Lady Gaga and the business of cancellations
The costs involved in cancelling Lady Gaga’s tour shows us how she has become a lucrative pop act
When you hear that an artist has cancelled a show or a tour, there’s a range of reactions, depending on where you stand. Of course, a lot depends on whether the act or promoter uses our old friend “unforeseen circumstances” as an excuse. It’s a term we sadly haven’t heard in ages, chiefly because people have worked out that is usually means poor ticket sales. But in most cases, fans get a little annoyed about the fact that the gig isn’t happening and then get on with things. This stuff happens. There’s always another gig, another act, another night out.
But, as Billboard outlines in some detail, cancelling a tour is an expensive business, especially when it’s a superstar act like Lady Gaga. Apart from the cancellation of 22 shows and refund of 200,000 tickets, there’s also the stuff behind the scenes which the audience out front never see.
As Billboard put it, “buildings are notified, press releases prepared, and the massive production shuts down” and the insurance claims would begin. “As an industry standard, a major tour such as this would be covered by various levels of insurance, including such things as the significant out-of-pocket expenses to shut the tour down, advertising costs, and lost revenues for both performer and promoter.”
Lady Gaga pulls the plug (Photo: Getty Images)
In most cases, you assume the insurer pays out when the show doesn’t go on. But Irish music fans will recall that promoters MCD had to go to High Court to get insurance companies to pay out when Eminem cancelled his 2005 Slane Castle show. The case was eventually settled and, while no details of the settlement were revealed, MCD were seeking €1.5m from three London-based insurance companies. Obviously, business is business and the promoters were happy to do a deal with the rapper for his show at the same venue this summer.
While Lady Gaga’s cancellations come at the end of a lengthy tour which has already taken in over $168 million, the US dates were going to be the cherry on top. As Billboard notes, “the North American leg…would have likely put the tour at more than $200 million gross, easily in the top 20 tours of all time and probably in the top 15″. That’s a whopping take for an act in this day and age and shows you that theres still money to be made in the pop game. No wonder then, that record label A&R departments are still in action looking for potential Gagas to sign to all-in deals.