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WHAT IS THE FINANCIAL IMPACT ON A MUSIC FESTIVAL DURING COVID-19 PANDEMIC?

Since the start of the Covid-19 outbreak in the United Kingdom, the music industry has been hit hard. Many festivals would not be covered by their insurance for cancelling their event if they did not take out extra insurance before 1st November 2019 for contagious diseases. Only those who were affected by outbreaks such as foot and mouth would have done so and even then, there is a very thin line on insurance companies paying out on covid-19 at all.

A lot goes on behind the scenes that the general public wouldn’t know about but I felt would appreciate a more clear explanation on. I will say that this is from personal experience working at other festivals over the last 15 years as well as being Festival Director for Breaking Bands Festival so not guess work but actual facts.

Firstly, for a festival to financially be viable the biggest income is usually in ticket sales. Breaking Bands Festival obviously relies heavily on ticket sales to fund the event. Never being about profit, BBFest breaks even each year after paying all the bands a fee, the toilets, security, venue, insurance, skip hire, marquees, sound and staging and so much more that makes up the cost of running the festival.

All the contractors require deposits, some are paid 6 months in advance which is why festivals are always pushing for early bird ticket sales as that helps them on paying out deposits. Every ticket sold after the festival weekend comes with a transaction fee. Typically this would range from 80p to £1.50 per ticket which our festival takes on as part of the ticket price rather than asking for the fee on top. Some festivals ask for a fee and some are considerably higher due to the fact they use 3rd party ticket selling sites who charge their own fee on top of the transaction fee. BBFest is fortunate as we do everything in house so we only have to pay the small transaction merchant fee.

So when it then comes to the time, usually 4-6 weeks before the festival where all contractors want their balance paid, this is where some festivals buckle because they have not covered their outlay in sales because of poor early ticket sales or high costs. It can be for many other reasons but these are typically what I have seen personally. Again, BBFest is very lucky in this department as we paid for the first year festival from savings before a ticket was sold so that the money received can move forward to the next year and we’d always be ahead but its not always possible for some festivals to do that.

So when we saw the lockdowns across the world were coming and the pandemic was heading towards the UK, we knew we would have to cancel Breaking Bands Festival. Its a once a year event so we really did not want to but it was becoming more obvious that we would have to do this.

We then had to decide what happens next. Could we try and re-arrange for later in the year? Well, without a crystal ball we couldn’t as that would entail more costs, more commitments and could still get cancelled if the outbreak of coronavirus has not stopped in the UK. Not to mention the inconvenience to customers who may not get that time off work, may have other plans and of course bands that may not be able to commit to the new date, the suppliers may have other events on etc. A logistical nightmare for a festival to deal with but a decision has to be made as quickly as possible. We decided to cancel this year and put the festival forward to the same dates in 2021. Still, that needs time to arrange to make sure the date is free, the suppliers and contractors are available and the big question, would they move our deposits and honour them for 2021 instead?

The financial implications at this point are truly worrying. You know many will want a refund, you know not all suppliers will want to refund you, some will even chase a balance no matter that there is a world health crisis. We had to get all this into context. Again, this all takes time and something the customer wouldn’t know is going on, just the fact that festivals are cancelling so they want their money back.

Fortunately for Breaking Bands Festival we have a fantastic community who fully understand and were not over demanding when we said please bear with us regarding refunds. Firstly we asked the community who would want a refund vs their ticket transferring to 2021 and amazingly, 95% were happy to transfer their tickets. This meant we could take the small hit on the suppliers not wanting to refund us or transfer our payments to next year, take a hit on refunding customers without getting the transaction fees back and not only that, paying another merchant fee to give the customers a refund.

BBFest has come out of this relatively unscathed but it may not be so lucky for other festivals. So, please always consider there is a lot more going on behind the scenes that you may not know. Its not as simple as a straight refund when if everyone asked for a refund, our festival may have been in a very difficult position on going ahead next year due to the losses incurred. Its not your fault as a customer and no one blames you. These are very difficult times for everyone and a lot of people are losing money from their jobs, their businesses and their holidays. We are a very transparent festival. We never have anything to hide and that is why we have the respect of our customers along with their faith in us putting on a great festival weekend. I hope this blog will help people understand what we go through before making any decisions that could have put us out of business and it helps you see things more clear to what other festivals may be facing right now.

Jay McGuire – Festival Director.

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