The British independent festival sector is at risk of collapsing, with many cancelled events falling through the cracks of government support measures for businesses suffering as a result of the coronavirus crisis.
The Association of Independent Festivals (AIF), which represents 65 festivals in the UK, including Gloucestershire’s 2000trees, London’s Meltdown and Sheffield’s Tramlines, reports 92% of its members saying they face costs that could ruin their businesses as a result of cancelled events, with the vast majority (98.5%) not covered by insurance for cancellation related to Covid-19.
Costs include potential refunds of up to £800m for events that were due to take place this summer, and average non-recoupable costs of £375,000 per festival for overheads such as marketing, staffing and advertising. A member survey has revealed that the sector could be facing redundancies of 59% on average and will lose more than half of its workforce between September 2020 and February 2021 without support.
AIF chief executive Paul Reed says that many independent festivals aren’t able to access funds through the government’s coronavirus business interruption loan scheme because they are unable to meet lending criteria, while the bounce-back loan scheme, capped at £50,000, doesn’t adequately cover what they need to stay afloat without income for this year.
Goc O’Callaghan, who runs rock festival ArcTanGent and works across Black Deer festival and 2000trees, says the majority of staff members are also ineligible for the furlough scheme, which is due to end on 31 October. “And, as small-business owners who pay themselves via dividends, we also don’t qualify for any of the payments, despite the large amount of corporation tax we’re contributing,” she says.
Reed says that the seasonal nature of the festival sector poses specific challenges. “It’s not a temporary shutdown of business – this is an entire year of income and trade essentially wiped out,” he says. “It’s really different from a retail business, where, however devastating this may have been, they can get to a point where they can reopen, mobilise and bring staff back in. The vast majority of our members are focused on the delivery of one single large event across the entire year, and that’s all been wiped out.”
AIF is calling for a continuation of all furloughing and self-employed schemes and business support packages until the festival industry can get to the planning and sales stage of 2021 events. In addition, it wants clear guidance about when festivals will be able to operate, as well as any social distancing measures that would be expected in order to maintain public safety.
ArcTanGent, Black Deer Festival and 2000trees have all been cancelled this year. “If there had been clearer guidelines earlier on, we certainly could have saved ourselves spending huge amounts of money over the last three months, and possibly longer,” O’Callaghan says. She’s hopeful that all three events will return in 2021, thanks in part to the “goodwill” of fans who haven’t asked for refunds for tickets that will still be valid next year, as well as a successful crowdfunding campaign for 2000trees that has so far raised nearly all of its £50,000 target to help keep the festival afloat. A similar campaign will be launched for ArcTanGent this week.
“It’s the generosity of our fanbase that is allowing those events to continue. The events will find their way to go ahead in 2021, even though all of them are starting out in a six-figure hole,” she says, but adds that, without access to the government’s loan schemes, the events won’t be up to the standard of previous years.
A lost summer of festivals has a wide-reaching impact across the live music sector, which is expecting to suffer £900m in losses this year, or 81% of its annual contribution to the UK economy, according to figures from lobbying body UK Live Music Group. Matt Bates, who is the live agent for the 1975, Wolf Alice and Alt-J, says that touring musicians will lose up to two-thirds of live income from cancelled festivals. For those who aren’t among the very few to have reached arena level, Bates says “having no festivals to play this summer has absolutely destroyed their income and their livelihoods”. The Musicians’ Union says its members have lost more than £21m in income since lockdown began.
Latest guidelines from the government on the plan to leave lockdown stop short of mentioning when live music might be able to return; many companies across the business are expecting gigs and festivals will not be allowed until 2021. Booking agent Rob Challice, who sits on the board of the UK Live Music Group, says it’s estimated that 70% of live agency staff will need to be furloughed, and there have been mass layoffs at major US agencies Paradigm and WME.
Promoters Live Nation and Kilimanjaro Live say that more than 90% of those who have bought tickets for rescheduled shows have opted out of refunds, but while that provides some security for next year, it doesn’t help cash flow now. Kilimanjaro Live CEO Stuart Galbraith, who has furloughed 60% of his staff, says that the majority of ticket money doesn’t get paid out until after events take place – it’s usually held by venues or agents – meaning that, like festivals, many promoters have to get through 2020 with no income from events. “We’re trying to book new shows for autumn next year, and desperately trying to make some turnover to keep the company going through what’s going to be a very tough nine months,” he says.
Industry lobbying group UK Music has said the latest plans outlined by Boris Johnson added to uncertainty in the music industry about when different sectors would emerge from lockdown. Its chair, former Labour deputy leader Tom Watson, has called for a music industry taskforce. He says: “It is vital, while we all work towards getting the live industry under way again and record stores reopened, that all the government support packages are not cut back until we get back on our feet.”
AIF’s members generate an estimated £386m for the UK economy each year, with almost 10% of that spend going to businesses based around each festival’s site. According to UK Music, 4.9 million people attended a UK festival in 2018 and the live sector employed 30,529 people.