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.
