The future of summer fests

Despite the optimistic talk, some festivals already are being shuffled and cut back. Of the seven lakefront festivals, four of the lesser-attended—Viva! Chicago, the Chicago Country Music Festival, Celtic Fest Chicago and the Chicago Gospel Music Festival—will have their programming cut back and be rolled into Taste of Chicago, which now will be run by the Park District instead of Special Events. That represents a loss of eight days of combined programming, and the Taste portions of these fests will lean on local talent rather than costly headliners.

The newly combined Department of Cultural Affairs and Special Events will produce the blues and jazz festivals. Lineups of musicians for those signature summer events have not yet been announced, but the city also will likely book lesser-known acts to save money.

City budget documents show the extent of the festivals’ financial struggles. Last year Taste of Chicago and the music festivals—Blues, Gospel, Celtic, Country, Jazz and Viva—brought in $15.7 million in revenue, down 25 percent from 2008. Most of the total, 84 percent, came from Taste, which for more than 20 years had been highly profitable. Last year, Taste barely broke even. It turned a profit of $2.5 million in 2008, a healthy 15 percent margin. But in 2010 the profit margin had dropped to 1 percent, or just $170,751. Revenues of $13.2 million were down 24 percent from 2008 levels.

The city has sought to cut expenses, but revenues have dropped twice as fast as costs, which have been trimmed only 12 percent since 2008. With its hours shortened last year and the July 3 fireworks moved away from Grant Park, the Taste literally has shrunk before the eyes of visitors who seem to have grown disenchanted with bite-size portions at bucket-size prices: Ticket sales were down nearly 25 percent since 2008. Revenue from the other festivals has fallen even more sharply. The six music festivals saw revenues decline a third from 2008 to 2010.

While the city blames the economy for the sharp drops in revenue, summer events with powerhouse programming continue to grow. The three-day Lollapalooza music festival sold 80,000 tickets per day last summer—about a 6 percent increase from past years. The privately run bash pays 10.25 percent of gross revenues, and a cut of sponsorship money, to a nonprofit group associated with the Chicago Park District. The promoter, C3 Presents, guarantees a payment to Chicago’s Parkways Foundation of at least $1 million a year. So it’s clear Chicago can host a successful summer festival even during a downturn.

Given the overall financial picture for the city-run festivals, it is not surprising the city wants to consolidate the Taste with other attractions. But Mayor Daley’s abrupt decision to combine the Cultural Affairs and Special Events departments has contributed to the confusion and concern about what will come next.