For Host Countries, Eurovision Is a Financial Gamble

Duncan Laurence
Thomas Hanses

The Netherlands' representative Duncan Laurence during rehearsals at Tel Aviv Expo.

Despite Madonna set to perform, host Israel is the first country to fail to finance the 64-year-old event.

Fighting off political calls for a boycott and terrorist threats from Hamas, Israel is set to take on one of the world's biggest music events this week -- the Eurovision Song Contest. But capitalizing on the magnified spotlight is proving to be a financial struggle for the host country.

Israel is the first country in the contest's 64-year history to fail to financially support the event, said Eldad Koblenz, the CEO of the Israeli Broadcasting Corporation. 

Governments traditionally give anywhere from 30 percent to full financing for the contest, Koblenz said. But about two-thirds of this year's budget of $33.5 million are government subsidies in the form of a loan from the network that will need to be repaid in 15 years, according to TheMarker, an Israeli business publication.

"This entire process felt strange," Koblenz said. "We are fully financing this one-night event with a budget intended to support our original programming for the upcoming decade."

The budgetary strains meant higher-priced tickets -- three times as much as last year in Lisbon. While the Grand Final on Saturday is sold out, many tickets for each of the two semifinals, priced at around $250, remain unsold. Local media reported Sunday that some seats would likely be filled by invited citizens from the rockets-ridden south of the country, the area bordering the Gaza Strip, 45 miles away from Tel Aviv.

Still, this year's Eurovision is not without its early buzz. Madonna will perform during the show at the halfway point of Saturday's Grand Final, to promote her new album Madame X, due out next month. And Will Ferrell is filming scenes around the Tel Aviv Expo for his upcoming Netflix original film, Eurovision, directed by David Dobkin (Wedding Crashers).

Much like the Olympics, making money off the song contest has often proved to be a challenge for host countries. Portuguese broadcaster RTP reportedly lost about $4.5 million after hosting last year in Lisbon, as ticket sales, advertiser revenue and sponsorship failed to match or exceed its investment. 

Stockholm reported that Eurovision tourism brought in about $27 million in revenue when the Swedes hosted in 2016, with Eurovision 2013 in Malmö, Sweden, netting $25 million. 

Countries sometimes try to leverage the event. Azerbaijan spent a record $62.5 million on Eurovision in 2012, with a bigger mission to gain global exposure as the country was competing for the 2020 Summer Olympics.

War-torn roots

What started in 1956 in the war-torn continent as a friendly and competitive way to unify people in music for one night a year has ballooned into a high stakes conglomerate that now draws some 200 million viewers worldwide.

Following the collapse of the USSR and the dissolution of Yugoslavia, several independent countries became active members of the European Broadcasting Union and eligible to compete. That led the contest to expand to a weeklong soiree with two preliminary semi-final broadcasts, which pare down the contestants to the final 26. The finalists include the host country and the "Big Five" -- France, Germany, Italy, Spain and the United Kingdom. (As the biggest financial contributors to the EBU they qualify automatically.)

Each European country is represented by an artist it chooses to perform an original song. After a rigorous voting process, consisting of a jury in each country selecting their favorites and the public tele-voting during the live broadcast, a winner emerges whose country will host next year's Eurovision.

Although not in Europe, Israel has been a member of the European Broadcasting Union and a participant since 1973. Australia, where Eurovision is a popular telecast annually, was invited to participate five years ago and has become a mainstay.

"Eurovision is a living and breathing organism that keeps evolving over time," said Alon Amir, the author of Three Minutes of Eternity, a book about the contest. 

"While a great performer and a great song are still the bread and butter, it's all about visibility, the message that comes along with it and the publicity campaign that starts three months in advance."

Some countries, such as Russia and Azerbaijan, see the importance and will foot the bill. But in Israel the artist picks up their own tab. A campaign can run anywhere from $25,000 to $6,000,000, Amir said.

EBU members pay a fee to participate and for rights to air the show, with the Big Five each contributing upwards of $500,000.

As for the contest, winning Eurovision is hardly a guarantee for artist success thereafter. But some performances have fueled strong interest.

Even before Israeli singer Achinoam Nini and Arab-Israeli artist Mira Awad finished 16th overall in 2009 with their duet, "There Must Be Another Way," they were lining up interviews.

"We had 300 interviews from Israel-based foreign media that all came to us because it was a political song that drew great interest that year," said Amir, who handled press for the duo. He has accompanied four Israeli delegations and ones with Belarus, Slovakia, and this year, Norway.

Following Eurovision, the duo got hundreds of gigs around the world, including two North American tours, and shows in South America, China and India. Mira signed with Sony Spain.

Other winners have found the exposure shorter-lived. "Euphoria" by Loreen from Sweden was one of the biggest hits in recent years to top the charts after winning Eurovision seven years ago, but Loreen didn't become a star. Israeli winner Dana International from 1998 also failed to capitalize. 

"It sadly ends up in mere local fame, occasional gay club appearances and Eurovision notoriety," Amir said. "But it's undoubtedly a huge platform to gain publicity that countries still highly covet."

The Grand Final of the 2019 Eurovision Song Contest in Tel Aviv will take place May 18.