A lot of booking agencies are making redundancies in the UK at the moment. It may seem obvious why this is – but I think it bears some analysis.
If you don’t work in a booking agency, you may not realise that an agency only receives income after a concert has taken place. This means that they won’t receive any income until a meaningful level of concerts start up again. It is generally accepted that will be sometime next year. For agency’s like ours, we are planning for a whole year of pretty much zero income. Of course, we are innovating where we can… streaming shows, socially distanced events etc – but compared to regular times, it’s peanuts.
“but for the music industry it’s a time bomb and it’s going off right now!
The biggest cost to an agency is salaries. This means agencies are reliant on the Coronavirus Job Retention Scheme(furlough) which pays out grants equating to 80% of PAYE staff costs. For all industries how employers deal with the end of furlough is problematic – but for the music industry it’s a time bomb and it’s going off right now!
One of the conditions of the furlough scheme is that if you’re on it you can’t do business. It’s easy to understand the government’s logic here – “if you are able to create income, then the government shouldn’t be footing the bill.” Of course from a booking agency’s point of view, this misses the point because the work done NOW creates income far into the future. In fact, there is masses of work to do at the moment, what with booking and rescheduling shows for 2021, nevertheless, agencies are forced to furlough the majority of their staff to cover their salaries.
OK so back to the question – Why are there a lot of redundancies now? The simple explanation is furlough begins to taper in August. This means that from now, companies will have to contribute further to the salaries of their staff. The furlough scheme finally stops at the end of October 2020 – but the industry doesn’t expect to be back to a rhythmic throughput of festivals and tours till the middle of 2021. If savings are vital for an agency’s survival – then the only logical conclusion is to make staff redundant at the beginning of August. Leaving it later won’t change the outcome and will cost more.
However, this is simplistic – it takes years of investment to train an agent and develop their roster to a level where they can start to generate net wealth for their agency. Making staff like this redundant is the very last thing an agency wants to do. The staff represent future income and skills that will be expensive to replace.
None of this considers the wider economic impact on the industry in the near future. As we head into a recession, many people will have less disposable income for concert tickets. Some will have got out of the habit of going to concerts and found other outlets for their money. Some will just delay going back into crowded environments because of fear of viruses. 2021 will not be an easy year. There is no doubt that our industry will contract.
The consequence of this is that it is likely that companies will not be able to support as many staff even when concerts are back to normal. In the meantime, agencies will have to work on innovating and planning to position themselves in such a way that they can re-employ some of the talent they lost in August 2020.