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Volatility Undercuts Predictability and Adds to Event Costs

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When it happens once, it’s a unique event. Twice, and it could be coincidence. Beyond that suggests a trend. And that’s what happened in the month of August to entertainment event stages.

The most significant augur of this unfortunate drift took place Aug. 13, when the stage at the Indiana State Fair catastrophically collapsed just before country-rock act Sugarland was to take the stage, killing seven people and injuring over 40 as a result of sudden wind gusts ahead of approaching thunderstorms.

Five days later, on Aug. 18, Belgium’s Pukkelpop festival saw two of its stages collapse as a result of a sudden storm, killing four and injuring over 40.

Also this summer, an 80 mph wind gust toppled a video screen during a Flaming Lips concert in Tulsa, and a stage roof blew down during a Cheap Trick performance at a festival in Ottawa, Canada when winds there also exceeded 80 mph, injuring the band’s driver.

Rain or Shine

What these disasters have in common is that they were weather-induced, and that poses a larger and harder-to-ponder question going forward for outdoor entertainment events. The U.S. is still in a year that has witnessed significant meteorological disruption. There was an estimated $35 billion in weather-related damage this year in the U.S., including nine events that ran up a total of over $1 billion each, such as the tornado that hit Joplin, MO, and that’s before Hurricane Irene’s tally is in. (Early estimates have it topping $10 billion). These kinds of cumulative cost increases will eventually work their way into the algorithms used by insurance companies that underwrite the policies for event producers and the contractors they hire for lights, sound, projection and other services.

Coming at a time when ticket sales for concert events are under downward pressure in general, these catastrophes add serious economic weight to the industry. The first lawsuits have been filed in the Indiana disaster, against the state fair, Mid-America Sound, Live Nation and other entities.

According to trade publication Business Insurance, the Indiana fair’s exposure to any claims could be limited by Indiana law capping claims against public entities to $700,000 per individual and $5 million per occurrence, and the fair is self-insured under that same Indiana code. That could put the weight of whatever financial liabilities that emerge from the litigation most heavily on the systems providers. By late August, Indiana attorney Kenneth J. Allen filed a $50 million claim against Mid-America Sound on behalf of Alina BigJohny, one of the victims who died. He told Indiana’s WIBC that, by taking the “wrongful death” legal approach, the claim amount would not be constrained by the state’s cap on monetary damages.

Show Cancellations

Weather also may have played some part in the outcome of a decreased schedule of outdoor music events in the U.K. this season. According to the Association of Independent Festivals there, so far this year 31 events have been cancelled as of August — just three short of the total number cancelled in all of 2010. The warmest British spring in 100 years was followed one of the coldest U.K. summers in 300 years; June in London has been colder than March. Meteorological predictability plays a huge role in festival planning, and the weather is growing increasingly unpredictable.

Weather was also the reason that country music superstar Kenny Chesney rescheduled his show at Gillette Stadium in Foxboro, MA from Sunday, Aug. 28 to the preceding Friday (Aug. 26) to avoid a collision with the approach of Hurricane Irene. That meant moving the Friday show at Woods Amphitheater at Fontanel in Nashville to the following Sunday. “Kenny has 26 trucks — that’s a lot of logistics that have to be changed on very short notice,” observes David Haskell, president of Morris Light and Sound, which provides production services for Chesney’s tour.

Factoring In the Risks

“It’s quite possible that recent weather patterns will have a factor upon future underwriting,” says Scott Carroll of Take1, the event division of insurer U.S. Risk. Exacerbating that risk is the fact that these events have taken place in a compressed amount of time, which, in turn, is compounded by the fact that outdoor shows are on the increase.

Carroll says that weather is always considered as part of the underwriting process, but adds that outdoor shows are becoming more frequent and more complex events. “Staging systems are far more elaborate, with backdrops and sidewalls, specialized lighting systems, [and] speaker systems that actually bring the look and feel of the indoor event outside,” he says. “Roof trussing systems have improved over the years to accommodate that, but it has added underwriting and a risk complexity when the incredible effects and stresses that nature can cause [are also added].”

Paul Bassman, president of Doodson Insurance Brokerage of Texas LLC, in Dallas, whose entertainment industry clients include C3 Presents and Stageco, also expects that weather will become more of a factor in underwriting. “I think we’ll also find promoters becoming more proactive regarding requirements that their vendors carry higher [liability] limits contractually,” he adds. “The days of promoters and [lighting and staging] vendors going 25 years on a handshake are going by the wayside.”

PLASA issued statements emphasizing the organization’s portable stage-related standards, specifically ANSI E1.21 – 2006, Temporary Ground-Supported Overhead Structures Used To Cover Stage Areas and Support Equipment in the Production of Outdoor Entertainment Events, which also contains requirements for a management plan for dealing with violent weather. The organization’s statement went on to say, “While we don’t know how widely ANSI E1.21 is being used inside our industry, it was written specifically to avoid portable stage roof collapses, and probably there would be fewer accidents if more people in our industry knew about the standard and diligently followed it.”

Stronger Structures

One change that may come out of this year’s events could be the use of more permanent and ostensibly stronger stage structures. The Indiana State Fair Commission and Gov. Mitch Daniels each have hired experts to investigate the disaster and make recommendations about how to make the concerts safer. The Indianapolis Star looked at several state fairgrounds around the U.S. and found a mix of temporary and permanent stages, plus some creative engineering to make them stand up to bad weather yet remain versatile. The Iowa State Fair, for example, uses a permanent stage with steel beams and girders; it sits on railroad tracks. When the fair organizers want to clear the area for another outdoor event, they push the stage down the tracks. At the Ohio State Fair in Columbus, all major concerts are conducted in a permanent indoor concert facility. Others, including the Minnesota State Fair, the Wisconsin State Fair and the Kentucky State Fair, put up temporary structures each year that are torn down at the end of the season, although some also have permanent features built into their sites, such as the large concrete slab that the stage, scaffolding and trusses that were used for the main stage at the Indiana State Fair.

Earlier Warnings

In Indiana, fair officials were about to warn concertgoers of the approaching storm from the stage when the unexpected leading edge of the weather systems hit. More efficient integration of National Weather Service warnings with life safety systems would help enormously. That, and other efficiencies, including better crowd egress routing and more available shelter, could also factor into insurance calculations and hopefully keep those costs under control. Bigger buffer areas between front of stage and the front rows of audience could also lessen the severity of any disaster, but anything that increases the distance between the artists and the most ardent fans who make up most of those front rows can also discourage ticket sales. Finding balance in this business has never been easy. It’s just a lot more difficult when the weather won’t cooperate.