NO doubt many Business Class readers would have had a flutter last week on the Melbourne Cup. And while most once-a-year punters will have lost some small change as Shocking stunned the field at Flemington, spare a thought for those in an industry where a wrong bet or hunch not followed up on can spell financial disaster.
As big a business as it may be, it seems those who organise, manage and promote outdoor concerts and events are somewhat partial to a punt, for want of a better term.
Entering its 26th year, the Leeuwin Estate concert series in Margaret River is WA’s most established and, arguably, best-known outdoor concert event.
The winery’s marketing director, Simone Horgan-Furlong, daughter of Leeuwin founders Denis and Tricia Horgan, believes her father took a big gamble when starting the concerts in 1985 after an opportunity to showcase the London Philharmonic Orchestra presented itself.
“When Denis came up with the idea we really questioned its viability,” Mrs Horgan-Furlong tells Business Class.
“But we made it work and persevered and people supported it so in the end it was very brave and very smart.”
The concerts are the family company’s primary form of advertising, as it can’t compete with the marketing budgets of the larger wineries. The events consistently sell out to crowds of about 6,000 people at $125 each for a general admission ticket, however a quarter of those attending would fill out the corporate marquee, which comes with an even bigger price tag.
Mellen Events managing director Brad Mellen, who is responsible for organising the Future Music Festival, Summerdayze and the popular A Day on the Green and An Evening on the Green events at Sandalford Winery (including the recent addition of Sandalford’s Margaret River winery as a key concert venue for WA), openly admits to being a punter and can clearly identify the hardest aspect of his job.
“On any individual show, if you don’t sell any tickets you will be responsible for all the costs regardless of your income and you will lose a considerable amount of money [so] you’ve got to be a punter,” Mr Mellen says.
It is a sentiment shared by many event promoters including Sunset Events founder David Chitty.
“The punt is the [artist] programming; it’s an educated guess on the acts you think will connect with the audience and motivate them to buy tickets,” Mr Chitty says.
Sunset Events was established as an outdoor cinema promoter 10 years ago to manage the Sunset Cinemas.
Today, the company is a leading concert events player and handles numerous festivals including the state government sponsored One Movement Music Festival, the West Coast Blues n Roots, Stereosonic and the Southbound event in Busselton.
Local event industry sources suggest the One Movement Music Festival, held for the first time last month, booked a massive loss, potentially running into the millions, despite the $800,000 in funding received from the state government.
However, Mr Chitty is adamant any loss is simply part of the overarching three-to-five-year plan for the event.
The One Movement Music Festival is a two-day event bringing local, national and overseas acts together with industry heavyweights such as international agents, critics and record label executives.
For those involved in the business, whether they’re veterans or new to the game, the experience of a successful event ranks alongside financial return as the true barometer for success.
Lloyd Events has only existed for a few years but it already has an annual turnover approaching $2 million.
The company made its mark establishing concerts for smaller audiences at intimate venues such as the Live at the Quarry concerts at City Beach, which seats about 500 people who pay between $60 and $100 for each show.
Lloyd Events director and former lawyer Michael Lloyd says he gets the greatest joy from putting on these events and seeing the pleasure on people’s faces when they leave.
“Venue hire (at the Quarry) is about $2,500 to $3,000 per night, then you add on security costs, and then lights and staging at $4,000 or $5,000,” Mr Lloyd explains.
“You’re lucky to break even, you can even be net down, but I do it for the love of putting on these events.
“Putting on some of those bigger events and festivals, $500,000 or even $1 million can be made or just as easily lost, so there’s definitely a risk.”
Mr Lloyd, who now partners with Mr Mellen in presenting the Quarry gigs, recalls his first meeting with Mr Mellen, which he thinks epitomises the precarious nature of the industry and some of its players.
Mr Lloyd says he was surprised when, mid-meeting, Mr Mellen pulled out a transistor radio so he could listen to a horse race, which he “had an interest in’’.
Mr Mellen says while the work is financially rewarding, the real reward comes from building a concert site from scratch, staging a show and seeing the thousands of people enjoy themselves.
“Costs for Summerdayze varies, it really does vary so it’s difficult to be specific, but you’re talking millions of dollars, in excess of a couple million dollars to stage a show like that,” he says.
Mr Mellen suggests costs for any show could range from $100,000 for security; $200,000 on sound, lights and production; another $80,000 on venue hire (usually paid to the local councils) and $140,000 on marketing efforts through mainstream media.
“There’s easier ways to make a dollar I can assure you,” he says.
Altered State director Ken Knight, the man in charge of the Big Day Out in WA for the past 16 years, is confident the January concert will sell out, but the Perth leg of the giant international tour often actually loses money or occasionally breaks even.
“The majority of the money from the run is made in the larger cities,” Mr Knight says.
“It costs more money to get the entire party to Perth by air than it does to do the rest of the country.
“Big Day Out costs, you’re talking a couple of million dollars, the fencing bill alone is about $50,000 and security and staffing is hundreds of thousands of dollars.”
Mr Knight agrees with other major event organisers in citing the key challenge, apart from sourcing infrastructure, as finding staff.
Despite events being potentially lucrative, the costly logistical challenges can often lead to failures or disappointment, such as the York Jazz Festival, which was largely criticised by artists and those attending for losing touch with local acts, and sometimes can even cause event companies to go broke.
Creative Events Management founder Anne Battley brought some huge acts to Perth, including David Bowie, Jose Carreras and The Beach Boys between 2003 and 2006.
But she says her company is not operating at the moment after “biting off more than we could chew”.
“It usually takes events groups time to build up to get the likes of David Bowie, but we did some big shows back to back and we were financing the whole operation,” she says.
“It’s a huge decision to go ‘ok’ and then put your money down and roll the dice.”
It seems that in work, as in life, not every bet pays off.
