In what was called a “make or break” year for North Bay’s Summer in the Park Festival, the annual event posted a significant financial shortfall for the third year running.
City Council received a report on Monday night that told the story of the 2015 edition of the festival exceeding their $361,493 of revenue with $471,062 of total expenses for a deficit of of $109,569, in large part due to the weather impediments and loss of sales at the Beer Garden.
The city’s Summer in the Park Festival reserve fund will now show a negative balance of $155,978 after the event resulted in a $96,040 deficit in 2014, which they offset to $45,923 by using what remained in the reserve fund.
But while the numbers don’t look all that encouraging, Festival chairman John Strang took to the podium in Council Chambers on Monday night to argue that the true impact of the event cannot be measured solely by its bottom line and to field questions from council members.
And after an hour-long discussion, those around the council table seemed overwhelmingly encouraged by what they were told.
As the chairman explained, all of the committee’s projected expenses came in under budget and, instead, the event faced drastic loss in revenue from sponsorship, low wristband sales and the pernicious impact of bad weather.
On the upside though, the overall economic impact from the festival weekend is estimated to be $6.7 million, which Strang was quick to call attention to.
“I can tell you, if I was making an investment of $155,000 to see $6.7 million this year alone in economic spin off, I would think that’s a pretty good return on my investment,” Strang said sternly.
“Yes there’s a risk to the taxpayers […] but I think it’s more of a risk not running [the festival] because we have an economic climate right now where we are seeing local business close, and it’s festivals and events like this that keep our city vibrant, keep people invested in it and keep people coming,” he added after the meeting.
Despite the deficit, the report states downtown businesses experienced a 25 per cent increase in business over the course of the weekend, while the Discovery North Bay Museum had their largest grossing weekend of the year.
Hotels in the area were also apparently happy with their 96 and 97 per cent occupancy rate on the Friday and Saturday night, respectively, the majority of them reporting a large number of out of town guests who were in town just for the festival.
But while wristband sales increased to 5,694 this year, up more than 40 per cent from the 2014 edition, the advanced early bird pricing of $25 and the lack of on-site sales generated just $159,657 of revenue.
Headlined by country singer Johnny Reid and Canadian icon Burton Cummings, the two-night festival garnered an estimated 42,200 people, up 10 per cent over last year’s numbers.
“Certainly the wristband sales fell short in the weeks before and at the gate that night, and that’s the risk you take with outdoor concerts and that’s the challenge we have going forward: how do you minimize that risk?” said Coun. Derek Shogren. “I think it’s too early to give up on the event - a community our size should be able to pull off one large event each year.”
After having to cancel headlining acts Meat Loaf and Metric in 2012 and 2013, the committee decided to purchase cancellation insurance for the 2015 concerts.
But when faced with the decision to take the insurance payout and cancel the Friday night shows because of thunderstorms, the committee made the collective decision to pull the two opening acts in favour of getting headliner Johnny Reid some stage time before the bad weather set back in.
While the report states the public was happy with that decision, the committee gave up an insurance payout that would have significantly reduced the deficit.
“We had purchased weather insurance, but it was agreed upon to protect the integrity of the event and move forward,” Strang explained. “We had 4,000 people lined up that sat through three thunderstorms; we could have easily cancelled the event that night and put this in a positive position, but to protect the integrity of the event, we chose not to.
“If you’re solely focused on the bottom line, then we should’ve cancelled Friday night plain and simple,” he added, “but that doesn’t help this thing grow. It’s about nurturing it and it’s about supporting it.”
The severe weather and rain delays resulted in very low sales at the Beer Garden too, which only brought in $26,809 in total revenue, $7,472 of which the committee retained after partner payouts and deductions.
On top of that, the loss of the Million Dollar Hole-in-One resulted in a loss of between $5,000-$6,000, while the committee was also denied funding by the Ministry of Culture Tourism and Sport and Celebrate Ontario, who previously granted the festival $60,000 for the beach volleyball attraction in 2014 plus some extra for marketing the event.
Elsewhere in the expense column, the musical entertainment cost the committee $278,010.
Before 2013, the event recovered all costs in consecutive years through sponsorships, grants, reserve funds, insurance payouts, and the city’s contribution.
But the past three years have resulted in deficits and dips into the reserve fund to offset the damage, on top the $40,000 annual contribution from the city.
In hopes of paying the city $15,000 each year for the next three years, Strang pegged their initial sales goal at 10,000 wristbands and put the pressure on the public to rally behind the event and challenged them to step up with wristband sales, even if they weren’t fans of the particular bands and genres they booked.
To combat the new deficit, the report says the committee will use future surpluses to pay it down.
Coun. Chris Mayne, in particular, said he felt the original goal was “very aggressive” and said he expects the committee to come back with more realistic goals in the future.
“I think 8,000-10,000 projections have been optimistic and if we do reach those in some years, that’s terrific; but what I’ll be looking for in the budget […] is more realistic budget targets,” said Mayne. “My concern is the ongoing losses; whatever the surpluses were in previous years, we’ve now used those up and we’re sitting at a $155,000 deficit, which the City of North Bay is carrying.”
However, Strang remained adamant that while 10,000 wristbands might be a little bit out of reach based on recent years, he still considers it an attainable goal if they can grow the festival the way they anticipate.
Coun. Mike Anthony, too, questioned the direction the festival is taking, asking Strang whether or not they are experiencing déjà vu from the former Heritage Festival fall out.
Elsewhere around the table, George Maroosis said he feels the saturation in the summer festival scene has resulted in a province-wide downward trend in ticket sales and overall revenue, but remains optimistic in the work the committee is doing.
The committee has already been informally discussing changes for next year’s event and will sit down next week for their first official “restructuring” meeting. Strang said he expects the group to be back before council with some of their 2016 recommendations in no later than four weeks’ time.
Some of the tentative ideas Strang spoke about were a possible date change, a change in wristband prices, and different entertainment offerings.
“We’re going to relook at the entire makeup of the event,” said Strang. “We’re always looking at the cost of wristbands and the type of entertainment, but we’re limited by the time of entertainment we can have based on the dollars we have to spend.
“We’re going to look at weather patterns, a five or seven-year rolling average of past festivals, and come up with those numbers,” he concluded. “Everything is on the table, but I don’t know if we’re looking at drastic changes or not.”
