Once-Lucrative Private Gig Economy, Driven By Oligarchs and Corporations, Dries Up in Russia

Chris Ratcliffe/Bloomberg via Getty Images
Mikhail Gutseriev, chairman of RussNeft OAO, photographed in Saint Petersburg, Russia on, June 19, 2015.

For years, Western acts have been able to score lucrative deals playing at private and corporate parties in Russia. But as the country entered a recession, with the ruble now having lost a substantial part of its value against the dollar, the number of companies and individuals that can afford foreign stars has dropped significantly.

Only extremely wealthy individuals are an exception, such as oligarch Mikhail Gutseriev -- owner of oil refinery Russneft -- whose son's wedding late last month featured performances by Sting, Jennifer Lopez and Enrique Iglesias. Meanwhile, many others are feeling the pinch.

Private and corporate gigs by Western artists in Russia are shrouded in secrecy, and are organized by a handful of companies and private individuals, none of whom advertise themselves or speak to media.

"You won't be able to easily find contacts for the management of, say, Shakira or Beyonce online," Moiseyenko said. "And even if you do, they wouldn't deal with a company unless it is carefully vetted."

Players in the Russian live industry say the recent souring of relations between Russia and the West has had no impact on Western stars' desire to do private gigs in Russia.

"The number of performances by foreign acts at private and corporate parties in Russia has declined," Elena Moiseyenko, booking director of ArtMania agency, which brings jazz acts to Russia to perform regular and private shows, tells Billboard. "Many companies or individuals that used to order foreign artists have switched to local acts and cover bands."

According to Alexander Skorobogatov, head of EliteConcert group, which has organized events involving Western acts, the number of performances by foreign artists at corporate and private parties is down significantly; about 75 percent.  "These days, many companies have seen their budgets cut, especially state-run corporations," he says.

The market for top international stars' private performances began to take off about ten years ago, when the Russian economy, fueled by high oil prices, was booming and owners of large corporations were looking for new ways to entertain their staff or guests.

Although not many such shows became publicly known, Lopez is believed to be among the first foreign stars to enter the lucrative business. Back in 2006, she performed a set at the 50th anniversary party of Telman Ismailov, once a powerful oligarch, whose fortune has dwindled since then. Reports pegged the singer's fee to be $1.5 million.

A request for comment from Lopez was declined, and a spokesperson declined to confirm the $1.5 million fee. Scorobogatov estimates that the report was an exaggeration.

While only the wealthiest companies and individuals are able to pay the money demanded by top-level stars, until recently, many more were able to afford lower-tier acts, especially whose which were popular here in the late '70s or '80s but didn't make a huge impact elsewhere in the world.

While top-level acts may not be lured by low feed, others have made a career of this type of performance. Italian singer Toto Cutugno, his German colleague Tomas Anders and the German disco band Boney M have regularly played corporate and private events in Russia over the last few years. Before the economic downturn, their fees were reportedly around $50,000 per gig.

Often, artists like Cutugno have spent a few weeks in Russia in December and January, during a lucrative period of corporate New Year's Parties. Boney M's singer Bobby Farrell died in St. Petersburg of a heart condition during one such tour, back in December 2010.

"They are ready to play here," Moiseyenko said. "There is just not enough demand."

"The size of their fee is the only issue," Skorobogatov added.


THE BILLBOARD BIZ
SUBSCRIBER EXPERIENCE

The Biz premium subscriber content has moved to Billboard.com/business.


To simplify subscriber access, we have temporarily disabled the password requirement.