDM festivals that they were all so eager and looking forward to attend. And as is the case with the artists, fans should also read and understand the fine print on their tickets. In the case of SXSW, the festival usually has a no-refund policy. But in the case of the Coronavirus, they offered the fans a badges for future events. Miami’s Ultra Music Festival also offered credits for festivals later in the calendar but those may prove to be exceptional cases. For the most part, ticket holders will usually get refunded. Travel costs and lodging outside the festival premises are another issue and subject to the other companies’ rules and regulations.
Economic Impact
The fallout from a large festival, like SXSW for example, will be felt for months if not years ahead. In 2019, the festival brought $356 million to the city of Austin as over 100,000 people came for the tech, film, and music events. As the Texas Monthly reports, “caterers, pedi-cabbers, ride-hailing drivers, bartenders and servers, tech crew and security staff” are all the shadow economy of the SXSW festival and will lose a sustainable part of their annual income. When it comes to major EDM festivals as well like Ultra Music Festival, the impact is huge. The city of Miami has estimated the the festival “generated approximately $995 million of economic impact” since 2012, with $168 million in 2018 alone.
“The City of Miami recently finalized an agreement with ULTRA that will bring the event back to Bayfront Park in March 2020, along with thousands of visitors from around the globe and an estimated $223 million economic impact on the local economy,”
a spokeswoman for the City of Miami told NBC 6.
Take a moment and imagine that, having $223 million in economic impact taken away from your city so abruptly.
On top of that, these festivals employ a large number of people around the year. Some of whom will be laid off for sure in the coming weeks. The terminations will definitely include people from departments across the board.
The organizers for all these festivals, and more big names like Electric Daisy Carnival, as well as artists with spring and summer touring plans, will now just have to hope that the rate of new COVID-19 cases and deaths slows before they have to follow in the footsteps of SXSW, Coachella (which postponed to October 2020), or Ultra Music Festival.
Moving Forward
What happens next remains to be seen. Artists will surely be counting on the support of the fans even more than usual, perhaps through non-concert avenues like merch sales and streaming numbers on Spotify and iTunes. Some artists like trance superstar Myon have asked their audience to buy their music and try to help out after months of being locked in their studios working on new materials. With these cancellations, the artists will have a lot more time on their hands to create even more music for the upcoming months.
The vendors and stand owners who work at these festivals will take a major hit as well (in addition to their families and surrounding circles).
On the other hand, where festivals continue to take place, for whatever reason, it’s normal to expect some addtional precautions in place. Event organizers and major show producers should start working on ways to reduce risk; adding trained medical and health workers on site at the festival, additional sanitizing precautions and products, and stricter health regulations in place.
Billboard has compiled an ongoing list of major events that have been postponed or canceled due to the outbreak:
Note that the below list is from Billboard doesn’t include only dance-music related events:
March 9 – Madonna’s Madame X Tour has come to an abrupt halt due to new restrictions on public gatherings implemented in France amid the COVID-19 virus spread.”Following official notification from the Office of the Police this morning prohibiting all events with an audience attendance of over 1000, Live Nation regrets to announce the final two Madame X performances previously re-scheduled to 10-March and 11-March are forced to be cancelled,” reads a note on Madonna’s site.
Pearl Jam was scheduled to kick off its North American tour on March 18, but the four-month long run is postponed amid coronavirus fears.
The 2020 editions of Coachella and Stagecoach will need to be moved to later this year, or canceled altogether, admit organizers Goldenvoice.
Though they are forging ahead with their End of the Road tour, Kiss manager Doc McGhee tells Blabbermouth that the band’s members have been advised to temporarily scrap all fan backstage meet-and-greet events.
March 5 – Louis Tomlinson tweeted to fans that the President of the Council of Ministers had decreed that his March 11 show at the Fabrique in Milan has been called off.
Queen and Adam Lambert notified fans that the group’s planned May 26 show at the AccorHotels Arena in Paris has been postponed “following a government decree in France to cancel all indoor events over 5,000 capacity in France until 31st May in an effort to contain the spread of Coronavirus.” The band said they are working with the promoter to reschedule the date and will announce a new one soon.
Organizers of Tomorrowland Winter in France announced that they have canceled the 2020 winter edition of the electronic dance music festival due to health concerns connected with the spread of COVID-19, the respiratory illness caused by the coronavirus. Tomorrowland Winter 2020 was set to run March 14-21 at the French alpine ski resort of Alpe d’Huez Grand Domaine Ski.
March 4 – Ultra Music Festival’s flagship Miami festival scheduled for March 20-22 has been called off, according to city officials.
March 3 – Maluma has postponed his upcoming concert in Milan amid the outbreak in Italy.
Feb. 25 – The Korea Times Music Festival announced that its concert scheduled for April 25 at the Hollywood Bowl in Los Angeles “has provisionally been postponed due to the increasing uncertainty threat of coronavirus.” The annual musical festival, which is in its 18th year, had already announced the likes of K-pop girl group MOMOLAND, solo singer and former Wanna One member Ha Sungwoon and rock band No Brain.
an. 31 – Three stops on GOT7’s world tour “Keep Spinning” tour were postponed including their concerts in Bangkok planned for Feb. 15 and 16 at Rajamangala National Stadium and a concert in Singapore planned for Feb. 22.
K-pop group TWICE’s Tokyo fan signing events set to be held on Feb. 1 and 2 were canceled.
The inaugural C.E.A. (Charming Eastern Awakening) Fest at Joy Park in Chengdu in China scheduled for April 18-19 is canceled. The event was set to headlining performances from Martin Garrix and Dimitri Vegas & Like Mike.
Jan. 28 – Cantopop singer Leon Lai postponed his two shows in Macau, China. Lai’s Leon Metro Live 2.0 concerts were originally slated for Jan. 31 and Feb. 1 at Studio City Event Centre.
Promoter Live Nation announced the postponement of Miriam Yeung’s Feb. 8 concert in Singapore. The show, which was slated to take place at the Singapore Indoor Stadium, is postponed indefinitely, due to the travel and freight conditions in China.
Jan. 26 – Canto-pop singer Andy Lau canceled 12 concerts scheduled throughout February at the Hong Kong Coliseum. The My Love Andy Lau World Tour Hong Kong 2020 was scheduled to start on Feb. 15 and end on Feb. 28. Lau said in a statement, “Sorry about this. I wish that everyone will remain healthy. And that we get through this difficulty together.” According to the South China Morning Post, more than 100,000 fans will be impacted by the cancellations.
Jan. 24 – The Chinese government has closed the Mercedes-Benz Arena indefinitely. The venue’s promoter and its joint-venture partner, a media group owned by the Shanghai government, have postponed over a dozen shows until the virus is contained.
Although the outlook for live events doesn’t look good at the moment, it is important not to view these cancellations as a threat. Things happen, and then life eventually goes on. What is happening now involves the whole world and levels the playing field. As music festivals turn from a state of pounding beats to a gloomy air of uncertainty, let’s all hope things get better as soon as possible. For the time being, wash your hands, abide by all the regulations our government and health officials are putting in place and let’s hold on for one unexpected bumpy ride ahead.