ID&T to sue Dutch gov over “disproportionate” restrictions
ID&T, the promoter behind festivals including Mysteryland and Awakenings, has announced it is taking the Dutch government to court over new Covid restrictions, which have been reimposed just weeks after they were lifted.
Prime minister Mark Rutte held a press conference last Friday (9 July), in which he announced that restrictions would renew on 10 July and remain until 14 August, in an effort to halt a sudden surge in Covid-19 restrictions.
Under the new measures, multi-day events will be banned and only one-day festivals will be permitted until 14 August, provided visitors are given a seat and no more than a thousand people attend.
In the press conference, Rutte said the government won’t give any more clarity until 14 August for events after that date – leaving organisers in a stalemate situation.
ID&T called the measures “disproportionate” and announced that the company would be filing a draft subpoena with the court today (12 July).
“It is our expertise to organise events well and safely and we know that our audience has the discipline,” says said Ritty van Straalen, CEO of ID&T.
“It feels like a death knell for our industry”
“We are now the good who suffer from the bad and it seems that the government prefers holidays over festivals. You can’t go into recess at a crucial moment like this and leave the industry dangling. Young people are disproportionately affected by these measures. The social importance of our industry is enormous.”
Mojo-promoted event A Campingflight to Lowlands Paradise (aka Lowlands) is due to take place on 20–22 August but festival director Eric van Eerdenburg tells IQ that the Dutch government has created an “unworkable situation”.
“For our festivals, Lowlands (20–22 August) and Down The Rabbit Hole (27–29 Aug), as well as suppliers and artists, this has created a lot of uncertainty. We are already building the infrastructure as we speak, and will continue to do so as we believe it should be possible to let them happen,” says Eerdenburg.
“Our belief is based on a constructive relationship between Mojo and the ministries of health and economic affairs, as well as the Outbreak Management Team that advises the government, we will get more clarity on how we can move on after close consultation in the next few days,” he added.
The Association of Dutch Poppodia and Festivals (VNPF) and the Association of Event Makers (VVEM) are also hoping to sit down with ministers to get a perspective on the summer season and discuss extra support measures.
In January, the government announced a €385 million insurance fund which would compensate organisers 80% of the costs of their event if it is cancelled due to state-enforced coronavirus measures.
“You can’t go into recess at a crucial moment like this and leave the industry dangling”
However, VNPF and VVEM are calling for the compensation to be increased to 100% and extended to organisers who have to cancel within an “unreasonably short period of time” but can’t claim under the scheme.
Eerdenburg says that Mojo is also pushing for the scheme to cover fees for UK artists, as well as those of Dutch and EU artists.
In a joint statement, the VNPF and VVEM wrote: “It feels like a death knell for our industry. Of course, it is understandable that measures are taken when the infection rate increases. However, within those measures, the industry that has not contributed to that higher infection rate at all is being hit hard. It was precisely our industry – the only industry in the Netherlands – that has actively sought solutions in recent months in collaboration with science and ministries.”
Fieldlab Evenementen – an initiative of the Dutch government and several trade bodies – recently revealed findings from three months’ worth of pilot events in the Netherlands show that the risk of Covid-19 infection, when following certain hygiene and testing protocols, is about the same as being at home.
According to OurWorldinData, daily cases in the Netherlands have risen almost sevenfold, from a rolling seven-day average of 49.2 per million people on 4 July to 328.7 on Sunday (11 July).
The Dutch prime minister today (12 July) acknowledged that the cabinet made an error of judgment with the rapid relaxation at the end of June. “What we thought was possible, was not possible.”
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Russian fest hit with last-minute ban loses millions
Wild Mint, one of Russia’s biggest festivals, is reportedly RUB 47 million (€539,000) in debt after local authorities cancelled the event at the eleventh hour.
The open-air festival was due to take place between 18-20 June in the Tula region, south of Moscow, but a mere seven hours before gates were due to open, local authorities issued a ban on public events due to a sharp increase in Covid-19 infections.
In a post on Facebook, producer of the Wild Mint festival, Andrei Klyukin, said the cancellation of the festival left the team in “complete despair”. He revealed that as of 2 July, the festival’s debt is RUB 47m but “90% of this amount is in tickets”.
The Association of Concert, Theatre and Ticketing Organisations (KTiBO) has called the local government’s last-minute ban “unacceptable” and is now proposing to introduce a system of regulations at the federal level in order to “completely exclude the possibility of sudden cancellations of cultural events”. The association tells IQ the details of a possible system are currently under discussion.
“Cancellation of events is not a solution to problems”
“Cancellation of events is not a solution to problems, as it entails huge losses for organisers, job cuts, loss of public confidence in the authorities and the concert industry,” reads a post on the association’s website.
“Only transparent, predictable and trusting relationships between representatives of the concert industry and the state are the key to successfully overcoming the dire consequences of the coronavirus pandemic and restoring the normal functioning of the country’s cultural life.”
Klyukin says that the festival is not bankrupt and will return in 2022. “We have the strength and desire to continue our work,” he wrote, after outlining support from fans, artists, major media outlets, the festival’s sponsors and even the local government.
Wild Mint’s enforced last-minute cancellation, similar to that of Australia’s Bluesfest earlier this year, underscores the importance of government-backed insurance schemes.
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Womad NZ secures $1.9 million underwrite
Womad New Zealand has secured a NZ$1.9 million (US$1.3m) underwrite from New Plymouth District Council (NPDC) in case the festival is cancelled due to Covid-19.
The news comes after NPDC last week announced it had renewed its host city deal for the New Zealand edition of the international arts festival, for another five years.
Following a meeting on Tuesday (25 May), the council has now agreed to eliminate the financial risk posed by a potential Covid-19 outbreak for the organiser by underwriting the festival.
While numerous countries have announced government-backed insurance schemes for live events, it’s a rare occurrence for one to be singled out for a safety net.
Mayor Neil Holdom, a long-time Womad supporter, had urged councillors to agree the underwrite, but warned them that, in doing so, they were effectively writing a cheque.
“The probability [of cancellation] I think is very low and the benefits very large”
Councillor Richard Handley added: “What’s the probability [of the festival being called off]? The probability I think is very low and the benefits very large. And we all know the benefits. Womad is a part of our DNA.”
Womad NZ typically brings more than 11,000 visitors to the Taranaki region each year and pumps $6 million into the local economy, according to the festival.
This year’s festival, which would’ve taken place in March, was cancelled due to Covid-19, but less than 24 hours after securing the underwrite the organisers have announced plans for the 2022 edition.
The festival will return to its home of 18 years, New Plymouth’s Brooklands Park, between 18 and 20 March 2022 with a programme spanning music, arts and dance.
Womad International director Chris Smith says they were intending to deliver an international line-up, along with a raft of new ideas and developments to celebrate the festival’s return.
Womad NZ typically pumps $6 million into the local economy
“2021 was such a difficult year around the world, but this partnership agreement has been central to the decision to bring the festival back in 2022,” says Smith.
“Womad means so much to the people of New Plymouth who welcome our artists into their community and the festival brings a significant investment into the regional economy – We simply can’t wait to be back here in March.”
Womad NZ will continue to be produced by Taft (Taranaki Arts Festival Trust) which has presented the festival in New Plymouth since 2003.
“Over the last 30 years, Taft has proven that we have the expertise to deliver world-class festivals and events that have positioned Taranaki as a tourist destination, boosted the local economy, and ensured that our people access arts and cultural experiences outside of the metropolitan areas,” says CEO of Taft, Suzanne Porter.
“Taft is incredibly grateful for the surety that NPDC has provided, ensuring that Womad NZ can still call the beautiful Bowl of Brooklands, Taranaki, its home here in New Zealand. We are delighted to be partnering with Womad International once again.”
Womad also takes place in Wiltshire, UK; Cáceres and Gran Canaria, Spain; Adelaide, Australia and Recoleta, Chile.
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Bluesfest announces rescheduled 2021 dates
Byron Bay Bluesfest is now slated to take place in October with a four-day format, after the original 2021 event was cancelled at the eleventh hour.
The festival had been set to take place between 31 March to 5 April 2021 but less than 24 hours before it was set to open, the New South Wales government called it off due to a new Covid case in Byron Bay.
The rescheduled event will take place at Byron Events Farm across four days instead of five (1–4 October 2021), though the organisers have said that current five-day ticket holders will receive some ‘special’ news alongside the lineup announcement.
This Wednesday (19 April), the festival will announce the full line-up which organisers say ‘will be worth the wait’.
“Trust us when we say the wait will have all been worth it…,” reads a post on Byron Bay Bluesfest’s Facebook. “We’ve been adding more of Australia’s absolute best talent – a way of saying thank you to all of you who have supported us during this time.”
“Trust us when we say the wait will have all been worth it”
The April 2021 lineup included the likes of Jimmy Barnes, Tash Sultana and The Teskey Brothers. It’s unclear whether any of the acts from the original lineup will appear at the October event.
Season tickets will go on sale after the line-up is revealed, followed by three-day and one-day tickets.
The cancellation of the April Bluesfest event was touted as a “watershed moment” by the Australian music industry, which had been lobbying for a business interruption fund that would help live events redeem their costs in the event of an eleventh-hour cancellation.
The Australian Festivals Association’s Julia Robinson told IQ that such a fund is essential to boost business confidence. Read her comment here.
Hope on the horizon for UK cancellation insurance?
After an ongoing battle for event cancellation insurance in the UK, the government has indicated it will intervene if commercial insurance is still unavailable when the country is scheduled to fully reopen.
In yesterday afternoon’s (13 May) DCMS (Department for Digital, Culture, Media & Sport) select committee meeting, secretary of state Oliver Dowden said that if events still cannot go ahead by stage four of the roadmap (21 June) because of market failure with commercial insurance, the government would “intervene in the same way we did with Film & TV“.
When Dowden was asked whether festivals and events should write off this summer, he answered “no”.
“My first priority is to make sure we get the events industry up and running, which requires us to reach stage four by 21 June,” said Dowden.
“Once we get to that point, if events still can’t go ahead because of the failure of a commercial insurance market, we stand ready to use government intervention in exactly the same way we did with Film & TV. I’ve had extensive discussions with the prime minister and chancellor on this but we must first know if something can go ahead, and if the final barrier is lack of commercial insurance then we can go about acting.”
When Dowden was asked whether festivals and events should write off this summer, he answered “no”.
In yesterday’s IQ Recovery Sessions, Festival Republic’s Melvin Benn revealed the formation of an ‘Events Indemnity Sprint Group’, which has been tasked by the government with finding solutions to the issue of events insurance.
When asked whether the government’s plan to intervene is coming “too late”, Dowden responded: “Through the Culture Recovery Fund (CRF) we have acted – particularly round two and with round three. There are challenges around bringing forward indemnity and insurance, firstly in not knowing we can fully go ahead with events from 21 June.
“It is not reasonable to expect the taxpayer to provide indemnity if it is not possible for the events to happen. There are also questions in relation to scope. At this stage, it would be better to get clarity exactly where the gap lies when things open, to then determine the extent of government intervention to fill the final mile.”
A recent AIF (Association of Independent Festivals) member survey revealed that 92.5% of respondents do not plan on staging their events without some form of government-backed insurance or indemnity scheme, with the measure being described as vital not optional.
“We stand ready to use government intervention in exactly the same way we did with Film & TV”
According to the association, more than 25% of the UK music festivals have already been cancelled due to a lack of government-backed insurance, including Glastonbury, Download and Boomtown.
Tim Thornhill of specialist brokers Tysers Insurance tells IQ: “On 21 June many more events this summer will have cancelled because of the pressure to pay deposits to the supply chain and increasing financial exposure of organisers as time is needed to plan and build events.
“This is despite the UK being ‘completely on track at the moment with the roadmap with the vaccination rolling out as planned’ said Dowden who has a ‘single-minded determination to get full reopening from the 21st June’. This determination and optimism need to be accompanied by setting up a government-backed insurance programme immediately. The planning and announcement of insurance need to run concurrently with the planning of safe events with the Events Research Programme (ERP) and successful pilots.”
The results of the UK government’s ERP will determine how larger events can take place in step four of the roadmap.
Read more about the issue of event cancellation insurance via specialist brokers here.
Under cover operations: Insuring live music in 2021
The fact that more than 350 delegates tuned in to participate in the specialist insurance session at this year’s ILMC underlines the live entertainment industry’s drive to return to normality, albeit with the reasonable caveat that their risks are insured should restrictions on mass gatherings be reintroduced due to Covid.
“Insurance in the past has always been a dirty word: nobody gave a damn and that was always reflected in the show contracts,” states Martin Goebbels of broker Miller Insurance. “Either nobody looked at, or perhaps understood the full implications of show contract cancellation and force majeure clauses until volcanic ash and a couple of instances after that – terrorism particularly.
“Obviously, Covid has just blown everything out of the water and people are suddenly realising that insurance can be important. But insurance runs in line with contract terms so it is vital to get both in sync.”
The business, however, has never been trickier. Insurers globally lost more than £8 billion (€9.3bn) in the past year because of the pandemic – £2.6bn (€3bn) of which was incurred by Lloyds of London alone.
“41% of Covid losses last year were as a result of event cancellation”
Understandably, insurers are, therefore, reluctant to offer any future Covid cover, leaving event organisers high and dry when it comes to including the coronavirus as part of their event cancellation coverage.
In a number of markets, notably Austria, Denmark, Germany, the Netherlands and Norway, the industry has been able to persuade government to set aside funds to provide an insurance stop-gap should events have to be cancelled because of a new wave of Covid cases, while trade bodies – and, indeed, the traditional insurance market – elsewhere around the world are lobbying authorities to create similar schemes that would allow the beleaguered live events business to get back on its feet.
Tim Thornhill of specialist brokers Tysers Insurance has played a lead role in the ongoing negotiations between the UK government and the country’s live music and event businesses.
He notes, “41% of Covid losses last year were as a result of event cancellation, so that is one of the key reasons that the commercial insurance market is not in a position at this moment and does not have the appetite to write Covid-related risks. That’s one of the critical reasons why we have been working alongside other brokers in the live music sector to ask UK government to provide a government-backed insurance solution.”
“Covid aside, over the past couple of years the contingency insurance market took some massive hits”
Tysers’ efforts have included employing professional lobbyists and PR firms, months of conversations with the Treasury and other government departments, and complex modelling developed with the live music sector, including umbrella trade organisation LIVE.
Goebbels explains that the landscape for live events coverage had already started thinning prior to the pandemic. “If you put Covid to one side, over the past couple of years the contingency insurance market took some massive hits,” he says.
“Certainly in the UK – which is generally recognised as the centre of the insurance industry – on the music contingency side and cancellation insurance side, there were about half a dozen insurers pulled out of writing that class of business prior to Covid, because their losses on adverse weather, illness and other reasons had increased in recent years.
“More insurers have now pulled out because of Covid. But there are glimmers of hope, as there are some new markets that have expressed an interest in coming in. [But] quite often in the past we’ve had people who want to get involved in what they see as a glamorous business, dip their toe in the market, find they have some losses, and then get twitchy and withdraw again.”
“The contingency market recovers well and they are already open for business”
That’s a dilemma underlined by Paul Twomey, director of contingency insurance at broker, Gallagher. “Some new companies have seen this as an opportunity to make money because rates are going up and exclusions are going onto the policies; there are definitely some chancers out there who can see this as a potential way to make a quick buck,” he warns. “But because nobody is buying, it’s very much up in the air as to whether these new players will stick around.”
Thankfully, the news isn’t all bleak. Edel Ryan, sports entertainment & media industry head of strategic business development UK&I for specialist brokers Marsh, observes that although a number of insurance companies have withdrawn from live entertainment cover, the expertise on the underwriting side has not been lost.
“While some key insurers have formally exited from the entertainment industry, those experts and teams have moved and turned up in new places,” Ryan tells IQ. “The contingency market recovers well and they are already open for business, providing terms where although the cover may have changed, the rates are kinder than we would have expected.”
The insurance industry’s losses amount to about 13 years worth of premiums
With the insurance industry’s losses amounting to about 13 years worth of premiums, EC3 broker James Davies sums up the dilemma that live events find themselves in: “Traditionally, the contingency market generates something in the region of between £500-600million [€580-696m] per year in premiums, so it’s going to take a very long time to recover that income,” he says.
Indeed, Twomey estimates it could take the insurance market an entire generation to claw back those sums. “If the insurers were to have a run with no other losses beginning today, they are telling us it would take 24 years to get back that money,” says Twomey.
Pragmatic in trying to encourage insurers to remain interested in the live music sector, Davies reveals why his company is in talks with government over a UK insurance scheme.
“One of the reasons we’re trying to structure something is to involve the insurance market so that they can still generate some income to recover, and they can underwrite some of the non-Covid risks that we need them to cover,” he says.
“With gov-backed insurance for costs aligning to the roadmap, the flow of money to the supply chain will unlock”
For his part, Tysers’ Thornhill observes, “Live music events and festivals are, understandably, unwilling to be the first to walk the plank and cancel their events in light of the unprecedented pent up demand and ticket sales following the announcement of the [UK] roadmap.”
Thornhill adds, “No festival wants to cancel, but might be forced to because of the result of the [UK’s Events Research Programme], safety concerns of organisers or a lack of confidence in the ability to pay suppliers in time and release deposits to the supply chain. With government-backed insurance for costs aligning to the roadmap, the flow of money to the supply chain will unlock, bringing many out of furlough to plan events in their industry.”
On 16 March, Denmark became the latest nation where the government proactively stepped in to assist promoters and event organisers, when it created a DKK 500m (€67.2m) safety net for festivals and major events, allowing organisers to plan for this summer without the financial risk posed by a potential Covid outbreak.
The safety net will cover organisers of recurring events with at least 350 participants (such as music festivals, sports fixtures, conferences and markets), as well as events that were planned before 6 March 2020, but will not include new events created during the pandemic.
“One of the problems insurers have for insuring something like a pandemic is the global losses”
Denmark’s move mirrors similar schemes in Germany (which has announced a €2.5bn fund); Austria’s €300m ‘protective umbrella’; a similar €300m pot in the Netherlands; Belgium’s €60m festival cancellation fund; Norway’s €34m festival safety net; and Estonia’s €6m risk fund for large-scale events.
A government scheme is also under consideration in France, it is reported. Although some of the announced schemes have delayed their start dates, to varying degrees the government support provides event organisers with peace of mind in case the Covid-19 situation results in cancellation, postponement or significant changes to their event. In effect, governments are plugging a hole that the traditional insurance market is not prepared to cover, at least in the short-term.
That’s a stance that Goebbels fully understands. “One of the problems insurers have for insuring something like a pandemic is the global losses – they’ve got no cap on how much they can lose, whereas on a regular tour it’s pretty much a finite amount. That’s why they are having an issue with it – they can’t just have a blank, open cheque book.”
EC3’s Davies agrees. “There are still policies in place that are covering Covid-related cancellation risks into the next three years, so insurers are still on risk for long-term policies. So that’s why the insurance industry has stepped back from underwriting Covid-related risks for cancellation,” he explains.
“Covid cover is actually available for individuals, but it only covers them”
Detailing some of the exclusions in the current insurance market, Davies states, “Covid cover on cancellation abandonment insurance for live events is not available. Forms of communicable disease insurance is available, while Covid cover is actually available for individuals, meaning you could buy individual Covid cover if you had a superstar who is going to attend, but it only covers them: it does not cover the cancellation of the event.”
In conjunction with Tysers, which has been leading efforts, EC3 has joined forces with some of the UK’s live entertainment trade associations in lobbying the Treasury and the Department for Digital, Culture, Media and Sport (DCMS) over the past nine months in the hope that they will fund a scheme similar to the one they have rolled out for film and TV production in the UK.
Crucial to that process, says Davies, is the collaboration of the insurance industry. “We feel that the insurers need to be engaged in order for them to create an element of premium income outside of Covid – in other words the bits that they can underwrite,” he says, noting that without any premiums more insurers will exit from the sector.
“We’re in discussions with gov about the details, but the aim is for it to cover costs across three specific areas”
Tysers’ Thornhill comments, “We’re in discussions with government about the details, but the aim is for it to cover the costs across three specific areas: a local authority shut down; the artists or crew not being able to turn up to allow the show to go ahead; and the third would be an enforced reduced capacity, so if, for example, the government limited maximum mass gatherings to 500 and 5,000 tickets had been sold, the policy would respond at that point.”
Film & TV compensation scheme
One company with invaluable experience in partnering with government is Marsh, which is administering the UK government’s Film and TV scheme.
Expressing her admiration for that scheme, Marsh’s Ryan tells IQ, “The DCMS and Treasury really did their homework with regards to engagement with the insurance industry – brokers and insurance companies – as well as engaging directly with the client sector, associations, broadcasters and independent production companies. They spoke to us because we have clients active in this space and it’s an area where we have expertise, as is live music, as is sports.”
“[DCMS and the Treasury] have proven that they listen and will find a way, if there is a way to do it”
She explains, “What we’ve done, which is a little bit different to how we would work with our clients, is that we’ve assembled a team who are not necessarily experts in this space but are experts in the intention, the purpose, the rules and the criteria of this scheme, and that’s what was important. We were also able to put plans in place should there be a tsunami of enquiries, which we were primed to expect.”
However, the Marsh team was not initially inundated with calls. “The applications in the beginning were slow, but they’ve picked up because of the extensions that have been put in place, which have made the application much more feasible for production schedules,” says Ryan.
Describing the scheme as a compensation scheme, rather than insurance, Ryan says, “For the industry it’s a first. It’s set the standard and I am not at all surprised that live music and live entertainment is looking toward that and appealing to the DCMS and Treasury to replicate it or extend it beyond its scope.
“The film scheme is far easier to underwrite because film sets by their very nature are enclosed environments”
“If the government were to do it, I think they have a model to be able to shape it very quickly. And what the DCMS and Treasury have also proven is that they are willing and able to work with industry. They’ve already extended the film and TV scheme four times, and they’ve extended some of its cover beyond the original intention to things like the over 70s. So they’ve proven that they listen and will find a way, if there is a way to do it.”
While the UK government’s stop-gap for the film and TV sectors provides a glimmer of hope for the country’s live events business, brokers are at pains to stress that the industries operate to very different standards, with those IQ spoke to believing it is 50-50 as to whether government departments will establish a similar programme for concerts and festivals.
Goebbels observes, “The film scheme is far easier for the government to underwrite because film sets by their very nature are enclosed environments that don’t rely on the public or an audience. So for film it’s far clearer as they can put themselves into a bubble or isolated set situation and carry on their business. Any event reliant on an audience is a very different proposition.”
“We need everyone in the supply chain to be supported and [a government fund] would do that”
Davies believes that even if a government scheme is approved, it will still take some time to establish. “If the government gives a green light, we then have to work on the structure in order to put the indemnity scheme together and we’ve been advised that would take between six to eight weeks from the green light,” says Davies.
Thornhill is hopeful. “The government does understand, from the conversations that we have had, that there is a need, so we are hopeful that something will come out,” he says. “We need everyone in the supply chain to be supported and [a government fund] would do that.”
At Marsh, Ryan is also hopeful that the government could provide the live entertainment sector with the same kind of support it has extended to film and television production companies. And she sees a series of upcoming pilot shows as being crucial to persuading politicians.
“There seems to be a determination by the industry and the government to make this happen,” says Ryan.
“I think those [test] events will set the standard in regards to how things can be done safely”
“I believe there are test events planned, and I think those events will set the standard in regards to how things can be done safely. They will influence things like capacity and audience numbers. I also think the speed and success in the way the vaccinations are being rolled out is going to be a significant factor.”
Making a compelling case for state-sponsored help, Thornhill says, “The commercial insurance market does not have an incentive to put its neck and money on the line when there is so much insecurity around Covid. But the gov- ernment does have an incentive.
“If it put down a fund now, then it would only have £400m [€463m] of exposure, but that could generate £9bn [€10.4bn] in economic value added to the UK economy across the course of the year. So the government’s risk reward is much greater because it will be rewarded by companies not going out of business and economic activity in certain sectors.”
“Communicable disease and Covid are going to be at the forefront, and other areas coming into it now”
Backing up that assertion, Ryan says, “What I read recently from the [British Film Institute] was they believe that close to £1bn [€1.2bn] in production costs have happened because of this scheme, supporting over 25,000 jobs.”
The main difference between industries is obvious, but there are other factors at play according to Ryan. “Of course, film and TV is not reliant on a mass audience,” she says, “but prior to the fund being announced they had also proven that they were able to get back to work. However, the single barrier that was preventing other projects was insurance,” she adds, again drawing parallels with the situation in which events organisers find themselves.
Covid aside, the insurance market for live events has never been more complex. “It’s going to be a tough market, certainly for the next year or two,” warns Goebbels. “Communicable disease and Covid are going to be at the forefront, and other areas coming into it now are things like cyber insurance, where insurers can see potential global losses and they have to find a way to cap their losses as they go along.”
“Everyone is going to have to work out where their responsibility lies with the person they are contracting to”
Goebbels also notes with interest the way in which the industry has made fundamental changes in its operations. “Live Nation made a clear statement by announcing proposed changes to their show contracts: if the show happens, the artist gets paid; if the show doesn’t happen, for any reason, they don’t. That’s it. It’s very clear and skips all the grey areas from previous contract as to when a promoter must pay an artist or not.
“So the artist will then have to draw up their own deals with suppliers and the promoter in turn, whether that’s with venues or advertisers or sponsors or whatever else it may be. Everyone down the line is going to have to work out where their responsibility lies with the person they are contracting to. That’s going to be a lot of work and maybe needs some legal input somewhere down the line.”
Thornhill points out that it’s not just the contingency market that is seeing an increase in premiums – it’s many classes of business. “We’re going into a hard market now, which means that the premiums are going to be increasing across many of the insurance policies that those in the industry purchase,” he says.
“This is not a competitive market, so my message to clients is choose your broker well and talk to them early”
“There is a lot of change going on in the insurance market at the moment and we, as brokers, have got to be mindful of that and we have to make everyone who is buying from us aware of the changes that are happening.”
That’s a sentiment Marsh’s Ryan echoes. “This is not a competitive market, so my message to clients has not changed since day one: choose your broker well and talk to your broker early,” she advises.
“With our clients, we make sure they have a relationship with their market, as well as having it with us. We make sure the client is involved in making sure the underwriter has a very good impression of what the event is, rather than what they think it might be. Those are significant factors in how underwriters will rate it and price it. And while rates are going up you want to make sure the client has as much faith in their market as they do in their broker.”
One monumental change of tune amongst the insurance community is the way they are working with clients to refund premiums. Gallagher’s Twomey explains, “One of the biggest issues that clients are concerned about is getting the money back if Covid does shut things down. They know they cannot claim for it, but can they get their premiums back?”
“Our message to clients is buy early”
That flexibility is proving helpful. “Pretty much everyone in the contingency world has agreed to premium cancellation clauses that work in favour of the client,” says Ryan. However, she says clients remain “hesitant” for fear of exposing themselves to sunken costs, meaning she and her colleagues are bracing for a deluge of enquiries as events begin to announce a return.
She adds, “Because the pandemic was declared so early in the year in 2020, many festivals were able to avoid a lot of sunken costs. That is a positive, but many festivals also were not insured because of their practice of purchasing insurance closer to the event. So our message to clients is buy early. The price is the price and each day closer to your event doesn’t reduce the cost – the cost is always going to be the same. So you should make insurance one of your first to-do’s.”
The fact that brokers’ phones and email inboxes are becoming more active again signals that confidence is slowly returning to the live entertainment industry.
Twomey says, “We’re starting to be hopeful for the back end of 2021. We’re quoting on some US events, dependent on the state where the event is taking place because of the way they are doing things: Texas has opened up; Florida never seemed to close down in the first place.
“Covid has certainly opened people’s eyes to the benefit of insurance”
“European-wise, international touring may be a no-no for this year, whereas UK artists doing a UK tour or French acts touring in France may be feasible. Later on this year I think we’ll see some of those starting to come through and that’s the way it will run for this year.”
But Twomey believes the increase in prices may dissuade some promoters from hosting events until 2022. “Margins were quite tight anyway for promoters, and if insurance is the thing that tips the margin into the negative because the rates have increased, then that’s going to be an issue,” he says. “On the other hand, Covid has certainly opened people’s eyes to the benefit of insurance, because with billions paid out, a lot of clients have benefitted from policies, so I like to think it’s concentrated minds on things.”
As for other areas of concern, Goebbels suggests that with the Queen in her 94th year, the prospect of a period of national mourning is becoming more of a reality – not just in the UK but also around the world in Commonwealth nations.
“It’s a sad reality that’s never happened in our lifetimes so we don’t know the full impact, but when it happens everyone will be looking to be paid. But I try to point out it is excluded by all standard cancellation policies as they have an age limit. We don’t know for sure whether the USA would have national mourning for a serving president but Biden now also exceeds insurers’ age limit. These are matters that many clients don’t take note of but no doubt when it happens will expect insurance to pay.”
“The market has failed, so the government have to step up”
And, of course, Brexit has also created untold issues, with many insurers having to establish European offices to adhere to legal requirements.
“As and when touring starts, we’re going to run into issues with visas and travel, because it is a requirement of all insurance policies that all arrangements are made in advance,” says Twomey, regarding Brexit. “If we arrive at a situation where a UK band cannot enter Germany because they don’t have the correct visas, or whatever, then the insurance policy would not respond because it’s warranted that all arrangements are made in advance.”
At EC3, Davies concludes that the entire future of insuring live events is in the balance, unless governments intervene. “The market has failed, so the government have to step up and insure this element of the contingency insurance policy that is not covered at the moment. The future of both the contingency market and UK live events relies on this,” he says.
Read this feature in its original format in the digital edition of IQ 97:
This article forms part of IQ’s Covid-19 resource centre – a knowledge hub of essential guidance and updating resources for uncertain times.
UK fests cancel as industry calls for new fund
As more UK festivals cancel, the live industry has written to prime minister Boris Johnson asking for a ring-fenced portion of the Culture Recovery Fund (CRF) to create a new contingency fund for live events.
The email landed in Johnson’s inbox just hours before the 70,000-capacity Boomtown festival became the latest casualty to cancel due an ongoing lack of insurance for events.
The letter, which is signed by all members of LIVE (Live music Industry, Venues and Entertainment), UK Music, as well as Festival Republic’s Melvin Benn, Live Nation UK & Ireland chairman Denis Desmond, and Kilimanjaro’s Stuart Galbraith, references being “at an impasse” with DCMS and Treasury officials, and emphasises “a complete market failure in the insurance market with regards to the provision of Covid-related cancellation cover”.
“There is simply no better or more efficient way to use CRF funds to drive money through the live music ecosystem”
“…we would like to formally propose that a material portion of the remaining fund is used to create a contingency scheme in order to stimulate economic activity in the summer and beyond. This could work by covering a proportion of an organiser’s costs if they were forced to cancel for Public Health grounds.”
It goes on to say “there is simply no better or more efficient way to use CRF funds to drive money through the live music ecosystem – from artists and venues to technical staff and freelance crew – than to enable people to get people back to work.”
Similar compensation schemes have been announced in Germany (€2.5bn), Austria (€300m), the Netherlands (€300m), Belgium (€60m), Norway (€34m), Denmark (DKK 500m) and Estonia (€6m). But while the UK Government is underwriting the cancellation costs of all forthcoming Events Research Programme pilot shows – to a maximum of £300,000 per event – officials are reticent to agree to a scheme more broadly.
“After almost half a year of campaigning, sadly Covid specific cancellation insurance for events simply does not exist”
Independent festival Boomtown had planned to go ahead this year with a scaled-down event but organisers have said that time has run out to find a solution to ‘the mind-boggling conundrum of putting on a safe and well-run event to the sheer scale, complexity and intricate nature’.
“With less than four months to go until the event, and after almost half a year of collective campaigning to the government, sadly Covid specific cancellation insurance for events simply does not exist at this point in time,” reads a statement on the festival’s website.
“This means anyone putting on an event this year, will be doing so without the safety net of insurance to cover them should Covid prevent them from going ahead in any capacity. For an independent event as large and complex as Boomtown, this means a huge gamble into an 8-figure sum to lose if we were to venture much further forward, and then not be able to go ahead due to Covid.”
“It’s unlikely that we’ll be able to weather the storm of no events happening in 2021”
Anna Wade, communications and strategy director at the Winchester-based festival, has been vocal about the need for government-backed insurance and gave evidence at the Department for Digital, Culture, Media and Sport (DCMS) Select Committee’s inquiry into safeguarding the future of the sector in January.
During the hearing, she said: “It’s unlikely that we’ll be able to weather the storm of no events happening in 2021. Most festival organisers only hold one event and that is the one opportunity in the year. Without that, we don’t have a company essentially.”
Though the festival was awarded £991,000 in the latest round of the CRF, the organisers say “the reality is it represents only a fraction of the costs (under 10%) involved in creating an event to the sheer scale and ambition of Boomtown”.
“The lack of appropriate government backed cancellation insurance, has rendered this year too great a risk”
Boomtown Chapter One: The Gathering will now take place from 10–14 August 2022.
“The cancellation of Boomtown Fair is devastating but not surprising, and further festival cancellations will follow,” says Paul Reed, CEO, Association of Independent Festivals (AIF). “AIF has been warning and providing evidence to the government for over six months on the urgent need for intervention on insurance. It is an enormous risk for any independent festival to commit to upfront, non-refundable costs and very difficult to plan with confidence in the absence of insurance. The average cost of staging an independent festival is over £6m.”
Barn on the Farm, which would have taken place in Gloucestershire between 1–4 July 2021, has also cancelled today as “the potential risk [of going ahead] is too large”.
In a statement on the festival’s website, the organisers write: “Although the government roadmap is running on track, with us falling only 10 days after the end date for restrictions lifting we feel there remains too much uncertainty for us to safely continue this year. This, coupled with the lack of appropriate government backed cancellation insurance, has rendered this year unfortunately too great a risk for us to continue planning in the festival’s current format.”
“The cancellation of Boomtown Fair is devastating but not surprising, and further festival cancellations will follow”
Last week, Shambala, which was slated to celebrate its 20 anniversary from 27–30 August in a secret Northamptonshire location, was called off.
“As a totally independent festival, even with the amazing support you lot have shown us over the last year and the CRF grant we received, without government-backed insurance a last-minute cancellation would risk the very future of Shambala. That’s not a gamble we are willing to take,” reads a statement on the festival’s website.
Whilst we very much hope that the various targets in the roadmap are met and restrictions are lifted in mid-June, there’s still a very real possibility that social distancing measures will still be in place. With this in mind, we’ve been engaged in a somewhat nightmarish game of Tetris over the past few months trying to envisage how Shambala could work. The short answer is, it couldn’t. It just wouldn’t be Shambala.”
“Without government-backed insurance a last-minute cancellation would risk the very future of Shambala”
The festival has decided to “wipe the slate clean” and refund all ticket holds, instead of offering rollovers. However, current ticket holders will have tickets reserved for them to purchase next year before they go on general release.
“For various reasons, and for us to be in the best position to bounce back and be nimble in 2022, we need to manage it this way.”
In lieu of the flagship event, Shambala has introduced ‘Camp Kindling’, a number of creative camping weekends.
Camp Kindling will take place on 23–26 July, 30 July–2 August and 6–9 August 2021. More information will be published on Shambala’s website in due course.
“Considering the lengthy planning cycle of festivals, it is difficult to think anything other than we are being timed out for the summer”
Other UK festivals including Glastonbury, Download, Belladrum, Cornbury Music Festival, Bluedot, Belladrum Tartan Heart Festival, Cambridge Folk Festival and Margate’s Hi-Tide have already called it quits, citing a lack of security for large events.
A recent AIF member survey revealed that 92.5% of respondents do not plan on staging their events without some form of government-backed insurance or indemnity scheme, with the measure being described as vital not optional.
“Considering the lengthy planning cycle of festivals, it is difficult to think anything other than we are being timed out for the summer,” says Reed, AIF.
“Governments across the rest of Europe have already acted to support festivals, sharing the risk with organisers so that they may reopen safely. If this government doesn’t intervene in some way on insurance and back its own roadmap, I’m afraid that, despite the rhetoric, it won’t be a great British summer for events – it will be an extremely selective one despite the clear demand and huge amount of customer confidence that the roadmap has injected.”
Live Nation Norway cancels Tons of Rock 2021
Norway’s biggest rock and metal festival, Tons of Rock, is the first major Norwegian festival to cancel its 2021 edition.
The Live Nation-owned festival had been scheduled to take place in Ekebergsletta, Oslo, across three days in June but the organisers say this year’s event is not possible.
“Since the summer of 2020, we have been working on all possible scenarios and options to make it possible to complete the festival,” reads a statement on the festival’s website.
“It has been and is a difficult and demanding time, and it is now clear that it is not possible to hold the Tons of Rock Festival in 2021. This is very sad and frustrating for all of us in Tons of Rock, for the artists, suppliers, collaborators and mostly for our amazing audience from all over Norway and more than 50 nations.”
The Norwegian government previously announced a NOK 350 million cancellation insurance fund for festivals, allowing organisers to plan for this summer without the financial risk posed by a potential Covid outbreak.
“It has been and is a difficult and demanding time, and it is now clear that it’s not possible to hold the festival”
However, Norway’s minister of culture, Abid Raja, said in a press conference that the scheme is expected to cover July and August events – meaning Tons of Rock’s June edition would not be insured.
Though Tons of Rock would have been ineligible for that particular government support, the festival did benefit from the state’s compensation scheme for organisers and subcontractors in the cultural sector.
In February, the festival was granted NOK 36.1 m, the full amount applied for by the organisers, for the cancellation of the 2020 edition – caused by the government’s extended ban on major live events.
The festival will return next year between 23–25 June, with headliner Iron Maiden.
Other major Norwegian festivals including Live Nation-owned Bergenfest and Superstruct’s Øya Festival, are still going ahead at the time of writing.
Swedish gov proposes SEK 3bn event cancellation pot
Sweden has become the latest country to propose an event cancellation fund that will allow organisers to plan for the second half of the year without the financial risk posed by a potential Covid outbreak.
Under the SEK 3 billion (€292m) insurance scheme, the government is expected to cover the organisers of events planned between July and December 2021 for up to 70% of the costs, should their event be cancelled or restricted.
In the last year, various insurance schemes for events and festivals have been announced in Germany (€2.5bn), Austria (€300m), the Netherlands (€300m), Belgium (€60m), Norway (€34m), Denmark (DKK 500m) and Estonia (€6m).
Sweden’s support must be approved by the European Commission before the government can proceed.
“The limit [would be] a ceiling per beneficiary of €1.8m so that the aid does not risk violating the EU Commission’s framework”
Culture secretary Amanda Lind, who announced the support during a press conference last Thursday (1 April), says: “If we come to the conclusion that the temporary state aid regulations will be used, the limit is a ceiling per beneficiary of €1.8m so that the aid does not risk violating the European Commission’s framework.”
The government plans to announce details of how and when the support will be distributed in April.
In addition to the insurance cover, the government has announced another SEK 1.3bn (€127m) in ‘crisis and recovery’ support for the cultural sector in 2021.
The crisis package includes SEK 125m (€12m) in targeted support for certain state cultural activities, with most of the remaining funds to be distributed by the Swedish Arts Council.
Terms of the distribution are yet to be announced by the government.
Bluesfest forced to cancel at the eleventh hour
Byron Bay Bluesfest 2021 has been cancelled by a public health order, a mere 24 hours before doors were due to open to the public.
The New South Wales (NSW) government announced on Wednesday (30 March) that Bluesfest would not be permitted to go ahead on its scheduled dates, Thursday 31 March to Monday 5 April, due to a new Covid case in Byron Bay.
Bluesfest confirmed the cancellation in a statement published late afternoon on 31 March. “We are heartbroken that Covid-19 has spread into our local community,” it read. “We are getting the message out as quickly as possible so that those traveling to the event can make alternate arrangements.”
Read the full Bluesfest statement via our website: www.bluesfest.com.au/bluesfest-is-cancelled-for-two-years-in-a-row
In a statement, Minister Hazzard said: “While the cancellation of Bluesfest is disappointing for music lovers and the local community, I hope that ticket holders would support Bluesfest and hold on to their tickets as I understand Bluesfest will be working on a new date as soon as possible.”
Under an NSW Health-approved Covid-19 safety plan, Bluesfest 2021 was set to operate at approximately 50% of normal capacity and production, hosting around 16,500 people on each of its five days, with an all-Australian line-up.
It’s just been announced that @BluesfestByron has been cancelled. While this is such huge blow for Aussie music, the health and well-being of this country has to come first. Thanks to the team at Bluesfest for doing the best they could in preparation. pic.twitter.com/4fpJBzqXAh
— Jimmy Barnes (@JimmyBarnes) March 31, 2021
The cancellation marks the second time the festival has been called off due to the coronavirus.
The last-minute cancellation of Bluesfest has prompted fresh calls for a government insurance scheme that would help live events redeem their costs in the event of an eleventh-hour cancellation.
“Govt has a Covid insurance system for the film industry. Music needs one too. Urgently”
Bluesfest’s Peter Noble had called for such a fund at the beginning of the year. A business interruption fund, he wrote on Facebook, would “incentivise event presenters to put on events and be protected in not going to the wall, should an out break of Covid shut down their businesses at short notice and protect artists, crew and suppliers [to] get paid should that occur”.
“The federal government did it more than six months ago for the film industry to get them back to making movies. Why are we still waiting?” he wrote.
Shadow Arts Minister Tony Burke has also called for a “Covid insurance system” for live music. “The music industry is full of viable profitable businesses unable to function because of public health,” he wrote on Twitter. “Govt has a Covid insurance system for the film industry. Music needs one too. Urgently.”