Well, pretty much everything fun is cancelled or postponed thanks to that pesky coronavirus: All kinds of basketball, the start of baseball season, Coachella, Broadway, and entertainment performances at all levels. If you bought tickets to any of these events, what the hell happens now? How much money will athletes and entertainers lose? Who’s gonna be holding the bag at the end of all this? Alongside Kent Schmidt, an attorney who specializes in business litigation, we’re refunding some answers.
So, about my tickets. Can I get a coronavirus refund?
If the event is cancelled, definitely. If it’s postponed, in some cases you can get a refund, or you can just hang onto your ticket until the event finally takes place. The NBA is honoring tickets for rescheduled games, or will refund them if the game ultimately takes place in an empty arena. Coachella will honor tickets when it gets rescheduled in October, but if customers can’t make the new date, they can request a refund. If you purchased Broadway tickets for a show before April 12th, you can get a refund, but the whole process will take a few days. For other concerts and events, Ticketmaster will refund or exchange tickets for events that get canceled or postponed per its terms and conditions.
That all sounds surprisingly generous from what’s normally a pretty sleazy industry.
“Consumers have a lot of protection, and would also take to Twitter and social media if they’re left holding the bag,” Schmidt says. “And there’s always the threat of consumer class actions — there have been a number of class-action lawsuits that have involved ticket holders when something’s cancelled. So consumers have a lot more protection than commercial entities — companies — because of that.” Schmidt further explains that contracts involving consumer parties versus commercial parties are simply viewed differently in the law. Hooray for us!
But what about the performers and everyone else?
Right — then the question is, who’s left holding the bag when the event doesn’t take place? As Schmidt points out, a lot of bills have already been paid between the commercial elements: the food vendors, the security, the sponsorships, all of that behind-the-scenes stuff. It’ll likely involve lawsuits.
How will the courts sort it all out?
With years of litigation, of course! “These issues come down to contract questions including the language in agreements, and applying contractual doctrines,” Schmidt says — the fine print, in other words. But he also says that the courts will likely be fairly equitable: “Particularly for situations in which one party is better able to absorb the loss, the courts will apply a fairness principle,” Schmidt says. That’s a nice thought — if it turns out that way.
So Billie Eilish won’t exactly be busking on the subway, in other words.
Nope. Her tour just got canceled, like many others, but it’s not the performers you need to worry about — they can absorb the loss! The bigger ones, at least — mid- and lower-level bands will definitely struggle. But it’s a problem even for the higher tier entertainers, or rather, everyone involved except them: Behind every great entertainer there’s a ragtag army of nylon-jacketed security guards, concession-stand workers, turnstile sentries, purse checkers, wristband application specialists, pat-down experts, sound-check dudes, you name it. They, like pretty much all restaurant workers these days, are going to be taking the biggest hit.
Why do they take a bigger hit?
Because these are often temp jobs — they have no job security, Schmidt says. And when the event doesn’t go off, the security company and all the other contractors don’t get paid (at least immediately, even if they sue), and the company won’t be hiring their temp labor for anything. With far less projected revenue amid a pandemic, everyone — these contractors, event companies, sports franchises and stadium management companies — might have to lay off some of their full-time staff as well.
Basically, this is going to be big, and it’ll affect everyone, starting at the very top — but as always, the effects will for the most part be felt furthest downstream, at the very bottom of the pay scale, as temporary workers with no job security might not be able to make rent now.
There is a little silver lining, though: Several NBA stars and owners have said they’ll help cover the lost income of these everyday arena employees during the league’s hiatus, which is a welcome gesture from a bunch of multi-millionaires.
How would the various event companies legally get out of their contracts?
It goes back, Schmidt says, to an English law called “frustration of purpose.” It arose from the cancellation of a coronation in 1902, and some angry customers who’d rented rooms along the coronation route. “The courts held that, even if it were possible for the contracts to be performed — renting rooms along the parade route — the entire purpose of the transaction was to view the coronation,” Schmidt says. “Thus, the purpose of the contract was frustrated and the parties should be released from their contractual obligations.”
In much the same way, hundreds of ancillary contracts around sports events fall under this rule: Without fans in attendance, the purpose of the contract is frustrated and the party should be released from having to perform, Schmidt explains.
How much money will, say, pro athletes lose?
A lot for the rest of us, but not a lot for them. The NBA can reduce a player’s salary by 1.08 percent for every canceled game. In LeBron James terms, that’s $404,286. His playing contract is worth $154 million (and never mind his other contracts, like the one with Nike) so he shouldn’t lose much sleep over this.
The NBA, meanwhile, could lose “hundreds of millions.” They’re considering playing games in empty stadiums just to keep the sport on TV, and yeah, that would mean refunding everyone’s tickets for those games. But spare a thought for CBS, which won’t have the NCAA basketball tournament to show this year (it got canceled). Last year, the ad revenue for the tournament brought $655.1 million to the network — and it requires a huge staff to put on.
So… this is gonna suck for everyone, then?
Yeah, but not as much as having the coronavirus. Which is the whole point of all of these cancellations, isn’t it?
Adam Elder
Adam Elder is a writer in San Diego. He's also written for Esquire and WIRED magazines, VICE, The New York Times, The Wall Street Journal, The Guardian, newyorker.com and elsewhere.
