Coronavirus

Concert Industry Faces Cruel, Cruel Summer as Coronavirus Spreads

covid-19-concert-illo-market-bb06-2020-billboard-1548-1583952854
Illustration by Ryan Inzana

As the live business reels, competitors are coming together in an effort to try to make sure their shows will go on.

For weeks, as the threat of the coronavirus loomed in China, then in Europe, the concert business seemed to hold its breath — waiting to see if, and how much, the United States would be affected. That changed on March 6, when South by Southwest (SXSW) announced it would cancel its annual event in Austin, which was scheduled to take place March 13-22. On March 9, after the weekend, the dam broke: Pearl Jam and Zac Brown Band announced that they were postponing their tours, and Billboard reported that Coachella would be rescheduled for October.

By then, the stock market had already fallen 7.8% and Live Nation's shares were down by one-third. By March 11, the market was officially in bear territory, while Live Nation stock had declined 16.6%.

Ten of the most powerful figures in the live business were already working together in order to mitigate the damage, speak to fans with a unified voice and prepare for a smooth recovery. The informal group, which its members refer to as a "task force," consists of the heads of the two major promoters (Live Nation and AEG), the four largest agencies (Paradigm, WME, Creative Artists Agency [CAA] and UTA) and venue development company Oak View Group, as well as supermanager Irving Azoff.

The week of March 2, several of the executives started sharing updates on the spread of the coronavirus on a daily conference call. By the time SXSW was canceled, they had begun preparing for the worst. One talent agency chief executive jokingly wondered whether the informal organization was a coalition "or a mutual suicide pact."

Cooperation among the leading promoters and agencies could be critical to help create a framework to compensate acts, agencies and promoters facing what is predicted to be an unprecedented wave of concert cancellations — especially if it continues long enough to threaten the summer season that represents the lion's share of industry revenue. It could also make it easier to postpone, rather than cancel, some of the marquee festivals that the live business has come to depend on. Goldenvoice, a promotion company owned by AEG, is moving Coachella to October, an effort that will require dozens of artists to change their touring schedules.

So far, much of the talk about cancellations has involved festivals — SXSW, Coachella and Miami's Ultra Music, which organizers called off on March 4. But as the coronavirus spreads to more cities, concerns are growing about concerts in arenas and even theaters. Right now, only Pearl Jam and Zac Brown Band have postponed their dates, but more acts are likely to follow now that the state of California is restricting large public gatherings "at least through March."

The situation is already dire in Europe, with large events banned in France, Spain, Italy, Poland, Greece and the Czech Republic. In an effort to project a message of calm, European promoters who usually travel to the International Live Music Conference in London agreed to attend this year, and ILMC chief executive Greg Parmley says the event only faced a 15% attendance drop in 2020.

In the United States, promoters and agencies are already trying to figure out how to ease the nerves of fans worried about how, or if, they'll be able to get their money back. Many executives were alarmed when Ultra organizers announced that they wouldn't offer refunds, on the grounds that it could erode the trust the industry depends on. That, coupled with the fallout from the unexpected cancellation of SXSW, made it that much more important to reschedule Coachella rather than cancel.

That creates a common interest for companies that normally compete aggressively with one another. In fact, one member of the task force says that Live Nation supported AEG's efforts to save Coachella. That makes sense: The live business is more interconnected than ever. While Live Nation is promoting most of this summer's arena tours, ASM Global — the company created by the merger of AEG and SMG — own and manage many of the venues they'll play. Two of the most important agencies in Nashville, WME and CAA, often book artists who appear on the same bills. Thomas Rhett, who will headline the Stagecoach festival — which is being moved to the week in October after Coachella — is a client of Live Nation-owned G Major Management who's represented by WME. Another headliner, Carrie Underwood, is represented by CAA and will play a number of Live Nation sheds this summer. The same is true in other genres: Rage Against the Machine, booked by WME, is now scheduled to play arena shows for both Live Nation and AEG.

"If Coachella or Stagecoach get canceled, everyone loses, and that is not an outcome anyone wants," says a source in the concert promotion business. And because tours only work financially with a certain number of dates, everyone involved has an interest in minimizing cancellations — even if they would primarily affect rival companies.

"The worry for me is, how many shows can you lose and it's still worth touring?" wonders Randy Nichols, manager of hardcore group Underoath, which will tour with Slipknot this summer. "You get to a point where there is a percentage of shows that get canceled where it's cheaper to not tour."

Phoenix promoter Stephen Chilton with Psyko Steve Presents said he's also worried that promoters could use the coronavirus as an excuse to call off events with low ticket sales since cancellations ordered by local health officials trigger the force majeure clause of a contract, which can free promoters from having to pay an artist's guarantee. Chilton thinks that's a hazardous path to go down, though.

"Agents and managers have pushed back hard on force majeure causes and deposit requirements even before the coronavirus," says Chilton. "Promoters should use this time to double down on this fight and stick to traditional standards. I can't see many artists wanting to look like they're trying to profit when fans, venues, staff and promoters are suffering. It's one thing for an artist to want to keep the paycheck from an event that failed due to organizers' incompetence — it's another thing to try and get paid off of a global epidemic."

This article originally appeared in the March 14, 2020 issue of Billboard.

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