The Costs (and Economic Benefits) of Throwing Parties/Concerts/Festivals

I just read a fascinating quick take on finances of a festival written by Patrick Jarenwattananon over on great NPR blog ‘A Blog Supreme’ (full text of the article below the fold). This is especially interesting to me as we evaluate the financial aspects of throwing our JUMP! parties. We’re currently losing money on each party, but are self-financing the party. Obviously, sponsorship would be a great way to bring in some money and break even (even just 30% of our costs as in the article).

For the economic benefit piece – we’re employing around 8-10 people at the venue for one night, as well as a band, our DJ/VJ/percussion crew, and giving some serious business to a local restaurant. So our parties drive money to somewhere between 10-25 people. Pretty nice for a one-night show. But the losses add up, so even though the losses mean some tax write-offs, they certainly aren’t sustainable.

Anyway, I’m fascinated by the numbers on these things and finding balance. I’m of course trying to figure out how to maximize profit (to keep the parties going), maximize artist payments (something I hold near & dear to my heart), and minimize my own financial risk (or loss), keep prices as low as possible (to keep parties accessible to the most number of people), and maximize the cultural experience and the fun factor.

The full article:

Published: December 22, 2010

by Patrick Jarenwattananon

Ever wondered how much money actually gets thrown around at a major jazz festival? The French festival Jazz in Marciac recently divulged some financial data from its 2010 edition, and Frédéric Noiret of the newspaper La Dépêche du Midi recently reported on it. If my Google Translate + cognate recognition are correct, here are some highlights:

Jazz in Marciac generated over 7 million Euros’ worth of economic benefit for the Marciac region.

The festival’s overall budget is 3,455,000 Euro. Public financing makes up 421,000 Euro, while private sponsorship provides 354,000 Euro. Thus, the festival is 72.1 percent self-financed, accounting for additional revenue.

225,000 people came for the festival (up 2.3 percent), and 66,500 tickets (up 8.46 percent) for paid shows were sold.

The festival depended on its 800 volunteers. They would have cost 950,000 Euro to employ at minimum wage alone. However, the festival did host 400 of those volunteers on site for a total of 6,000 person-nights.

17,500 meals were served in all, including musicians, technical crew, staff and volunteers. The volunteers accounted for 11,190 meals alone.

Currently, one Euro is worth around 1.31 U.S. dollars, which is about the exchange rate at the time of the festival this past summer.

I’ve never studied the accounting sheets in depth for other festivals, but one element looks to me to be rather extraordinary. For a festival of such magnitude to generate 72.1% of its revenue by itself — largely in ticket sales, one imagines, though “l’autofinancement” isn’t exactly defined — is a serious achievement. Even Jazz in Marciac says that 2010 was a banner year (an “année record”) for them.

But it isn’t shocking that these sorts of things bring in so much money for their communities. The arts seem to require a lot of money, especially when you bring in Wynton Marsalis, Diana Krall, Chick Corea, Jamie Cullum, Chucho Valdes, Ahmad Jamal and Esperanza Spalding, plus tons of other artists. (That was just in 2010.) But the arts can also be even more massive economic engines; in this case, the economic benefit to the area far outstrips taxpayer cost. Plus, how do you put a value on human creativity? [La Dépêche du Midi: Festival Jazz in Marciac tient la forme (French) / Jazz in Marciac festival takes shape (automated English translation)]

P.S. A nice English-language article profiles the Marciac festival, a gigantic production which takes over a tiny rural town for two weeks every year. [Copyright 2010 National Public Radio]

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One thought on “The Costs (and Economic Benefits) of Throwing Parties/Concerts/Festivals

  1. Good stuff Erich. It seems to me that sposorship / some additional level of third party investment/gain is crucial. All the elements are in place for us to shop for that.

    And balance the boat we will,

    Ryan

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