Covid pandemic – once in a generation?
Just a few short years ago a global pandemic would have seemed to be something which could only happen in a Stephen King novel, or in science fiction – The Stand, or 28 Days perhaps. The ‘Spanish Flu’ epidemic of 1918/20 notwithstanding, the thought of a virus today bringing the world to a halt, resulting in the deaths of millions of people would have seemed incomprehensible, but the warning signs were already there…
There were some near misses, most recently SARS in 2002 and Avian Flu in 2013, but the effects of these outbreaks were relatively contained, and anyone warning of a global pandemic was largely seen as a conspiracy theorist or worse.
The smart money now is on another pandemic happening sooner, rather than later. Covid is not expected to be a once in a generation occurrence, but, and it is a very BIG but – no-one can predict when or how it is likely to occur, although some studies suggest that there is a 30% chance that another pandemic will hit within the next 10 years. This shouldn’t be taken that we have 10 years to prepare ourselves for the next one as it could occur at any time – in 2024 alone, although not widely reported, there have been outbreaks which could quite easily have escalated very quickly, particularly one outbreak of Avian Flu. Fortunately these were controlled.
The live entertainment business fell off a cliff for a period of time, and it is great testament to all of the people in that industry that the business has recovered incredibly well – pre-Covid annual global live music revenues were $28.56 billion, in 2023 revenues were $28.86 billion, with 2024 expected to be even stronger.
As a direct result of the pandemic, insurance losses are estimated to be $44 billion, which makes the pandemic the third largest insurance loss ever, after 9/11 and Hurricane Katrina. Total losses, including uninsured, are calculated to be in the $trillions. It will come as no surprise that insurance companies, realising the sheer magnitude of their losses, retreated to lick their wounds, then applied huge rate hikes, and exclusions to coverage for almost anything Covid-related.
“If an insurance policy provides cover for the non-appearance of an artist due to illness, why should Covid continue to be excluded?”
Non-Appearance insurance and Event Cancellation insurance are essential for savvy promoters, managers, artists and almost every business involved in the staging of live events. So much investment, or potential revenue could be riding on a tour, or even one show – the values can be staggering – the Taylor Swift tour grossed over $1 billion. But since Covid, everyone has had to accept that insurance for this risk – the one that got up and punched the industry on the nose so badly that for some, it was a knock out blow – is one that they have to shoulder themselves. Should insurers now be doing more to offer protection for this?
Well, yes actually, and there are some extremely innovative solutions available now using parametrics, but these solutions really offer balance sheet protection for major corporations rather than for a show or a tour, and the cost is serious – minimum premiums are at least $100k, if not more.
Covid is now part of our lives – most of us consider it to be akin to flu, and if an insurance policy provides cover for the non-appearance of an artist due to illness, why should Covid continue to be excluded?
We’re making headway. Some of the insurers we work with have agreed tentatively to offer cover when an artist cancels a show because they’re suffering from Covid, but there are limitations – the number of shows which can be affected is limited, as is the monetary amount.
It’s not a total solution – that is a very long way off, but it’s a step forward, and every step forward is a step in the right direction for the industry.
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DEAG plans further EU expansion for strong H2
German live event powerhouse Deutsche Entertainment AG (DEAG) forges on with its buy-and-build strategy, after reporting a decline in sales for the first half (H1) of 2019.
Despite reporting a strong start to 2019, sales in the first half of the year are down, with operating earnings before interest, taxes and amortisation (EBITDA) also decreasing, from €4.2 million in 2018 to €3.1m.
In its 2019 H1 financial report, DEAG attributes the decline in sales of almost 46%, from €118m in H1 2018 to €63.9m, to the “’seasonal postponement’ of certain events”. For example, DEAG organised twelve high revenue-generating Ed Sheeran shows in the second quarter of last year, whereas the company’s six Sheeran concerts in 2019 fall in the third quarter.
DEAG attributes the decline in sales to the “seasonal postponement of certain events”
Q3 2019 is forecast to be successful all round, with concerts by Böhse Onkelz, Foreigner, Stereophonics, Limp Bizkit and Toto expected to contribute to revenues of €55m, 60% more than the same period last year.
DEAG also says it plans to continue its 2019 buying spree, adding to recently acquired controlling stakes in Stuttgart-based C2 Concerts, Swiss concert organisers LMP and LME, LiveStyle’s German arm I-Motion and Schlager powerhouse Mewes Entertainment.
Finally, the use of the DEAG-owned MyTicket platform to distribute more than half a million tickets will also contribute to “one of the strongest fourth quarters in company history”.
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DEAG heralds open-air concert success
German live entertainment giant DEAG has had a successful summer season so far, profiting from recent European investments.
DEAG sold 110,000 tickets for open-air events Sion Sous Les Étoiles in Switzerland, Scotland’s Belladrum Tartan Heart Festival and Germany’s Nature One in Germany. All events were sold out.
DEAG made three promoter acquisitions last month, most recently taking a majority stake in Sion Sous Les Étoiles (Sion under the stars) promoter Live Music Production, along with sister company Live Music Entertainment.
A few weeks before, the powerhouse bought into Livestyle’s German subsidiary I-Motion, the promoter of rave event Nature One.
“We are not only contributing to strengthening our profitability, but also providing growth impetus in our ticketing business”
DEAG increased its shareholding in German ticketer MyTicket, which provided the ticketing for Kilimanjaro-promoted Belladrum, in January.
“We are supplementing our organic growth by expanding our own successful entertainment formats with very selective M&A activities,” comments DEAG chief executive Peter Schwenkow.
“All three open-air events are great proof of how successful we are. We are not only contributing to strengthening our profitability, but also providing growth impetus in our ticketing business. Via MyTicket we sell tickets for all our events, as well as third-party content.”
DEAG has also recently taken a majority stake in Stuttgart-based promoter C2 Concerts.
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DEAG acquires Michael Drieberg’s Live Music Production
German live entertainment powerhouse DEAG has made its third promoter acquisition this month, announcing today it is to acquire a majority stake in Live Music Production (LMP) and Live Music Entertainment (LME), the leading concert organisers in Francophone Switzerland.
The acquisition sees the two companies – founded and owned by veteran promoter Michael Drieberg – become part of AIO Group, the DEAG subsidiary that includes Good News Productions, the market leader in German-speaking Switzerland, as well as the country as a whole.
Over a 20-plus-year career, Drieberg has organised shows by the likes of Johnny Hallyday, Sting, David Guetta and Zucchero, and his company offers “attractive events in the segments rock/pop, family entertainment, arts and exhibitions and classics jazz”, with a focus on French-speaking artists, says DEAG.
The group also owns the 2,000-capacity Salle Métropole venue in Lausanne and promotes the open-air Sion Sous les Étoiles festival in Sion, Canton Valais, which welcomes 40,000 visitors annually.
“We are gaining excellent access to the French-speaking market”
The acquisition of a majority stake in the Live Music companies follows similar deals with I-Motion, the German division of EDM conglomerate LiveStyle (formerly SFX Entertainment), and Stuttgart-based promoter C2 Concerts, earlier this month. DEAG alluded to several in-the-works European investments in its recent Q1 financial report.
Drieberg will continue to manage the businesses and, together his team and DEAG, is responsible for driving the growth of LME/LMP. Following the acquisition, for the Swiss market as a whole, DEAG expects profitable revenue worth around Fr. 35 million (€51.5m).
“With this investment, we are accelerating the strategic expansion of our business activities in Switzerland,” says Detlef Kornett, a member of DEAG (Deutsche Entertainment AG)’s executive board. “We are expanding our range of events to include first-class French-speaking artists and events and are gaining excellent access to the French-speaking market.”
Drieberg adds: “With DEAG, we are jointly establishing a network that offers all of us excellent growth opportunities. We have a long-standing, trusting relationship with [Good News CEO] Stefan Matthey and Good News Productions and look forward to expanding our joint activities.”
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