COVID-19 Opinion: Cancelled Shows and Refunds from Artists, Agencies, Promoters & Ticket Providers

COVID-19: cancelled shows and refunds.
Author : 6AM
March, 16 2020

COVID-19 Opinion: Cancelled Shows and Refunds from Artists, Agencies, Promoters & Ticket Providers

The COVID-19 pandemic is affecting industries, businesses, families and individuals everywhere, and the entertainment industry has been one of the first sectors to be gravely affected by closures imposed to stop the spread of the novel virus. Due to COVID-19, industry professionals all over the world are now having to navigate the uncharted waters of mass cancelled shows and refunds.

As things stand the Center for Disease Control and Prevention (CDC) now recommends that “for the next 8 weeks, organizers cancel or postpone in-person events that consist of 50 people or more throughout the U.S.”

Local and state officials throughout the country have written executive orders to such extent, closing nightclubs, music venues, sporting events, festivals, bars, wineries, breweries and even restaurants (partially or otherwise) throughout entire cities, counties or states.

As a result, all electronic music events in the United States (and many other countries, especially in Europe and Asia) are cancelled for 30-60 days, with the strong possibility that these cancellations continue into summer pending how adequately the virus is contained in various areas.

These are unprecedented times, with promoters, venue owners, artists, agencies, management companies, vendors and related event staff all losing income for the foreseeable future. The financial burden is compounded by the uncertainty of when events will start again, as well as the knowledge that not every single player in the electronic dance music scene is on the same level playing field. The gap between fees for artists as well as that of funds for promoters is massive. Some DJs make $40,000 per gig or even much more, while others make less than $2,000 per performance. Some event companies are backed by or are a part of multi-million dollar corporations, while others are individuals whose events are smaller, perhaps even a side-gig, and purely driven by their passion for music.

So what has been happening with these cancelled events? I am both a promoter and an agent, so let me illustrate what my experience has been dealing with cancellations in the last week.

As a promoter we have announced the cancellation of all our events for the next 30 days, and will likely be cancelling more as time goes by and the virus remains a threat. We took this difficult but necessary choice three days before the Mayor of Los Angeles announced the executive order closing all entertainment venues for the month. We immediately instructed our exclusive ticket vendor, to blanket refund all ticket buyers and we announced this measure to all our followers on social media.

We contacted all agents for artists booked during this time period and informed them of the cancellation. Regardless of our choice, most bookings would have had to be cancelled anyway due to President Trump’s decision to halt all incoming flights from the EU and, more recently, also the UK and Ireland. It is important to note that all airlines are offering refunds for flights booked during this unprecedented period in the form of travel credit, so any artist who had travel booked in the coming months has the option to use their travel funds credited for future travel. The idea is that this pandemic won’t last forever, right?

The response from agencies I contacted has varied, depending on the agency. While all have agreed to return artist fees, pending artist agreement to do so, none of the agencies I have been in contact with are willing to return their booking fees if we consider the show as “cancelled” rather than if work on a rescheduled date. Note that it’s almost impossible to work on rescheduling bookings right now due to the heavy uncertainty on when events will start again, coupled with the fact that artists are having to reschedule many months of shows that have been cancelled in markets throughout the world but mostly Europe, Asia and the Americas.

One agency agreed to refund 50% of the booking fee, while three others insisted on keeping the full fee if the booking was cancelled rather than rescheduled. The reasoning for both choices is that their service as an agency has been rendered, albeit for an event that hasn’t yet taken place and for which there is massive uncertainty as to when it can take place.

To clarify, we were given one of two choices: 1) “cancel” the show, receive the artist fee back, lose the booking fee and pay another booking fee in the future if we are booking the same artist again or 2) “reschedule” the show, without any refunds from either artist nor agency.

Let’s recap. Agencies will keep the fee and work on the rescheduled show for the future without an additional booking fee if the artist also keeps their fees, or they will keep the fee and require promoters to pay a second fee if promoters ask artists for a refund now in order to have some cash flow during these difficult times.

Perhaps it’s just me, but something doesn’t quite add up here.

I must underscore why I believe being given these two specific choices to make is instrumentally dangerous, possibly even fatal, for promoters. Remember when I said earlier that you cannot consider all promoters the same? Here is a simple example of why that is: Insomniac or Goldenvoice rescheduling a booking for late 2020 or early 2021 is not the same as a small local promoter in a city like Portland or Boston rescheduling a booking for late 2020 or early 2021. Smaller promoters have a lot less cash flow and often depend on the returns for each event to throw the next one, oftentimes organizing events at a loss or break-even for the pure love of the music and purpose of keeping their local scene alive. The same cannot be said for massive companies that organize events with budgets (and revenue) that put to shame that of smaller local event organizers.

Again for the purposes of full transparency, treating us (the promoters behind WORK, COMPOUND, REFORM and affiliated events) the same was as treating promoters in markets such as Phoenix, Portland, Seattle, Boston, etc is also not the same thing. The Los Angeles techno market is bigger and with years of history on our shoulders, we can weather months of no events and “rescheduled” shows without refunds in ways that other promoters cannot. But even for us, there’s a limit. All promoters have mortgages, rents, bills and food to pay for, regardless of whether some have other streams of income or not.

I know some smaller local promoters with up to 3-4 shows cancelled in the next 3 months, meaning that not only are they not making any potential income from these shows, but are also faced with either of two options: losing booking fees paid in order to receive a refund on artist fees now to pay their bills and survive or, as an alternative, not seeing the potential return of their booking and artist fees until many many months down the line when the shows are finally and eventually rescheduled to take place.

I must add that as a promoter I have not had any artists refuse to pay back their artist fee, but I have now heard from three reliable and internationally touring artists that there are several agencies and artists refusing to return artist fees in full for shows cancelled due to COVID-19.

As an agent myself I, of course, agreed to all cancellations for artists I represent and offered to return booking fees I was paid. I have also strongly recommended to all my artists that they should refund their artist fees in full, but at the end of the day the decision is theirs to make there.

I have now heard two separate artists bring up “Act of God” as the stipulation on their contract that gives them the right to not refund for cancelled shows as caused by the COVID-19 pandemic. Acts of God provisions, also called “Force Majeure” clauses, relate to events outside human control, like flash floods, earthquakes, or other natural disasters. Generally, these provisions eliminate or limit liability for injuries or other losses resulting from such events. While I understand that the cancellations here are outside of the anyone’s control, and thus fall under the “Act of God” clause, it doesn’t mean that they would walk away with any part of the artist fee as the contract is actually now void as neither party can legally perform.  Given that in all cases artists are able to recoup the travel costs for cancelled bookings, why wouldn’t an artist do what’s right by promoters and refund the fee and then work on a new show once things are back to normal?

There is absolutely an argument to be made for booking agencies who have performed their duty booking a show that has since been cancelled, and that is something I recognize from a legal and contractual standpoint. They booked a show, issued contracts, and are now having to deal with many cancellations and the admin that goes into it there. What doesn’t make sense is the discrepancy between the two aforementioned “options” being given by agencies we have dealt with. Further, an argument for “doing what is right” within our industry can and should be made.

While all of this has been going on, I have also noticed the massive differences in the way ticket refunds are being handled by ticket providers. Some are offering full refunds including ticket handling fees, while others are not, choosing to keep ticket handling fees as an incurred cost for their services. To be clear, some ticketing companies are choosing to keep not only the credit card transaction fees incurred for their work (which is fair, as it is a cost incurred) but also the fees they make as a profit for each ticket sold.

Today Resident Advisor released an article explaining their stance on COVID-19 related cancelled shows and refunds, specifying their poilicy in regards to RA fee refunds: “RA is an independent company. Due to the huge increase in costs, support and infrastructure required to handle thousands of cancelled events throughout the world, we need to retain the full booking fee, in line with our terms. We are using this money to cover the costs of providing our ticket services—our staff, the infrastructure for 24/7 support and the payment card-processing fees that we incur on each transaction (both the original as well as the refund).”

With all the above said, below is a true scenario of how things are looking for our events in Los Angeles in the next 2 months or more:

Event attendees: all tickets refunded but they lose all ticket handling fees.

Promoter: no future income at all and either of two options 1) lose the booking fees paid for the next two months and receive a refund on artist fees or 2) reschedule the shows for future dates without any refunds.

Agencies: no future new income, but agencies keep the booking fees for cancelled shows that were scheduled to take place in the next few months.

Artists: no future income, and all artists we have personally booked are okay with issuing refunds on cancelled shows. This is however not the case with every artist, as some are refusing to give full refunds to promoters we know.

Ticket Services: no future new income, but many ticketing platforms are choosing to keep all ticket handling fees for future shows that have been cancelled.

Venue Owners, Vendors, Event Staff, etc: no future income.

I understand that these are unusual times and that collectively we are facing something we have never faced before in our industry before.

This is an opinion piece, and as such, this represents my opinion and my opinion only. I believe we all have a moral obligation to look beyond our personal interests and to safeguard the local music scenes of the world with a long-term future in mind. Collectively, each entity above is a part of a larger eco-system that depends on each of the other elements in order to survive. We are unsure how long these closures will go on, but we all know that we are all facing a lack of income for 2 months or maybe even more.

As far as ticket service providers, I understand the need to not refund credit card transaction fees, but why are some making a profit off of cancelled events where refunds are being issued by promoters?

In the example of Resident Advisor, the article cites “a huge increase in costs, support and infrastructure required to handle thousands of cancelled events throughout the world.” In a scenario where RA are the ticket provider of a cancelled show due to COVID-19 they are the only entity in this eco-system that is still guaranteed to be earning from cancelled events that are being refunded, and who will then earn again when promoters announce rescheduled shows months down the line and partygoers purchase new tickets.

My broad question is simple: why are some entities and individuals making money off of future cancelled shows, while others are facing not only a lack of income but also a lack of refunds for services that won’t be rendered for months to come?

Something is not right here. I vehemently believe that it would be correct for all entities in this eco-system to be on the same level playing field, treating all future bookings that aren’t taking place due to COVID-19 the same way. In order to support the survival of event organizers everywhere, and to support the millions of music fans everywhere who keep our local scenes alive, promoters, agencies, artists and ticket service providers should at least offer full refunds for future shows that are being cancelled due to COVID-19.

At the risk of losing personal relationships with artists, agencies and other entities in this industry I feel the moral obligation to speak up on the subject of COVID-19-related cancelled shows and refunds as openly and candidly as possible. There is no guidebook on how these cancellations should be handled, and while there are contracts and we can argue “Act of God” clauses ad infinitum outside of court, shouldn’t we all be working together in good faith to help one another and keep our local scenes alive?

If individuals and organisations responsible for putting on events can’t stay afloat in the short term, there won’t be a scene for us to enjoy in the future once this is over.

We are all in this together. We will return to the dance floor together.

But it will take everyone doing their selfless part to ensure that all local electronic music scenes are able to come back from the months of unprecedented difficulties we are facing. In order to do so, we must take the necessary steps to ensure we do what is right by our industry peers.

Be good. Do good. That is the first principle of the electronic music industry and one we must always keep top of mind, even and especially through these COVID-19-related cancelled shows and refunds.