Event organisers are facing an unprecedented cashflow crisis. Mass public gatherings are banned in a number of countries around the world, making it impossible (and in many cases illegal) to host festivals, sporting events, theatre shows and other live events. The majority of organisers are then left with little choice but to cancel or postpone.
Consumer protection legislation in many of the affected countries (particularly members of the EU) means that organisers must provide customers with a full refund if an event is cancelled. However, many organisers are unable to cope with the sheer volume of refunds, on both a logistical and a financial level. In Germany, members of promoters’ association BDKV estimate that they will lose a combined €1.25 billion – and that is just for the period from March to May. In the UK, it’s estimated that artists and managers alone are expected to lose in excess of £60 million if the current ban remains in place for six months.
As a result, there have been calls from organisers across a number of countries for a relaxation in consumer protection legislation, either to extend the period for processing refunds to 365 days, or to allow organisers to offer a non-monetary alternative.
It seems such calls have gained some traction across Europe. It’s been reported that the Italian Government has approved measures that will allow organisers to offer vouchers rather than refunds for tickets purchased for an event. Germany is also considering reportedly considering similar measures.
The UK Government has not confirmed whether it’s considering any relaxation of existing consumer legislation. Until such an announcement is made, UK organisers and primary ticket retailers should generally refund tickets in full.
The position is a little trickier when it comes to secondary ticket retailers, such as StubHub. There is usually less protection for customers who have purchased tickets through these retailers, and whether or not a refund is due will depend on the terms and conditions. Watch this space, however, as a $5 million class action lawsuit has recently been filed against StubHub for refusing to refund customers for cancelled events. At the end of March, StubHub’s President, Singh Cassidy, announced that if an event is cancelled then customers would receive a 120% credit. This is a significant U-turn on their previous “FanProtect guarantee”, which promised customers a full refund if an event was cancelled.
It’s undoubtedly an incredibly tough time for event organisers. However, unless changes are made to existing consumer legislation, event organisers’ (lawful) options are limited. Some have called on customers to consider delaying their request for a refund or, in the cases of smaller independent organisations, asked customers to consider their ticket price as a donation. These options rely on having developed a relationship of trust and goodwill with customers. The organisations who have communicated openly and regularly with customers over the recent weeks are more likely to succeed in such appeals to their goodwill.
Read more about the implications of the current pandemic on the live events sector here.
“We ask the European Commission, MPs and the Culture Committee to extend this lifesaver to the other countries which, through the introduction of vouchers to replace tickets, allows the spectator not to give up their concert and companies not to go to default,” comments Assomusica president Vincenzo Spera.