Today, the touring industry is taking stock of the potential impact that the U.K.’s exit from the European Union may have, as major world tours from Bruce Springsteen, Beyonce and Rihanna storm through the British and European stadiums this summer.
What Brexit Means For The U.K. Music Business
Veteran music business accountant Bill Zysblat, partner in RZO Productions (and David Bowie’s longtime business manager), says reports that acts touring the U.K. could be looking at as much as an eight percent pay cut — due to the Brexit-inspired crash of the British pound to its lowest exchange rate in 30 years — do have some basis in reality, but the impact will be to some degree offset by other factors.
“First of all, it’s not just the income, but the net,” Zysblat explains. “Sure, your gross in [revenue] has gone down, but so has the cost of everything, [such as] hotels, travel, etc. So, it’s really just the net that gets hit, which is important, but a fraction of the gross.”
And at the moment, “hedges are all over the place,” Zysblat says. “We did some with [pounds] Sterling last week that we knew had to be used in U.S. dollars later this year. It’s not a hard thing to do, but not for the faint of heart.”
John Reid, who oversees Live Nation’s U.K./Europe operations, predicts Brexit “won’t affect overall business” for the world’s largest promoter, at least in the short term. “We just have to pay continual and close attention to currency swings, both long and short term,” Reid says. “The bigger picture is I hope it doesn’t tip the EU into deeper economic recession.”
The U.K.’s exit from the EU could also impact immigration and visas, and “bringing gear into and out of the U.K. will get harder,” Zysblat predicts. “But, in the end, it all comes down to currency exchange. In the short term, it’s bad for U.S. acts overseas, and good for overseas acts in the U.S. The rest is just noise and hassles.”