C
R
EDITS
TE
EKA
YLONDON — When Imogen
Heap announced that
she was canceling a leg of her fall
European tour due to the “extreme
uncertainties of traveling throughout
the [European Union], so soon after
Brexit,” it brought attention to one
of the most pressing issues facing
the live-music business.
The English singer-songwriter
wasn’t the only one concerned. In the
past few months, other touring acts
have canceled or turned down book-
ings to ensure they don’t get stuck in
the red-tape nightmare many Europe-
ans are anticipating when the United
Kingdom prepares to pull out of the
EU on Oct. 31.
“We have made sure our European
acts are not booked into a U.K. tour
in November and vice versa for the
U.K. acts,” says Steven Braines, CEO
of The Weird & The Wonderful, a
London-based label/management
company that represents DJs Maya
Jane Coles and catz ’n dogz, and also
promotes events across Europe. “It’s
absolute bullshit, but that was the
only way we could mitigate it — to not
have shows in either direction.”
Deal or no deal, U.K. Prime Minister
Boris Johnson has vowed the country
will leave the EU on Oct. 31, and he
hopes to reach a final agreement at an
EU summit on Oct. 17. Of the possi-
ble scenarios in play at press time, a
no-deal Brexit — in which the United
Kingdom pulls out of the EU customs
union without negotiating a soft land-
ing — is regarded by music executives
as the worst possible outcome.
“The big concern is that businesses
with smaller margins are going to find
it more difficult to withstand changes,”
says Tom Kiehl, deputy CEO of trade
organization UK Music.
The live sector is most at risk: UK
Music estimates that additional costs
and administrative charges could
reduce income by up to 40% for tour-
ing artists.
In the event of a no-deal Brexit, cus-
toms checks for touring acts entering
the country from within the EU — and
U.K. artists touring Europe — are likely
to take longer. That could affect tightly
planned schedules and lead to delays
and cancellations.
Touring acts also may need to buy
temporary international customs
documents, or carnets, costing £325
($400) in order to cover moving
equipment across EU borders. Freight
companies have warned that major
British ports like Dover and Calais
could grind to a halt, which could in
turn stop artists from getting equip-
ment and stage production into and
out of the country. A no-deal Brexit
also would require European acts
touring the United Kingdom (and vice
versa) to pay an import tax in advance
on all merchandise they bring with
them to sell to fans.
The impact on financial markets is
likely to be just as volatile, with the
value of sterling expected to tumble in
the event of a hard Brexit. “If you’re a
U.K. artist and you’re touring the U.S.
and Europe next year, getting paid in
euros and dollars, great, you’ll
earn a lot more money,” says
Simon Liddell, director of
music and entertainment at
finance specialists Centtrip.
“International artists playing
the U.K., paid in sterling, can
expect a lot less.”
For labels, the major short-term
consequence of a no-deal Brexit will
be the disruption of the physical
supply chain. In preparation, British
majors and independents have been
building up their stock of physical
product in the United Kingdom and
scheduling extra time in their distribu-
tion chain for fourth-quarter releases.
“We’ve secured a U.K. warehouse,
stocked with all our key peak-season
releases and this year’s top sellers, and
we’ve shifted our new-release timeline
so that we’re shipping physical prod-
uct earlier and mitigating any potential
border delays,” says Peter Breeden,
CFO/COO of Warner Music U.K.
Nevertheless, the industry is bracing
for delays in physical distribution. “We
do not expect new tariffs on CDs or
vinyl, but we do expect administrative
formalities, delays and costs, as with
imports and exports to many non-EU
countries,” says Geoff Taylor, chief
executive of label trade group BPI.
Retailers also fear that a no-deal
Brexit could restrict availability and
ramp up production costs of new vinyl
titles, the majority of which are manu-
factured in Europe.
Another consequence of leaving
the EU is that the United Kingdom
will no longer be required to imple-
ment the European Copyright Direc-
tive, a vital piece of legislation that
could revolutionize how user-gener-
ated content services like YouTube
pay right holders. The music business
fought hard to secure the law earlier
this year, and although the British
government has said it will imple-
ment the directive post-Brexit, even
though it wouldn’t have to, there’s
skepticism as to how quickly, or even
if, that can be achieved.
The severing of ties between the
United Kingdom and EU also would
provide a regulatory hurdle that Vi-
vendi would need to surmount before
selling part of Universal Music Group.
Right now, the United Kingdom
can apply its own antitrust rules to
mergers and acquisitions, although it
typically leaves competition inquiries
to the EU. After Brexit, any divestment
of shares would need to be approved
by both European and U.K. regulators.
One possible Brexit benefit could
be the ability to negotiate
“meaningful changes on things
like touring visas for America
and new trade agreements
with the U.S. and others,”
says Kiehl. But for now, the
dilemma occupying the minds
of artists, managers, promoters,
touring musicians and retailers across
Europe is how to prepare for the
multiple Brexit scenarios that might
play out, including the prospect of a
delayed withdrawal until 2020 or later.
“The biggest problem is that every-
thing is hypothetical,” says Braines.
“And if you’re a business like us that
represents both U.K. and European
acts, then the problems are a hundred
times worse.”
The Wasted Youth signed R&B artist IV to a joint venture with Warner Records. Atreyu’s TRAVIS MIGUEL signed with Sean Akhavan and Scott Waldman for management.
U.K. Music Business Braces For Brexit
As the deadline for Britain to leave the European Union looms, several sectors of the British
industry are making contingency plans to prepare for chaos — with live music most at risk
BY RICHARD SMIRKE
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.26 BILLBOARD • OCTOBER 12, 2019 ILLUSTRATION BY ALICIA TATONE
THE MARKET GLOBAL REPORT