Hong Kong's public events and shows have taken a beating in the past nine months, as the coronavirus outbreak and last year's anti-government protests forced hundreds of pop concerts, art shows and sports tournaments to be cancelled in the city.
While the cancellations have driven hotel occupancy to record lows and sent the exhibitions industry into an unprecedented slump, they have also left thousands of corporate sponsors bleeding, with multimillion-dollar sponsorships going up in smoke.
Art Basel cancelled its contemporary art fair in mid-March, while the Hong Kong Arts Festival called off 120 performances in February and March. Canto-pop star Andy Lau Tak-wah scrapped a dozen concerts scheduled for mid-February, after Eason Chan cancelled a 25-show run in December. All these cancellations add up to millions of dollars in sponsorships.
"Companies pay a lot of money [in sponsorships] to promote their brands during popular concerts and shows," said Kenny Ng Lai-yin, securities strategist at Everbright Sun Hung Kai. "Their promotional goals would not be achieved when these events are cancelled."
Hong Kong's economy is in its first technical recession in a decade, after many months of anti-government protests drove away visitors, especially the deep-pocketed tourists and shoppers from mainland China, leaving the city's luxury retail industry in the doldrums.
To make matters worse, more than 90 people caught the coronavirus in Hong Kong, with two deaths.
That has prompted schools and public venues to be shut, while public servants and many businesses worked from home. The result is a further decline in consumption, retail sales and attendance at shows or concerts.
Quartetto di Cremona performing at the 2019 Hong Kong Arts Festival. Photo: Facebook alt=Quartetto di Cremona performing at the 2019 Hong Kong Arts Festival. Photo: Facebook
At the Hong Kong Arts Festival, as many as 20 sponsors collectively paid HK$55 million (US$7 million) to get their names and logos on to the billboards and pamphlets advertising the 120 ballet, dance, drama and classical music performances scheduled in February and March.
The sponsorships make up more than a third of the festival's 2020 operating budget of HK$148 million, featuring such patrons as the Hong Kong Jockey Club, the developer Sino Group, two large insurers and ICBC Asia, a unit of one of China's largest state banks.
The unprecedented cancellation in the 48-year history of the Hong Kong Arts Festival has forced the organiser to refund part of the sponsorship according to contract, said a spokeswoman, adding that the sponsorship contracts contain terms and conditions for cancellations.
Such clarity may not be taken for granted at private sector events, said Haywood Cheung Tak-hay, president of the Chinese Gold and Silver Exchange Society, who had experience sponsoring pop concerts including the 2015 show by Canto-pop star Gloria Tang Tsz-kei and a show by Air Supply.
A promotional poster for Eason Chan's concert Fear and Dreams, sponsored by the insurer FWD. Photo: Facebook alt=A promotional poster for Eason Chan's concert Fear and Dreams, sponsored by the insurer FWD. Photo: Facebook
Sponsors usually pay a lump sum, or a base fee for every night that the show runs, he said.
"The sponsorship is usually between HK$100,000 and HK$500,000 per night, depend on the popularity of the show or its star," Cheung said.
"Usually, if the show or the concert carries the sponsors' names in advertising, the sponsors would not be entitled to refunds because they already have had some brand exposure.
For those who sponsor hotel rooms, transport or venues for the shows," those commitments can be released for other commercial purposes, he said.
Andy Lau during his concert in Hong Kong on Saturday, December 15, 2018. Photo: AP alt=Andy Lau during his concert in Hong Kong on Saturday, December 15, 2018. Photo: AP
Chan's concert, which was to run from December 9 to January 7 at the Coliseum in Kowloon's Hung Hom, was called off amid concerns that anti-government protests would disrupt public transport to and from the area.
The cancellation of the concert would not deter FWD from future sponsorships because sponsorships are effective ways to get the brand out to the mass market, said a spokeswoman of the life insurer, declining to divulge the amount of sponsorship spent on Chan's concert. The concert organiser has arranged to refund all tickets sold at the concert.
Sports events have also taken a beating in Hong Kong. New World Development cancelled its Victoria Harbour Swim last November, while Standard Chartered Bank cancelled its February 9 Hong Kong Marathon race.
Still, not all is lost. The Cathay Pacific/HSBC Hong Kong Sevens, the rugby tournament that perhaps stands as the most famous in the city's annual sports calendar, would be postponed to October, from April.
"We identify events that can enhance our client relationship," said Agnes Chan, the Hong Kong and Macau managing partner at EY, one of the corporate sponsors of the venue at Hong Kong Stadium.
"We look forward to supporting the Rugby Sevens in October," with clients and partners at its corporate box, she said.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.