When a suicide bomber took the lives of 22 innocent people as the crowd was leaving the Manchester Arena on May 22, a distraught Ariana Grande was backstage confronting a responsibility few pop stars encounter: making sure the crew members, dancers, truck and bus drivers, lighting and sound technicians, stylists, caterers — and fans — were able to exit the venue unharmed. Once her tour manager and security detail assured her that all were safe, Grande declared without hesitation that the tour was canceled, said a source close to the singer.
Returning home to Florida, the 23-year-old performer was inconsolable for days, but a business decision beckoned, and with that came a realization that the show must go on. The singer, manager Scooter Braun, her agents at CAA and promoters at Live Nation made the call to suspend the “Dangerous Woman” tour for seven shows. The tour picks back up in Paris on June 7. Three days before that, Grande will stage a massive benefit concert in the city of Manchester, for which the artist will recruit other performers. Says an insider: “Live Nation agreed to step up, and the city is incredibly supportive of the event. Manchester is a tough city; it can’t be defeated.”
While financial concerns are always a distant second to human ones, stopping an 80-date tour in its tracks is a costly decision and comes with collateral risk. Cancellation insurance might not cover the loss of revenue, such as ticket-holder refunds, grounded personnel and equipment, and transportation and cargo costs that come with rerouting the massive production. Delays can result in the loss of hundreds of thousands of dollars a day and can easily add up to millions in the span of a week.
“A tour is a giant, moving enterprise and a house of cards,” says attorney Jill Berliner of Rimon Law, an expert in terrorism-related insurance recovery who represented Foo Fighters in their legal battle against Lloyd’s of London (the two settled in October 2016) over this very issue. “Even a little disruption, like if one truck gets into an accident, can completely throw you off. But something like [a terror attack], you don’t know what to do next.”
As live-entertainment events have come under attack by terrorists — so-called soft targets, like the Eagles of Death Metal show at Paris rock club the Bataclan two years ago, where 89 were killed — the impact these tragedies have on the livelihoods of artists and the businesses around them is vast.
In Foo Fighters’ case, the band canceled shows in Turin, Italy and Paris scheduled for the days after the Bataclan attack. The group argued that it could not take the stage due to a myriad of reasons: For one, the border between France and Italy, where the band was due to play the day of and after the Paris attack, was closed. The attacks also prompted a countrywide day of mourning in Paris, and parts of the city remained under martial law. And, most significantly, the band said, it too had received a credible threat via an Islamic State-related hack of its website. Lloyd’s countered with a “seemingly never-ending series of requests for increasingly irrelevant information,” Foo Fighters noted in its lawsuit.
The concert industry is experiencing record profits and growth thanks to a robust market. Live Nation, the world’s biggest promoter, reported revenue up 17% year over year to $1.4 billion for the first quarter of 2017. “This year we have booked more shows, sold more tickets and have more sponsorship commitments than ever before at this point of the year,” chairman/CEO Michael Rapino said in the company’s earnings report. Yet there are few, if any, safeguards against such a debilitating financial blow as the one that rippled out from Manchester.
If anything, costs have snowballed to include expensive and difficult-to-obtain insurance that, more often than not, becomes a tug-of-war as claims for coverage are made in the months following an attack. The so-called terrorism rider, an additional policy to the more standard cancellation insurance (including Non-Appearance, typically 1.8% to 3% of gross revenue, with the ‘terrorism option’ adding an additional 0.15 to 0.2% of gross depending on the venue location), is meant to cover expenses such as getting a crew to safety, hiring additional security and storing or moving equipment should a date be “canceled” or “postponed” or “rescheduled” (each word pays out a different formula, with the insurer always looking for the cheapest option). Further considerations: food and lodging for vendors contracted to travel with the caravan, be they drivers or riggers or sound guys.
On the “Dangerous Woman” tour, also insured by Lloyd’s, Grande’s average gross per show is nearly $630,000, with average ticket sales of more than 10,600 per night, according to Pollstar. The singer stands to make over $50,000 in merchandise every night — $4.7 million in revenue a week.
“Making a giant overview decision comes with enormous pressure,” Berliner said. “In the moment, the concern is for the safety of the artist, the fans and the crew,” but also in that moment, the artist’s advisers “need to be extremely careful when making public announcements and with the words they’re using,” because ultimately, they’ll pay for it.
As will the concert industry, suggests one live music insider. “If parents start telling their kids, ‘You’re not going to that show,’ the pop arena business will take a big hit, and it could be a year or longer before that business recovers.”
Other scheduled concerts at Manchester Arena — a run by Take That on May 26-28 and Kiss on May 30 — have also been called off. In its announcement, Kiss wrote: “In light of recent events a canceled rock show seems of such little consequence.”
While the cost of additional security for the touring party is shouldered by the artist, the additional manpower needed for venues is borne by the promoter.
“Concert promoters right now are looking at double-digit increases in budgets to take additional security into account — I’d say at least 25% to as much as 50% in costs,” said Ray Waddell, senior VP of media and conferences for Oak View Group, a Los Angeles-based investment and development company specializing in live entertainment that was founded in 2015 by former AEG CEO Tim Leiweke and veteran artist manager Irving Azoff. “Ultimately, fans will pay for that at the box office, but for tours already on sale and teed up, it comes out of the bottom line.”
“There will be more costs involved, for sure, but it’s worth it,” says Matt Galle, a senior agent at Paradigm Talent Agency who represents rising pop singers Shawn Mendes and Halsey. Mendes, an 18-year-old Canadian pop star, was in the middle of a sold-out 21-date headlining European arena tour at the time of the bombing; he’d played Manchester Arena just three weeks before. Mendes decided to complete the remaining five dates of the tour. The singer’s team felt confident with the decision because, “We’ve had phone calls with so many people, our security, arena security the promoter, to make sure the venues were taking extra care and that the promoters were messaging that,” Galle tells Variety. “You want parents to feel comfortable dropping their kids off, and you need to know that fans are going to be safe. What else are we doing this for?”
On May 26, Grande herself addressed the tragedy in a heartfelt letter to fans. “From the day we started putting the Dangerous Woman Tour together, I said that this show, more than anything else, was intended to be a safe space for my fans,” she wrote. “A place for them to escape, to celebrate, to heal, to feel safe and to be themselves…. This will not change that.”