Wednesday, February 22, 2017
   
Text Size

Ottawa Jazz Festival balances books in 2016 by cutting musician budget by one-third

The Ottawa Jazz Festival made a sliver of a surplus in 2016 after cutting its payments to musicians by more than a third, while staff and contract costs remained stable.

graphics: Brett DelmageAt the festival's annual general meeting on November 28, festival treasurer Lee Tessmer reported that “after two challenging years, we're back in the black”. The festival had a net income of $3,449 this year, after losses of $123K in 2015 and $141K in 2014.

But the tiny surplus did not come from greater ticket sales, which were down by almost 10% in 2016 from the previous year. (The weather during this year’s festival was primarily warm and sunny, with rain on only two days with ticketed concerts.) Similarly, grants were down 29% and corporate sponsorship down 24%, and advertising revenue was zero.

Instead, the festival cut costs – and particularly for musicians' fees. In 2016, it spent $954,671 on programming, compared to $1,459,246 in 2015 and $1,496,535 in 2014. This was despite 2016 being the festival's 35th anniversary.

The festival spent marginally more on non-musician wages and contract services, from $493K in 2015 to $497K in 2016. In 2015, according to the most recent Canadian Revenue Agency filings, the festival had three employees earning from $40,000 to $79,999, and one employee earning from $80,000 to $119,999.

Tessmer said that festival executive director Catherine O'Grady and her team had been “very diligent in keeping programming costs down” in 2016. In the last few years, the festival had been badly battered by the drop in the Canadian dollar. With many musicians being paid in US dollars, the exchange rate was a substantial cost, and was blamed for the deficits in 2014 and 2015. O'Grady said it “still hurt us” in 2016, and “I'm not sure that's going to get any better.”

“We'll just have to continue to monitor that and work consistently with the board and with the artists who are coming our way – who are certainly of the master category but maybe who are a little more affordable,” she said. In her written report, she noted that the 2016 festival presented “more Canadian artists than ever in the history of the Festival, and we're very proud of that”.

In his report, outgoing festival president Gavin McLintock praised the "masterful management" of O'Grady and her staff in making a "small surplus". But that surplus was due to an accounting accident.

One unusual expense line item was a credit for Souvenirs (T-shirt sales) of -$1910. In previous years, this had been a cost ranging from $5K to $10K. O'Grady explained that, in 2015, a supplier ended up being paid twice in error because of a reported lost cheque. While the overpayment was reimbursed, it wasn't in time for the 2015 statements, meaning that the 2016 results got an unexpected infusion of cash and the 2015 results were slightly worse than they would have otherwise been.

This was completely correct according to accepted accounting principles. However, if it had not happened, the 2016 expenses would have totaled at least $5K more – wiping out the 2016 surplus.

In response to a question from the audience about the zero advertising revenue, O'Grady said that the festival had previously sold advertising time on the large LED screen in the park, but this year gave it to those who donated services (which were up by almost 10% this year) as a “recognition” of their donations. Also, because the festival did not print a program booklet in 2015, it was out of contact with some previous advertisers, she said. She said the festival would be printing a program booklet in 2017 and is currently contacting advertisers.

O'Grady presented a slide-show of festival statistics:

  • 875 musicians performed over the 12 days of the festival in 116 concerts on 9 stages.
  • the festival attracted more than 254K festival-goers, counted per concert (down from 274,000 in 2015, and 305,500 in 2014).
  • attendees were evenly divided between men and women
  • 35% were aged 35-54 and 31% 55-64. 18% were aged 18-34 which O'Grady noted was up from only 5% five years ago.
  • 22% were tourists, which O'Grady noted had increased due to the low dollar, and 78% local

The AGM was uneventful, with the most controversy coming from members' insistence that the board follow proper procedure in holding a request for proposals for an auditor for 2016-17, and ensuring that was done by March 1, 2017 – which was agreed.

Only 15 members: either volunteers or those who have paid a membership fee, plus 7 of the 11 board members and O'Grady, were present out of 640 voting members. That was less than one-half of the 34 members attended the meeting in 2015. Five board members were elected for two-year terms by acclamation. McLintock started a new term, and Jean Vanderzon and John Freamo rejoined the board.

Two new members joined the board: technology CEO Doug Somers, and entrepreneur Dan Gamble. Gamble is best known to jazz fans as the owner of The Turning Point, a local music store “with the largest Jazz CD selection in the City”.

    – Alayne McGregor

Full disclosure: Alayne McGregor is a 26-year volunteer with the Ottawa Jazz Festival.

Read related stories