BDKV President Jens Michow: Keeping The Industry’s Best Interests At Heart

Prof. Jens Michow: I’m simply wishing that Corona finally goes to hell. I’ve been directing the trade association of German concert, tour and event promoters and artist agencies for 37 years now. I have never experienced such a challenging and thus work-intensive time as the last two years. 

I witnessed how the hopelessness of people working at event companies and how their expectations for this association’s commitment constantly increased. So, at the beginning of this year, my only wish was that the restart everybody has been longing for would finally be possible. Unfortunately, we have still not arrived there at the end of February 2022. 

And we, of course, know that the events industry in particular will continue to suffer from the consequences of these two years for a long time to come. 

Germany always tries to give 200 percent. This is also the case in the fight against corona. According to our health politicians, we’ve been more successful in that fight than, say, Scandinavia or Great Britain, for example. Up to a certain extent that may even be true. But these countries have realized in time, that permanent lockdowns neither serve to protect everybody nor to get rid of the virus. Germany realized far too late, that the height of the Corona incidence should not be the decisive indicator for lockdowns. So, sometimes you get the impression that there’ll be no real Freedom Day in Germany until Corona has completely disappeared into thin air. But that means heading for a dream.

I don’t want to be misunderstood, I do believe that Germany has certainly done some things wrong in the fight against the pandemic, but it also got a lot of things right. But since Corona will always be with us in the future, and since we’re seeing that even three vaccinations don’t provide immunity to new virus variants, more and more people are naturally questioning, what we are still waiting for at this point in time.

On February 16, Germany decided to gradually lift restrictions on events. On March 20, all “wide-ranging” measures are to be lifted. However, this raises the question of what is meant by this. Does it mean that after March 20 there will be no more capacity restrictions for events? Are capacity-restrictions considered “wide-ranging” by the decision makers? The resolution doesn’t make this clear, so, unfortunately, it still does not provide the planning security our industry has hoped for. We therefore emphatically demand that we finally be given some without any ifs and buts.

I can’t answer that, and it makes me angry. As early as last January, the BDKV, together with the associations representing the b2b events sector, presented the government with the “Matrix Restart,” which we had developed together. It showed that and how we can realize events in a safe manner and depending on the incidence figures given in each case. 

Corresponding concepts, prepared by experts in collaboration with virologists, were also available from numerous other sectors of the economy. There have been various studies, for example, that have shown that the risk of infection from events in music clubs is no greater than the risk from being in a department store or on public transport. Unfortunately, this did not convince our federal minister of health. 

We showed that we could be part of the solution by offering people the opportunity to party inside safe bubbles, instead of gathering in parks without any protection. Our proposals were not taken up. In fact, I have the impression that they were not even read. The government’s stated goal was to achieve an 80% vaccination rate. When it became clear that this would require an additional booster, new goals were set. Neither goal has been achieved to date. 

Well, our economy in general is already doing quite well again. But the event industry remains dependent on government aid because it has had no chance at all to recover. Compared to all the other economies, we have been hit the hardest by the economic impact of the pandemic. We were the first in, and we will be the last out. Businesses are still suffering from a lack of perspective and have no planning security for the future. When you want to work, but can’t, it makes you sick. Many organizers are postponing concerts that were originally planned for 2019 for the fifth time.

There is no doubt that the aid provided by our state is very considerable compared to all other European countries. Our politicians have undoubtedly done a great deal to preserve the cultural sector. Without this aid, no company would have been able to survive for two years without revenues. But most of this aid was granted only to cover the companies’ fixed costs. The subsidy law does not provide for the replacement of lost profits or the payment of an entrepreneur’s salary.

Companies that have hardly any fixed costs, such as smaller event companies and especially artist agencies, therefore largely went away empty-handed. With fixed cost reimbursements you might be able to keep your business afloat, but not feed your family or repay private loans. 

Still, the fact that we’ve now been given €2.5 billion to cover event cancellations is really great. And there have also been various other aid programs, especially for the cultural sector, for which we are very grateful.

Yes, it certainly does! The solo self-employed in particular – and that includes artists, of course – have benefited far too little from the assistance programs. They were repeatedly told that the state could not replace lost profits. They received a one-time payment at the beginning of the pandemic: emergency aid of up to €15,000. But no one can keep their head above water for a whole year without income. 

Since January 2021, so-called “restart assistance” has been in place. Solo self-employed can receive a maximum subsidy of €16,500, provided their sales declined by at least 60% compared to 2019. If the drop in sales is less, the subsidy is scaled down. The maximum amount is 50% of the referenced turnover. For many individuals, of course, this isn’t enough to meet their living and financial obligations, so they must rely on basic welfare like unemployment benefits to make up for it. 

People who were never dependent on that kind of assistance before the pandemic found this very humiliating. And indeed, for many, the application process for government assistance cannot be managed without the support of counsellors. The costs of hiring them are replaced [by the government] to a certain extent.

As far back as last year, when concerts were allowed to take place here and there with considerable capacity restrictions, where 600 or 700 people were allowed to gather inside halls with a capacity of 2,000 people, even the most-hyped shows weren’t always sold out. Pre-sales for concerts in the fall of this year or even spring of next year are going very slow. There are certainly several reasons for this. On the one hand, people want to wait and see whether they can rely on concert announcements at all. Some people are still afraid of becoming infected. Others may have changed their leisure behavior during the pandemic. The industry is therefore expecting to suffer from the economic effects of the pandemic probably until the end of 2023.

Thus, our dependence on government aid will not end with the complete opening of venues. What is more, due to the many backup dates for canceled concerts, it is almost impossible to find venues at all for concert rescheduling. So, I make it clear to politicians every day that promoters cannot simply ramp up to 100% again after a Freedom Day. Live events have long lead times. Some promoters, who’ve canceled everything in recent months, won’t have revenue again until the middle of next year.

There is no doubt about that. Since March 2020 I’m more or less working eight hours on seven days a week. I even canceled my vacation last year. One solved problem is immediately followed by the next – unless there are three problems to solve at once anyway.

It is precisely because I have been working as a lawyer for so long – and still do so today and very intensively during the pandemic – my law firm has always advised against such proceedings. Michow & Ulbricht are among those lawyers, who do not accept every lawsuit just for the money. I don’t know of a single lawsuit against the states or our government that has really been successful so far. As long as containment measures can be justified by an epidemic emergency, that will remain the case. That could change now, however, if normality is allowed to return to large parts of the economy, while other parts, like concert promoters, continue to face restrictions.

Yes, the alliances of business associations forged during the crisis are some of the few positive side effects of the pandemic. For the trade associations representing the various economic sectors, such as the music industry, the large area of the culture and creative industries, as well as the event industry, the coming together of these respective branches was probably not just the most important instrument for lobbying influence during the crisis but will also continue to exist after the pandemic. Associations that didn’t even know each other before formed alliances. The associations of the Forum Veranstaltungswirtschaft, for example, are holding joint talks with politicians, appearing together in the media and jointly making their demands. The same development took place among the associations of the music industry with the Forum Musikwirtschaft, and the large number of associations of the cultural and creative industries that founded the coalition k3d (Koalition Kultur- und Kreativwirtschaft Deutschland).

As far as the events industry is concerned, it is, of course, easier to push through demands of associations that represent 3,500 companies than it is for BDKV on its own, representing some 500 companies with a turnover of €6 billion. Up until now, politicians have been associating the term event industry with the cultural event industry only. I am flattered by this, because it showed that our work over the past decades has certainly borne fruit.

However, once we made it clear to them that the cultural events industry is just one part of an economic sector that generates combined sales of over €130 billion, and once we showed them that while around 53,000 people are employed in the cultural events industry, the entire events sector employs over one million people, their perception completely changed. The events industry is the sixth largest economic sector in our country. When an industry like this is on the verge of collapse, politicians take it very seriously and think very hard about how to save it.

In the very first place we demand a quick and unrestricted opening for events of all kinds. We furthermore demand that the current aid, almost all of which is set to cease in the middle of this year, be continued for our industry at least until the end of the year. And we’ve made it clear to the politicians that organizers will only invest and plan events for the future again if it is agreed now, how we’ll be helped in the event of renewed restrictions, for example after the summer. 

We’re making it clear to politicians that, going forward, there won’t be any more insurance against pandemic risks available, and that we therefore need a rescue package in case we have to cancel events again, for example in the face of a new variant. This will certainly be one of the biggest challenges worldwide, because no one can take risks in the millions without adequate coverage for future pandemic-related event cancellations. 

Also, the extension of the current short time allowance for workers is very important for our industry. Politicians are increasingly telling us that the economy in general is doing well again at the moment, thus companies that do not need this kind of aid will still benefit from it (a so-called windfall gain). For this reason, the Forum Veranstaltungswirtschaft is calling for a special program for our industry. We believe that this is a perfectly justified demand for a sector of the economy that has been so severely affected by the crisis.

That is certainly not the reason. The catering and hotel industries, like many other sectors of the economy, have never been dependent on state aid in the past. In addition, it is simply nonsense to suggest a lack of lobbying in view of all the successes we as well as the BDKV on its own have had in the past two years in terms of mitigating the economic effects of the pandemic.

Many associations in other countries, and not just the representatives of the events industry, have had to hear time and again that their sector does not have sufficient lobbying influence. I can only speak for organizers of live events. As early as May 2020, just a few months after the outbreak of the pandemic, we succeeded in pushing through the voucher regulation, which allowed organizers to issue vouchers instead of refunding ticket revenues. It enabled them to postpone repayment at least until the beginning of 2022. This was a fundamental change in our civil law and would never have been possible if we had not had sufficient standing with politicians before the crisis. 

In the course of 2020, BDKV succeeded in getting our culture minister  to approve a budget of €80 million to encourage event organizers to hold events again in 2021. Since, as we know, no events were allowed to take place, this money could hardly be used. But it was at least possible to agree on an equal budget for this year. This will allow artists to generate income from events that would not take place without this help. Something like this doesn’t happen by cold-calling, but only because politicians have long since understood the importance of live events for the entire music industry. 

By the way, the funding budget was initially only going to amount to €20 million. I could go on and on, but it should have become clear: more is always possible, but then far more money would have to be invested. If we want to achieve greater awareness not only through politics but also in society going forward, it will be necessary to initiate an image campaign for the industry, as the travel industry has done in our country, for example. We need to communicate our economic but also social importance. This also costs a lot of money, of course. The Live Entertainment Award is a very important tool in that regard, but it others must follow suit.

We are experiencing a dramatic migration of skilled workers to other professions, e.g. lighting and sound technicians, stage builders, tour managers. They often switch to dependent employment, that is, to jobs where they can safely count on their money every month. It will be very difficult to win back these experts. And the industry desperately needs them, because promoters are bad at building stages, and they can’t do the sound mixer’s job either.

 

If events can’t really take place again in a timely manner without restrictions more and more event organizers will ask themselves whether it still makes sense to continue to be patient. Even the considerable state aid won’t help, because people want to work and earn their own money.

First and foremost, I hope that I will finally have time to go to concerts again. If I may be honest: in addition to solving the many problems, I also very much hope that, after a two-year break, it will be possible to finally hold the Live Entertainment Award again, organized by my team and me in Frankfurt’s Festhalle. It is not just me, who’s looking forward to this. I know many organizers, who are hoping that there will be another LEA gala this year, because the award ceremony has long since become the most important industry gathering in our country. 2020 should have been the 15th anniversary of the LEA awards ceremony, and I would love to make good for it now.

We have all experienced how vulnerable our economy is. Unfortunately, we will have to reckon with such pandemics, which have already occurred in past centuries, perhaps repeating themselves at shorter intervals in the coming years. We have to be prepared for this. We will have to discuss the question of what to do about it as quickly as possible. But the fact that everything will not always and forever remain as it was is certainly one of the important lessons from this crisis for all of us.

I haven’t had time to think about it yet. However, I am sure that I will not miss this particular period. All joking aside: the coming together of the many associations, and thus the emergence of new friendships. At times it fel like I spent more time with colleagues than with my wife. And then of course: you don’t have to travel around the world every day to meet for one or two hours. Zoom, Skype and Teams save a lot of time and can be just as effective as “analog” meetings. Some of that may be considered my personal takeaways.