PAPER C1

 

Purpose:   For Decision

 

Committee:    EXECUTIVE

 

Date:               5 NOVEMBER 2002

 

Title:                THE QUEEN’S GOLDEN JUBILEE CELEBRATIONS - ISLE OF WIGHT MUSIC FESTIVAL

 

REPORT OF THE PORTFOLIO HOLDER FOR TOURISM AND LEISURE

                       

 

 


(A)       SUMMARY/PURPOSE

 

1.         Members are invited to review the inaugural two week Isle of Wight Festival, staged across the Island from 3rd - 16th June 2002 to celebrate the Queen’s Golden Jubilee and to consider the options for the future of the Festival.

 

(B)       BACKGROUND

 

2.         The 2002 Festival

 

2.1       With the exception of Glastonbury, the Isle of Wight has reputedly the strongest musical brand name of any venue in the UK by virtue of the world famous Pop Festivals held from 1968-1970.   On the 13th November 2001 the Executive agreed a proposal from Wight Leisure, which set out an opportunity to capitalise on this status and organise an Islandwide music festival to celebrate the Queen’s Golden Jubilee.  The aims and objectives of the proposed festival are set out at Annex 1 herewith.  The intention was to stage a 2 week festival that would encompass all forms of music at venues around the Island but branded, packaged and promoted as a complete event.  On 13 November 2001, the Executive resolved:

 

            (i)         That the concept of the Isle of Wight Music Festival as set out in the report be supported.

(ii)               That the opportunity cost of arranging the Festival to a maximum amount of £109,000 be underwritten from the reserves of Wight Leisure.

(iii)             That provision be made to provide for the overall financial support for the festival in the sum of £20,550 to form part of next year’s budget considerations.

(iv)              That financial support for succeeding years’ events be provided by allocating any profits made in the current year to them.


 

2.2         A full report covering all aspects of the Isle of Wight Festival, including contributions from partners, external agencies and organisations has been prepared by Wight Leisure.  A copy has been placed in the Members’ Room.

 

2.3         The inaugural two-week Isle of Wight Festival attracted a diverse audience covering almost every taste and age-range.  It was achieved with support and commitment from internal departments, external agencies and organisations, businesses, venue owners and operators, volunteers, the youth sector and not least the musicians and general public attending all of the events, shows and performances staged.  The main outcomes of the 2002 festival are shown in Annex 2.  In summary 156 different events took place at 85 venues and were attended by 50,000 residents, visitors, musicians and supporters.  Over a third of the events were staged free of charge.

 

2.4         Wight Leisure have estimated, using industry guidelines, that the festival generated £2.5m into the local economy and achieved £6m worth of media coverage for the Island.  It has suggested that the breadth of this coverage from local to international, has given the Island its highest profile since the last pop festival.  The media log, prepared by an official agencyopening [what does prepared by an official opening mean?], demonstrates a wide range of media interest and is available for Members to view.

 

2.5         Sadly, the launch event was only able to attract two thirds of the anticipated 15,000 customers.  From discussions with the promoter, it would seem that this is largely due to a combination of the cost of bank holiday travel, the event being a single day only and the overall quality of the bands being out of balance.  Fundamentally however it feels that the first year effect also played a larger part on people’s decision making than it may on the Mainland.


 

2.6                   The 2002 festival through its wide and varied programme did offer many  opportunities to raise standards of individual achievement, encourage learning and promote social inclusion and community regeneration.  It is felt by Wight Leisure that many lessons were learned in 2002 to be able to maximise these opportunities for community development in the future and for the festival to realise its potential to bring economic benefits to the Island. 

 

 

3.            Future Festivals

 

als

 

3.1    In reviewing the 2002 event, Wight Leisure have suggested that the major lesson learnt is that a future festival should have a two-day launch event to enable the  festival to develop and to be self financing and to generate sufficient surplus to cover the cost of the two week community programme.  Professionals within the music industry have recommended that, building on the organisational success of 2002, festival-goers will be more attracted to make the journey to the Island for a weekend event styled on other successful festivals.

 

 

 

3.2    The two-day launch concert should be held over a weekend sufficiently distanced from the Bank Holiday to enable infrastructure to be shipped to the Island outside of premium holiday traffic. Both the main Island ferry operators have confirmed to Wight Leisure it may be possible to introduce a special festival fare to create an affordable package for festival-goers arriving from the mainland.

 

 

 


3.3        An early June date would allow the Isle of Wight to open the festival season and would keep the event free from potential conflict with other major events and have the potential for maximum media exposure as the first major music event to launch the year. Subsequently, top artistes may be easier to secure.

 

 

3.4    The fundamental issue for Members to consider is whether they wish to continue with the festival in its current format, change it substantially (e.g. support only the community aspects) or decline to be involved at all.  In making such a decision, Members may also wish to consider trying to recoup some of the costs of 2002 and in so doing, Members may wish to know that third parties may seek to capitalise on the Council’s investment by staging a “launch type event”, if the Council is not able to proceed in this regardd.

 

.

 

(C)    OUTCOME OF CONSULTATIONS

 

4.      Following the launch event Wight Leisure contacted all of the local residents adjacent to the Seaclose site.  The feedback received suggested that 85% of respondents thought the event to be well managed and that they were not greatly inconvenienced by it.

 

5.      At the de-briefing following the launch event the main agencies involved in its delivery concluded that it had been professionally managed on the day and identified a number of minor organisational improvements that could be made in the future.

 

6.      Of organisers of the individual events within the overall festival (excluding the Youth Music Festival), 60% considered their event very successful or successful and 35% described theirs as average.  For the “Youth Music” events 75% were described as very successful and 25% as successful.

 

 

7.      On 22nd August 2002 the Economic Development, Planning, Tourism and Leisure Services Select Committee debated the 2002 festivals and the issues surrounding its future and especially the involvement of the Council.  It resolved it would support the concept of the music festival and its organisation in future years subject to:-

 

·   The Council not being at any financial risk in its organisation

·   The cost of the event in year 1 be recovered from future arrangements for the festival within a 5 year period.

 

(D)       FINANCIAL IMPLICATIONS

 

8.         The 2002 Festival

 

8.1       The expenditure was £675,762 and the expected final income will be £377,382, subject to the receipt of the final sponsorship payment of £50,000 due at the end of October.The expected net cost of the whole two-week festival is therefore £330,000298,380 as against the £20,550 initial projection, as reported.  A summary financial report is shown in Annex 3.This is subject to the receipt of a final sponsorship payment due at the end of October.

 

8.2       Members are reminded that there is no current budget provision with which to fund this net cost.  The Executive of 13 November 2001 did agree to underwrite the event to a maximum of £109,000 from the reserves of Wight Leisure, therefore the balance will need to be funded from the general reserve.

 

8.3       One of the agreed main aims of the festival was for it to become, “self-financing in the third year”.  The reason for this being that it was felt that financial viability would follow its establishment as a major event on the music festival calendar.  Therefore, giving consideration to the future of the Festival, Members may wish to consider opportunities to recover the costs of year one (2002).

 

9.         Future Festivals

 

9.1       The community element of the music festival will, it is estimated by Wight Leisure, cost £44,000 to organise in 2003, along the same lines as 2002.  It has suggested that up to £25,000 of this cost could be funded as part of the 2003/04 events programme.  This would be as a replacement for events which it is believed, are not being organised in the future.

 

 

 

 

10.       Wight Leisure have suggested that a two day launch event would be more cost-effective than the single day used in 2002.  It has, in consultation with its advisers, estimated that such an event would require annual expenditure of £1.2 million and would generate an income of £1.5 million.  It has also suggested that it would be more easy to attract sponsors for the event if a three year programme could be agreed, rather than it being determined on an annual basis.

 

11.       The options for the Council in relation to the Music Festival are outlined in the Options Appraisal attached to this report.  Based on the figures provided by Wight Leisure, the range of options starts at a cost of £44,000 and ends with a surplus of £300,000.  However, each comes with an associated risk which would need to be considered in their evaluation.

 

(E)       LEGAL IMPLICATIONS

 

12.       Following a meeting of the Executive on 26 February 2002, which determined to waive Contract Standing Orders, the Ccouncil entered into an agreement with Solo Agency Limited. The terms of the agreement include (“clause 15”):

 

            “If at any time during the next four years the Council decides to repeat the Concert (or hold a similar event) the council undertakes and agrees that they will give Solo the first option to renew this agreement. If this agreement is renewed the fees payable will be revised commensurate with the scale of the event proposed, the fees charged for this concert and other relevant matters.”

 

13.       The decisions of the Executive on 13 November 2001 and 26 February 2002 do not refer explicitly to the inclusion of a five year option, although th e13 November resolution does support the concept of a multi year business plan as set out in the report to that meeting of the Executive.  The clause is difficult to interpret, and were a dispute to arise Solo and the council would almost certainly rely on different interpretations. It is anticipated that Solo would seek to enforce the clause if the Ccouncil proposed to offer a commercial partnership to a third party. The outcome of any such litigation would be uncertain, but would be expensive and time consuming to defend. Entry into a commercial partnership with any party other than Solo is therefore not offered as an option.

 

14.       Any option proposing a commercial partnership with a third party other than Solo, of sufficient similarity to the 2002 arrangement to engage clause 15, would be involve a higher rather than a lower degree of risk and would therefore be highly unlikey to be the recommended option. The existence of clause 15 has ruled out one option which would otherwise have been included in the appraisal section of this report – the running of a competitive selection of proposed partners seeking through a tendering exercise.

 

15.       Negotiations should seek agreement that Solo will not seek to enforce any outstanding obligations from clause 15, in consideration of entering into a new agreement, if option 4, 5a or 5b is resolved.

 

16.       Option 5b, as recommended, effectively proposes the sale of valuable assets – the right to use the Seaclose site, other infrastructure, use of the Isle of Wight Festival brand and practical support from council officers – for a 5 year period. Any option to renew will also be a valuable asset in the event that the festival becomes a success over the five year period. This value may be hard to quantify, but will be in excess of £50,000 and, as no competitive process is proposed, Contract Standing Orders will need to be waived.

 

17.       Further advice will be given when as negotiations proceed, but it is likely that an indicative notice in the OJEC will be necessaryadvisable in order to comply with European procurement provisions.

 

18.       The requirements of the Isle of Wight County Council Act 1971, the public entertainments and other licensing regimes will need to be satisfied if a launch event is to be organised. This responsibility will fall on Solo under the recommended option.

 

(F)       OPTIONS

 

19.       A detailed options appraisal is attached at annex 3 4 to this report.  The options are repeated in summary below.

 

1.         Not to organise any further festivals on the same format as in 2002 (Financial Risk:  None).

2.         To organise only the community based elements of the festival (Finacial Risk:  Low).

3.         To leave the organisation of a launch event to a third party whilst organizing the community based elements of the festival as set out in option 2 (Financial Risk:  Low).

Whilst not organizing the community based elements of the the festival as set out in option 1 (Financial Risk: None)

4.         To organise future festivals on the same basis as in 2002 (Financial Risk:  Extremely High).

5.         To organise future festivals in the period 2003-2007, not on the same basis as in 2002, but in partnership with Solo by:-

 

a)                 Sharing income and expenditure equally (Financial Risk:  High), or

 

a)                 The Council providing the event’s Seaclose site, local liaison with the statutory and voluntary bodies and cross-marketing with the Community Festival and receives a ticket  

b)                 alAllocation (for re-sale) for the launch event

                     (Financial Risk:  Low - Medium).

 

Solo have indicated that, due to the considerable investment and risk it would assume under either of these options, it would require a five year contract, with an option to renew.

 

(G)       OPTIONS EVALUATION

 

20.       The fundamental issue for Members to consider in evaluating these options is whether it should be directly involving itself in the delivery of a launch event of the form and type as in 2002.  If this is something which is important to the Council, then the degree of involvement required can range from total control to simply influence.

 

21        It could be said that by organising the 2002 event the Council has fulfilled its enabling community role and that it is for others to build upon the potential that has been created for the event’s development and improvement.   This benefit has been obtained at considerable financial cost to the Council..

 

22.       Looking at the options it is clear that if Members wish to recoup the costs of 2002, then it will be necessary to repeat an event to launch the 2003 festival.  If this is to be done without risk of a dispute with Solo, then the Council must work with its current partner.  It is felt that options 4 and 5a present too great a financial risk to the Council as the Council would bear significant costs if the event were not to perform, financially, significantly better than in 2002.

 

23. In offering the Council option 5b, Solo is taking the full financial risk for the organization and delivery of the launch event.  It will of course gain the direct financial benefits if it is successful but the Island would benefit overall if this were to be the case.  Solo are unable to make the Council a financial offer for the use of the site, facilitating local liaison with the necessary agencies and organizations and joined up marketing with the community events, as its up-front financial commitments are extremely high.  It has therefore offered an allocation of tickets to the Council for the provision of these services, subject to the tickets being re-sold to pre-defined groups such as young people; markets that Solo would not normally expect to sell to.

 

24.       Given the investment and risk which Solo are willing to bear it and wishes to negotiate a five year deal, with an option to extend. The risk associated with a five year deal is twofold. Firstly, there is a risk that the deal with Solo will seem disadvantageous in the event that the festival is extremely successful. This is the consequence of the relatively low risk which option 5b represents. The council  bears limited risk and therefore will not gain significantly if the event is greatly successful. Secondly, the partnership is fixed for a period of time and under performance by Solo, so long as it is not in fundamental breach of the agreement, cannot be rectified by a change of partners.

 

25.       If Solo are able to deliver the launch event and Wight Leisure are able to re-sell 4,000 tickets for it on the Island, then the Council is able to both recover the costs of the 2002 event over the period and deliver the community music festival and recover the costs of the 2002 event, the former taking priority.  Similar ticket allocation deals in future years will ensure further income to the Council.

 

Negotiations with Solo should ensure that:

 

a)     No financial obligation to Solo is created;

b)     Break clauses are included in the contract in order that the council can review it’s continued involvement on an annual basis;

c)      Sufficient safeguards are agreed to ensure that the festival is lawful, safe and in keeping with the ambience of the Island and any community festival run at the same time, and

d)     Specify minimum professional standards to be expected of Solo.

 

 

RECOMMENDATIONS

 

i.           Contract Standing Orders are waived

ii.         Option 5b, subject to contractual agreement being reached with Solo in terms, consistent with this report, approved by the StrategicExecutive Director of Education and Community Development, in consultation with the Portfolio Holder for Tourism and Leisure Services.

iii.       A further report be brought back to the Executive detailing progress and any further necessary decisions in January 2002.Education

 

 

 

BACKGROUND PAPERS

 

Report ‘THE QUEEN’S GOLDEN JUBILEE CELEBRATIONS - ISLE OF WIGHT MUSIC FESTIVAL’  -  Executive - 13 November 2001

Report ‘Isle of Wight Music Festival’ - Economic Development, Planning, Tourism and Leisure Services Select Committee - 22 August 2002

 

Contact point : John Metcalfe, Head of Community Development and Tourism ( 823825

 

 

D PETTITT

Strategic Director

Education and Community Development

M A JARMAN
Portfolio Holder of Tourism and Leisure

 

 

 

         

 

 

 

 

 


ANNEX 1  - MAIN AIMS AND OBJECTIVES OF THE ISLE OF WIGHT FESTIVAL

AIMS

R                 To develop and build the largest music festival in the UK

R                 To put the Isle of Wight on the map as a world class music venue

R                 To promote tourism, economic, leisure and cultural development

R                 To support community regeneration and social inclusion

R                 To ensure the entire festival becomes self-financing in the third year

R                 In the first year to celebrate the Queen’s Golden Jubilee

 

OBJECTIVES

R                 To encompass the widest range of music in as many venues as possible during the two week festival and package, brand and promote as one complete attraction

R                 To bring maximum exposure to the festival via a high profile launch concert with world famous artistes and achieve a minimum of 15,000 ticket sales

R                 To keep the festival in the spotlight with a range of specialist interest themed performances

R                 To stage a Youth Music Festival and Educational programme

R                 To encourage Island-wide participation and use the festival to showcase local talent

R                 To achieve an Island-wide participation in the programme from a maximum number of venues

R                 To attract a minimum of £150,000 sponsorship in year 1 and extend for future years

R                 To raise the profile of the arts and promote better access to a range of high quality arts work through the varied programme

R                 To build a sense of community achievement through active involvement in creating and developing the UK’s largest music festival

R                 To heighten civic pride and enliven community spirits by celebrating the Queen’s Golden Jubilee in year one

R                 To work with external partners to achieve the festival aims

ANNEX 2 - ISLE OF WIGHT MUSIC FESTIVAL 2002 – OUTCOMES

 

_    85 Venues staged performances or workshops

_    156 Events took place

_    58 Events were staged completely free of charge for the enjoyment of the public

_    252 Individual performances

_    10 Community music events

_    50,000 residents, visitors, musicians, supporters and organisers enjoyed attending or performing during the overall Festival

_    Using research figures supplied by Isle of Wight Economic Development Parternship and Southern Tourist Board ‘spend per head’ estimate the event generated a spend of £2.5m into the economy, also supported by information contained within the Creative and Cultural Industries Economic Impact Study for the South East England, published by South East England Cultural Consortium and South East England Development Agency

_    Over £6 million pounds worth of media coverage for the Isle of Wight has been achieved – including local, regional, national and international.  Including specialist music press, travel press and technical press  -  all documented, using an official press logging service

_    Included in above, a 30 minute BBC documentary on recreating the Festival, and portraying the Island in a very positive light has been broadcast once already with plans to show again in the Autumn. 

                                                                    * * *

And for the Youth Music Festival which formed an integral part

_    400 attended the Educational workshops

_    For the first time the Music Industry came to the Isle of Wight to view the talent and not the other way around – Representatives from EMI,  Chrysalis, British Music Group (BMG), Universal and Solo attended the talent showcases and auditions

_    All groups received a free recording session/workshop, a professional photoshoot and featured on the new website - wightnoise.com.

_    14 youth events, including the showcase opportunities, educational workshops and the ‘on the road schools tour’ attracted an audience of approximately 8,678 comprising mostly Island youths in the under 20 age bracket

_    2000 attended the ‘On the Road’ schools tour

_    Musicians, spectators and supporters enjoyed the Youth Music Festival

 

                                                                          * * *

_    For the whole of the festival effective and rewarding partnerships were built and developed with the public, private voluntary and community sectors

 

_    THE FESTIVAL HAS BEEN OFFICIALLY RECOGNISED AS A GOLDEN JUBILEE CELEBRATION BY THE QUEEN’S OFFICE

 

 

 


Anne

Annex 34

 

 

 

OPTIONS APPRAISAL

 

 

Option 1:         Not to organise any further festivals on the same format as in 2002.

 

Impact:

 

Neither the Rock Island event nor the two week community events would take place on the

Island.

 

Financial Implications:

 

The Council would need to fund the net cost of £330,000 for the 2002 festival for which there is no current budget provision, other than funds allocated in Wight Leisure reserves.

 

Risk Level:      

 

None – although the Council would have no opportunity to recover some of the costs of the

2002 event.

 

Contribution to Corporate Objectives:

 

None.

 

Option 2:         To organise only the community based elements of the festival

 

Impact:

 

The community would still be able to engage in a two week festival organised and run by it

through Wight Leisure.  Its overall impact may well be reduced by not having a high profile

launch event on which to base a marketing and promotional programme.

 

Financial Implications:

 

The Council would need to fund the net cost of £330,000 for the 2002 festival for which there is no current budget provision, other than funds allocated in Wight Leisure reserves.

 

The annual cost of staging the community festival is estimated at £44,000 for which there is no budget provision.  Although £25,000 could be allocated from the 2003/04 events programme.

 

 

 

 

Risk Level:      

 

Low – the Council would have no opportunity to recover some of the costs of 2002 but would

have an agreed budget with which to deliver the 2003 community event against and within.

 

Contribution to Corporate Objectives:

 

Raising education standards and promoting lifelong learning.

 

Option 3:         To leave organisation of a launch event to a third party

 

a)whilst organizing the community based elements of the festival as set out in option 2 (Financial Risk:  Low).

b) Whilst not organizing the community based elements of the the festival as set out in option 1 (Financial Risk: None

Impact:

 

A high profile rock event may or may not take place and may therefore not create th e sought after synergy with any community festival.

 

Financial Implications:

 

The Council would need to fund the net cost of £330,000 for the 2002 festival for which there is

no current budget provision, other than funds allocated in Wight Leisure reserves.

 

The third party would be expected to meet any costs to the Council in its use of a Council owned venue.

 

Risk Level:      

 

Low, the Council will have little influence over the style or form of the event and how it is

marketing and the image of the Island that it will portray.  Some control could be exhibited

through conditions of use for the event venue.

 

Contribution to Corporate Objectives:

 

Encouraging job creation and economic prosperity.

 

 

Option 4 :        To organise future festivals on the same basis as in 2002

 

Impact:

 

This would deliver a high profile launch event over 2 days to achieve similar levels of publicity

and promotion for the Island as in 2002.  An increased range or number of community based

events could be delivered on the back of the launch event.

 

 

 

 

Financial Implications:  

 

A festival with a two day launch event would require an estimated expenditure of £1.2 M and it is estimated by Wight Leisure that it would generate £1.5 M income.

 

The Council would need to carry the risk of the income projections not being realised.

 

Risk Level:      

 

Extremely high – the Council may however recover the costs of 2002 but will be carrying the

risk of incurring further losses.

 

Contribution to Corporate Objectives:

 

Raising education standards and promoting lifelong learning. 

 

Encouraging job creation and economic prosperity.

 

 

Option 5:         To organise future festivals in the period 2003-2008, not on the same basis as 2002 but in partnership with Solo Agency Ltd (Solo)

 

 Option 5a:      The Council and Solo share income and expenditure equally.

 

Impact:

 

This would deliver a high profile launch event over 2 days to achieve similar levels of publicity

and promotion for the Island as in 2002.  An increased range or number of community based

events could be delivered on the back of the launch event.

 

Avoids the need to resolve any potential conflict with Solo

 

Requires the waiver of Contract Standing Orders.

 

Financial Implications:

 

A festival with a two day launch event would require an estimated expenditure of £1.2 M and it is estimated by Wight Leisure that it would generate £1.5 M income.

 

The maximum Council cost for the event would be £600,000.

 

If the estimated net profit is achieved, then the net cost of 2002 would be recovered within 2 years.

 

 

 

 

Risk Level:                  

 

High – the Council will be sharing the risk of further costs but may recover sufficient income in

the longer term to recover the 2002 costs.

 

Contribution to Corporate Objectives:

 

Raising education standards and promoting lifelong learning. 

 

Encouraging job creation and economic prosperity.

 

Option 5b:       The Council provides the Seaclose site, local liaison with statutory and voluntary bodies and cross marketing with the Community Festival  through Wight Leisure and receives a ticket allocation (for sale) for the launch event.

 

Impact:

 

The Council would be able to use its ticket allocation to make the launch event more accessible to

the Island’s excluded groups by offering discounts below normal retail price.  Therefore, more

people on the Island will be able to engage with the event.

 

Financial Implications:  

 

The Council would receive an annual allocation of 4,000 tickets (50% to be 2 day, the remainder 1 day), for the launch event that would generate, it is estimated by Wight Leisure, £100,000 from re-sale to the public on the Island.  The tickets would be allocated for youth (25%) and social inclusion (25%) initiatives and the balance would be sold as “earlybird” offers only available on the Island and well in advance of the release of tickets for general sale to the public.

 

The two week community festival could be based on 2002 and would cost  £44,000 to organise, funded from the ticket sales.

 

The balance of the money from the ticket sales could be used to offset the net cost of the 2002 event.

 

Solo would require a 5 year contract with an option to renew.

 

At such times as Solo achieves its financial projections it will grant the Council an additional 500 tickets for the following year (subject to capacity).

 

Risk Level:       

 

Low - Medium The budget for the community event is solely reliant on ticket sales for the launch event.

 

There is no guarantee that the launch event will go ahead.  The final decision                          remains with a third party.

 

Contribution to Corporate Objectives:

 

Raising education standards and promoting lifelong learning.

 

Encouraging job creation and economic prosperity.