Email shows how SXSW is scrambling after a no-refund coronavirus cancellation that leaves sponsors and attendees hanging

  • Austin, Texas-based SXSW cancelled the festival last week over coronavirus-related concerns and only offering refunds on hotel reservations.
  • The festival’s organizers are trying to minimize the damage by deferring payments until 2021, 2022, or 2023 and working to set up a “virtual online experience.”
  • Advertising and events executives said the cancellation could have ripple effects across their industries and lead to reduced spending on such events.
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Austin, Texas-based South by Southwest cancelled the tech, music, and film festival for the first time in its 34-year history over concerns about the spread of the coronavirus and won’t refund attendees and vendors. 

An email, printed below, that SXSW sent to registered attendees and vendors on March 6 shows how the organization is scrambling to minimize the damage without providing any refunds beyond hotel fees. Passes to the event ran about $1,400 per person for mid-priced interactive badges that last the length of the 9-day festival, said one source, with discounts for larger groups.

SXSW is offering to defer amounts paid for this year’s festival until 2021, 2022, or 2023.

Several ad agencies told Business Insider that they and their clients stood to lose thousands of dollars but that the local creative and service industries would take a far bigger hit.

The scenario provides a preview of the potential postponement or cancellation of other ad industry events such as the Cannes Lions festival, scheduled for June 22-26. Chairman Philip Thomas said the festival’s parent company, Ascential, is planning for all possibilities.

SXSW did not respond to a request for comment.

SXSW is negotiating to defer payment for agencies and sponsors, but not providing any refunds beyond hotel reservations

In addition to attendee passes, costs to sponsor events can run as follows, according to one agency:

  • A daylong event officially sponsored by a company runs $10,500
  • A evening event with a featured speaker is $5,200
  • A sanctioned event, which does not appear on the SXSW schedule but bears its logo and stamp of approval, costs $5,200
  • A sanctioned event without “marks” or logos costs $2,600 

Also hurt are agencies that planned to stage events at SXSW for clients. Krystle Loyland, CEO of Austin ad agency Preacher, said experiential agencies would be hardest-hit.

Kristin Owen, co-founder and chief operating officer of Austin-based events company DoStuff Media, said everyone from major concert organizers like LiveNation to local servers, bartenders, florists, and Airbnb hosts who relied on SXSW would be impacted.

Screen Shot 2020 03 09 at 2.10.33 PM
Slides from SXSW’s sales efforts shows what sponsors get.
SXSW
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SXSW

Some ad agencies said clients have been reducing spend on SXSW over the past several years

Executive strategy director Elizabeth Thompson of IPG’s R/GA Austin said clients had already scaled back their SXSW investments over the past three to four years as attendees lost interest in events like huge stages sponsored by advertisers and wild cryptocurrency parties.

The cancellation could lead agencies to question the long-term value of such events and pay closer attention to the terms in their contracts, Loyland and Thompson said.

Read the full SXSW email to agencies, sponsors, and vendors below.

Dear ____,

The SXSW staff has been working diligently to produce our 2020 events and we know you were looking forward to participating.

The City of Austin has cancelled the March dates for SXSW and SXSW EDU. SXSW will faithfully follow the City’s directions, and we are exploring options to reschedule the event. We are also working to provide a virtual SXSW online experience as soon as possible for 2020 participants, starting with SXSW EDU.

We are devastated to share this news with you. “The show must go on” is in our DNA, and this is the first time in 34 years that the March event will not take place. We are now working through the ramifications of this unprecedented situation.

In addition to the online and potentially rescheduled events mentioned above, 2020 registrants can opt to defer their registration to 2021, 2022, or 2023. We will be in touch soon with a system for deferral and FAQ. 

You don’t need to take immediate action regarding your 2020 registration. It will remain in our system for future opportunities that will be available to you. If you have any questions, please email reg@sxsw.com. 

If you have booked a hotel through SXSW Housing & Travel, your reservation will not be automatically cancelled. To change or cancel your reservation please follow the instructions in your SXSW Hotel Reservation Confirmation email. 

We will continue to work hard to bring you the unique events you love. Though it’s true that our March 2020 event will no longer take place in the way that we intended, we continue to strive toward our purpose – helping creative people achieve their goals. Please see our full statement here

We deeply appreciate your ongoing participation and support.

SXSW

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