FKP Scorpio CEO Folkert Koopmans has laid bare the post-pandemic financial struggles faced by festivals, estimating that only 20% are still profitable.
The company’s flagship Hurricane festival returns to the Eichenring motorcycle speedway in Scheessel, Germany for its landmark 25th edition from 16-18 June with acts such as Muse, Die Ärzte, Placebo, Queens of the Stone Age, The 1975 and Loyle Carner.
But in an interview with Kreiszeitung, Koopmans says the event lost money in 2022 despite selling out – and warns the sector is being “overwhelmed by spiralling costs.
“The fact that we didn’t make any money with a sold-out Hurricane in 2022, but actually lost it, was of course also due to the fact that we had basically sold the tickets three years earlier,” he points out. “But since all festivals are now being overwhelmed by the costs, I believe that in the end only 20% of them will still be making money. This problem was already indicated in 2016/17, but after corona it got particularly bad.
“Of course, like our other festivals, we don’t want to give up the Hurricane, because ultimately they are important, they’re part of the portfolio and, in addition, they’re building up a lot of bands. But as I said, it’s a problem, and we’re monitoring further developments very closely in view of the growing demands everywhere.
“We’re struggling with it, trying to keep the costs under control. But it’s incredibly difficult. Of course, we also have an extremely high break-even point. And my company now earns money primarily from the big concerts, for example from the Rolling Stones or Ed Sheeran.”
“On average, we have a cost increase of 30% across the board – this also applies to groceries, leases and stages”
He adds that the days of top acts being able to generate more income from festivals than their own headline shows are over.
“It was just very interesting for a band to play at festivals,” he says. “That was the business where you made money. For example, the band played their own shows for €10,000, but then got €50,000 at the festival. Today it’s the other way around – we have to fight at the festivals while they make more money at their own shows.”
And while organisers have raised average ticket price to €249 for this year’s event, Koopmans says that was cancelled out by other factors.
“The price should have been much higher – and not just because of the more expensive bands,” he says. “On average, we have a cost increase of 30% across the board – this also applies to groceries, leases and stages.”
Koopmans says there is no chance of the 78,000-cap festival growing further, and was more likely to become smaller due to the diversification of the festival landscape.
“But of course I also have the cost pressure,” he adds. “Let’s assume that I would limit the festival to 70,000 visitors and thus sell 8,000 fewer tickets – then I would have the problem that I would lose 8,000 times the income. So it’s not that simple. So we’ll have to see where this all goes, whether, for example, more people are willing to spend even more money for more luxury and comfort. That might be the way.”
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