Well, this Summer is rockin’, that’s for sure. We are covering one of the hottest tours with Chicago and Earth, Wind and Fire c/o Tris Imboden, and, the Foo Fighters are back in the game and simply tearing it up on their latest tour trek. However, a scary and unfortunate injury to frontman Dave Grohl just weeks ago almost derailed the Foos’ current North American tour. That leads us to our question at hand; what happens when a tour is cancelled? What is the financial cost of a cancelled tour?
Before we get to our answer, although tour cancellations don’t happen often it is important to understand that they do indeed happen. (You can add to the above examples Supertramp which just announced that because of health issues affecting co-founder and vocalist Rick Davies that the band had to cancel its European tour dates scheduled to start in November of this year).
In fact, it wasn’t that long ago that Iggy Azalea explained that because of a “creative change of heart” that she was cancelling her 2015 Great Escape arena tour.
You might also remember that a few years back Lady Gaga was forced to cancel the remaining 22 dates of her Born This Way Ball tour due to a labral tear in her right hip. Finally, as another example of a major cancellation, consider that in 2010 during U2’s 360 tour that the band had to postpone 16 stadium dates after it was revealed that Bono had to undergo back surgery. Point being that cancellation is always a real possibility for a variety of reasons. But if cancellation happens, then what?
First, if a date is cancelled you should know that ideally everyone involved behind-the-scenes has previously signed off on a new plan in advance. This way, they can announce a new date to fans at the same time the artist cancels, so they know it’s not canceled forever.
The second part of the question, however, is the big ticket item. Essentially, it asks what is the cost of cancellation?
Timing can play a part here. For example, consider Drake, who once cancelled a show in Philadelphia show an hour after it was supposed to start. The timing of that cancellation meant that all the work that was done by the venue and promoter (e.g., venue rented, advertising paid for, tickets sold, local vendors hired, ticket-takers and staffers and security already on site) came at a steeper price. Thus, if the show was scrapped a couple days in advance, the promoter would have still have to have paid for the venue, but maybe not the staffing fee for all the workers.
Second, there are mitigating actions that can help reduce the loss such as insurance which might absorb some of the costs. Cancellation or nonappearance insurance is often acquired although that is not without its limits. For example, typically an artist can only insure 100 percent of their guarantee or the minimum fee they’ll be paid by a promoter on a show.
But returning to Lady Gaga for a second, consider the sheer number of people affected by a cancellation. In that case the promoter (Live Nation) was affected as was Gaga’s management team. Also affected were Gaga’s band members, dancing troupe, personal traveling entourage (wardrobe, makeup artists, chefs, and trainers), and, crew members.
All in all that represented about 130 people. Add to that the venue cottage industry which is ready to accommodate fans such as food and merchandise vendors, security, ushers, box office and venue staff, paramedics, and other professionals that ensure a concert runs smoothly. In total that’s a lot of people.
But let’s delve deeper. Let’s translate such an event into dollars and cents and to do that, let’s imagine that the Foo Fighters’ North American tour was cancelled. What would that have potentially cost?
Well, when Grohl was injured earlier this year (in Sweden) the Foos were commanding over $1 million dollars for stadium level shows.
As it turned out the band actually did cancel several European shows (between June 14-26). However, the bigger concern was that the band was approaching the North American leg of their tour which they fortunately wound up starting on July 4 in Washington, D.C. But, suppose they didn’t rally? Suppose that entire North American tour was cancelled?
First, consider that the cost of returning the Foos’ equipment and gear to the States (from Europe) was about $200,000. Admittedly, that was a cost that the band would incur anyway however, if the North American tour was cancelled there was nothing to offset this cost.
Second, as we discussed, consider all the salaries, per diems, and, hotels for crews and tour associates. The numbers were potentially staggering. For example, estimates had the gross from the 44 date North American tour at $50 million dollars. Additionally, the North American tour was projected to generate between $5 and $10 million dollars in merch sales. You also have to consider the lost revenue from the cancelled European dates (which included lost performance fees and expenses) were estimated at $10 million dollars.
In the end, tour cancellation (or even a portion thereof) is an expensive venture. It can be a real problem for many starting with the artist and trickling all the way down to the local food vendors at the venue. Indeed, in the case of the Foo Fighters despite their popularity and success who is to say that if they had to actually cancel their 2015 North American tour that such a cancellation would not have seriously crippled (financially speaking) the band? Heck, even “successful” tours have almost put performers out of business. Case in point was Lady Gaga’s 2009 Monsters’ Ball Tour that Gaga claimed made her bankrupt.
For these reasons tours are a big deal and cancellation is never an attractive option. In fact, it may be unavoidable in some circumstances like with Dave Grohl breaking his leg. Either way, the next time your favorite band cancels a tour try to be understanding. It’s highly probable that such a decision was not made on a whim. Yes, it’s disappointing and potentially costly for the fan but as you can see, you are not alone in that regard.