Concert promotion and risk

[micah]

Question for those who are familiar with concert promotion ...

What happens if something Really Bad happens -- such as the band missing a plane connection, or (heaven forbid) something worse -- and the band cannot make it to the concert?

Obviously, (I would suppose) the concert fee would be refunded. But what about the money into promotion, renting of venue, airline tickets, and all those other expenses? Is the promoter left holding a $10k+ debt and zero income and nothing to show for it? Obviously, the ticket price would have to be refunded to those who purchased one.

It's especially risky here in South America, where planes are not always as on-time as they are in the States.

Fortunately, they will be in Colombia before the potential concert in Ecuador that I am (tentatively) planning. That takes some of the travel risk out since there is a nonstop flight (not so from Argentina, where they would have been coming from). But there is only one nonstop that would get them here in time for the concert. What if it is cancelled?

I think I would have to allow a full day between Colombia and here to minimize this risk.

But there are other risks -- it's not impossible that some indigenous group could be on strike, shutting the whole city down. It happened in April for over a week!

Have other concert promoters worried about this? Is there insurance one can buy for this type of thing? Any idea about what it would cost?

Thanks!
Micah

[brent]

It depends. There are no black and white answers. It is contract and band dependent. Actually, most pro tours that I have worked on, the band gets paid 50 percent up front, and 50 when they arrive. If there is an act of God, the band still gets paid, no matter what.

That is why you get insurance, and have money to risk. If you cannot affords to part ways with the costs, meaning it is not chump change to you, then you have no business being a concert promoter. That means that you probably don't have the money to cover lawsuits, etc if there were to be civil unrest, disorderly acts among the concert goers, etc.

Many times on regionals, the band would do a deal for the door, so the band did not get paid the other 50 percent until after the show. Many times fire arms were flashed to get the promoters to belly up with the cash. Most of them lie about door counts.

[sue d.]

Obviously, (I would suppose) the concert fee would be refunded

As Brent said: not necessarily. Often the concert would be rescheduled, but in the meantime - the band keeps the deposit.

But what about the money into promotion, renting of venue, airline tickets, and all those other expenses? Is the promoter left holding a $10k+ debt and zero income and nothing to show for it?

Pretty much so, yes.

There is insurance you can buy to cover these kinds of unseen problems, but I really don't know the cost. That would definitely be something you should check in to, seeing as the flights and such are so unreliable in your area.

What if it is cancelled?

You would be left with all the expenses anyways.

I've always said, being a promoter is one of the most thankless jobs in all of music. You take all the risk, and stand to lose your shirt if things don't work out.

If you can find a way to raise the funds before you ever sell a ticket - that is the way to go. At least you will have some cash in hand in case "something bad" does happen.

[micah]

Thanks for the info. If anyone can point me to a possible insurance policy, I'd appreciate it. I think that's pretty much necessary.

Then, I suppose I should find a local policy here...

[micah]

Ok, I think I found one myself. Will send them an email now.

http://www.csicoverage.com/special-event-insurance.html