A whirlwind of speculation persists over why organizers decided to cancel the much-anticipated Squamish Valley Music Festival this year. There are a myriad of possibilities for why event organizers pulled the plug, but it is likely that over the past year the struggling exchange rate became an increasingly prominent factor.
The Canadian dollar has lost approximately 28% of its value over the last two years, dropping to a low of almost 68 cents earlier in the year. It is wreaking havoc on music festivals across the country, with Canadian organizers struggling to find significant excess room in their budgets to cover the high costs of musical acts and talent that want to be paid in U.S. dollars. In fact, most international artists demand that their fees be paid in U.S. currency.
An event production industry insider based in Vancouver told Vancity Buzz that a headliner typically costs at least US$500,000, but this could stretch to even more – up to one million dollars – for an A-list artist who is one of the biggest names in the industry.
For instance, with today’s highly unfavourable exchange rate, a million-dollar act in American currency would cost organizers north of the border CAD$1.34 million. With the unpredictable loonie, this figure could fluctuate greatly in the months to come and throw off tight cash flow schedules.
Then there are all the smaller acts that organizers need to fill their schedules with, each of which could typically be pegged at about US$15,000.
Considering that multi-day festivals have a headliner each day, this could easily add more than a million dollars in unexpected artist fees for a three-day festival like Squamish Festival 2016. And that is only for the headliners.
There are also other costs to consider with hiring artists, like the travel, accommodations, and meal expenses of both the artists and their entourage. In 2015, Squamish Festival had over 70 musical acts – including headliners Drake, Mumford & Sons, and Sam Smith – across four stages.
Even if organizers decided to include more Canadian talent for this year’s event, so that they can allocate more of their expenses in Canadian currency, growing competition from events across the country for the same pool of artists could cause a bidding war and further escalate costs.
Alternatively, organizers could consider including more lesser-known artists in their programming as a way to cut down costs. But this would only hamper marketing efforts by hindering the festival’s competitiveness in attracting festival goers from across the continent.
In the same spirit, raising ticket prices to increase operating revenues, without any reasonable justification, is not the solution either.
It is almost certain that the exchange rate was a major factor in BRANDLIVE and Live Nation Canada’s decision in cancelling Squamish Festival, but it remains to be seen whether other factors were also in play – and whether the cancellation is permanent. It should also be noted that both the Facebook and Twitter accounts of the festival were deleted this morning shortly after the cancellation announcement was made.
Squamish Festival began in 2010 and quickly turned into the largest music festival in Western Canada, attracting 120,000 attendees for last summer’s four-day run. It created $30 million in economic and tourism spinoffs for the Sea to Sky Corridor, including $10 million for Squamish’s local economy.
Over the last few years, the festival has attracted names such as Arcade Fire, Bruno Mars, Eminem, Drake, Mumford & Sons, and Sam Smith. Organizers had a long-term aim to turn the annual event into a premiere international music festival.