How Hurricane Sandy Will Impact The Concert Industry
Bands and venues have contracts in place that limit their losses, but everyone involved stands to lose money as a result of the storm.
The concert industry is bracing to take a huge hit in lost revenue and delayed profits in the wake of Hurricane Sandy. Dozens of concerts scheduled this week at venues in New York City and along the east coast are being cancelled or postponed, from small club gigs for acts like Grimes and Ghostface Killah to arena shows for stars such as Journey and Bruce Springsteen. Many other shows, such as The Smashing Pumpkins' gig tomorrow night at the recently-opened Barclays Center in Brooklyn, hang in limbo, though it's unlikely a show like that will go on if the city's public transportation system is still shut down.
Virtually everyone involved in the concert industry, from artists and managers to venue owners and promoters, will take a hit as a result of this chaos, but luckily the industry is designed to anticipate these sort of unforeseeable problems. Though many venues don't take out insurance policies for loss of revenue due to weather conditions, there are often force majeure or "act of god" clauses in concert contracts that can ease the losses for both the artist and venues in the case of a catastrophe like Sandy. (If a band cancelled a show for most any other reason, they are typically forced to pay out a substantial penalty fee.) Even still, the promoter and venue will lose cash hyping the gig and the artist will lose money and, in the case of postponements, deal with the headache of rerouting their tour down the line.
On top of that, acts who are out on the road will often have to burn money as they stay in a holding pattern while waiting to make a decision on whether to cancel or postpone a gig. This is why a lot artists have yet to make a call regarding shows scheduled for later this week – the consequences of backing out of a performance can be so long-ranging and economically devastating that a decision can't be made lightly.