When South American concert promoter Move Music signed contracts to bring Katy Perry and System of a Down to play shows in Colombia this fall, the exchange rate was a comfortable 1,900 pesos per dollar. A mere six months later, the value of the dollar has soared to 3,000 pesos, the highest in the country’s history.
“The dollar exploded in just the last couple of months,” says Move CEO Phil Rodriguez, who has booked global acts in Latin America for more than 30 years. “The prices were readjusted when they could be, and when they can’t, it just makes the final results thinner for everybody.” Also on the losing end: consumers, who face jacked-up prices on everything from parking to sodas as the promoter attempts to minimize the sting.
As currencies continue to fluctuate around the world, concert promoters are modifying offers to align with new financial realities, getting creative in their ticket-bundling and prices, and beefing up sponsorships. While some deals are struck in local currency, the U.S. dollar is the norm, typically a guarantee in dollars against net profits.
“Even the Canadian dollar has moved against the U.S. dollar,” says veteran tour accountant Bill Zysblat, adding that the situation is “great for overseas artists touring here, but not the reverse.”
Currency fluctuations are an inherent risk of global touring, says Arthur Fogel, chairman of Live Nation’s global touring division and producer of current tours by U2 and Madonna. While that risk can never be completely eliminated, it can be mitigated by a currency hedge, a type of insurance that protects against fluctuations by locking in future transaction amounts at a certain rate — “hopefully with correct advice on which way things are trending,” says Fogel.
In India, where the rupee has been consistently weak against the dollar, hedges are “the only solution,” says Ajay Nair, director of Only Much Louder, which is bringing Mark Ronson and Megadeth to its NHT7 Weekender festival. “Artists are expecting a [certain] dollar amount,” says Nair. “It doesn’t matter how many rupees you’re spending to get that.”
Consequently, promoters are thinking conservatively. “Overall, the offers in the region this year have been lower than last,” admits Philippe Siegenthaler, co-owner/talent buyer for Absent Papa, which produces some of Colombia’s top festivals. “But the important thing is that bands and management expect offers that adapt to the new reality. Our desire to grow this market is still very open — and very hot.”
–Additional reporting by Anurag Tagat.