The Economy of Events
Our newsletter's primary function is to seek out and share complex data related to Plumas County's economy. Many decisions and extensive planning are often based on opinions. These opinions are based on personal experience, perspectives, favoritism, prejudice, wants, and desires. Not based on factual data.
A perfect example is big-name entertainment at the annual Fair. I would wager that an overwhelming portion of our county’s population would love to see a significant star come and perform. A couple of the most common reasons to justify this kind of entertainment are: if we got someone perfect, we would sell out the grandstand, and we used to have big-name entertainment all the time. These reasons are usually expressed with complete confidence and, sometimes, a bit of irritation that we don’t do it already. If only they had the data, they might not be so confident or irritated.
I will share the data in a moment, but to save some time, I want to point out that this exercise is no different as it pertains to every business in Plumas County. You can’t let wants and desires drive decisions that can and will probably run you out of business. There is a reason we don’t have a McDonalds in Plumas County. There is a reason we have several Dollar Generals. Each of those businesses uses nothing but data to drive their decisions; they know how many people live within a certain distance from their businesses. They know the average income of those people, how many of them are employed, how many kids are in their families, and how often they eat out or visit a variety store. They have the resources to gather that information, and that’s what the Plumas Business and Economic Report aspires to do.
Back to the entertainment at the fair. Most people don’t know how much money it takes to put on a concert or some of the considerations involved. Here is a couple; to bring a top act already touring, it’s a safe bet their fee will be in the 6 figure range. Then, the promoter(the Fair) must provide a stage, sound, and lighting that meets the act’s requirements. This could quickly push $200,000. If your sights were set on a more modest performer, say a 1990s country act that brings a decent level of recognition, they could range in the $40,000 to $50,000 range, and their stage, sound, and lighting requirements are more realistic, but could still be in the area of $10,000 to $15,000. Some of those numbers may be eye-popping, but who cares how much it costs if you can sell enough tickets?
The grandstands at the fairgrounds seat around 3,000, maybe more if you had “festival seating,” meaning people standing before the stage. Tickets for someone like Wade Hayes in a major city can run around $200. Smaller venues can be as low as $30 to $40. If we sold out and grossed $120,000 (let’s figure on $40 tickets), we would be coming up short as much as $60,000. If we could hire a more reasonably priced act as described above, with a more appropriate price ticket of $25, a sell-out would yield a gross of $75,000. There is an opportunity for a bit of profit there.
Like a regular business, it’s time to do some gut-checking. Use some common sense. Find out some history. Ask some questions. If we invest all our money into this business/concert, will the best-case scenario described above happen?
On the busiest days of the Fair, we might have around 2500 people in attendance. If we have our concert, would all 2500 of those people go into the Grandstands, as well as another 500 people? Or some other combination? With the name recognition of a well-known act, would people travel to Plumas County to see them? Or would they go to a bigger city where the group may be performing with another famous band, and they could stay in one of the plentiful motel rooms?
History reveals that in the past 15 years, the biggest Grandstand event was the rodeo in the grandstands, with 780 in attendance. ($20 per person = $15,600/Cost of rodeo=$19,300) History also reveals that even when Reba, Alabama, Johnny Cash, and other great stars of the time performed at our fairgrounds, there was never a sell-out. There might have been many more people willing to go, but these acts were priced very reasonably in the era before Garth Brooks. The bottom line is we would all love to have a big name come to our county to perform, but the economics for the fairgrounds don’t work out. But it can in other circumstances.
The High Sierra Music Festival is an example of what can occur in Plumas County. Just so you know, we have no information as to the business of the Music Festival, but we can certainly draw some conclusions. First and foremost, bringing over 10,000 people to Plumas County is possible. It may be inconvenient for a few days for locals, but there is space and infrastructure to accommodate an event that size. Make no mistake, it is the professionalism of the promoters that make that a reality; planning, security, communications, scheduling, sanitation, safety and permitting make the High Sierra Music Festival one of the better run festivals in the country. They have invested in and assembled a staff that knows every aspect of the operation and returns year after year. These points are emphasized to show that it’s not just about getting a bunch of people to our county, it’s about managing them while they are here for their safety, the local’s safety and like any business, create an excellent reputation to bring customers back every year.
It is well to point out the obvious still: the vast majority of these attendees are not local. The High Sierra Music Festival has an excellent reputation, markets year-round across the entire West Coast, and has resources specifically to sell tickets. With all this in place, it’s good to know that significant events can be held here, and people will attend.
Does that mean it makes business sense to have this kind of event? We don’t know. We must assume it has been worth it for many years, but things change. Costs for porti-potties, insurance, security, and advertising have gone up. Just like any business, event organizers have to constantly assess their business plans. The festival has released information that they are facing some of these challenges.
What does that mean? Like every other business in America, they are probably looking at different ways to do business while still retaining the goodwill equity they have built over decades. How about us? What does the festival mean to us economically speaking?
This festival and the annual fair are the most significant special events in Plumas County. The one thing they have in common is the Plumas Sierra County Fairgrounds. Many of us who have grown up in the county tend to have a more familial relationship with the fairgrounds. It’s where we rode the Zipper for the first time, attended a football game, or experienced a first date. We love to play up those emotions when talking about the fairgrounds. However, these 62 acres in the center of the Sierra Nevada are an economic powerhouse with a disproportionate impact on our community compared to other fairgrounds. By this we mean, in other communities, their fairgrounds may be one a dozen facilities that can host weddings, memorials, gun shows, dinners and even festivals. In Plumas County, nothing is comparable to the camping infrastructure, sanitation infrastructure, parking, buildings, and multi-use facilities you will find at the fairgrounds. For that reason, we are uniquely prepared for anything from a music festival to a fire camp to a county fair.
And when these things happen, it impacts the local economy. About 13 years ago, the California Department of Food and Agriculture assembled an economic impact report of California Fairs, including specific information about the Plumas Sierra County Fair. According to CDFA research, the Plumas Sierra County Fair generated approximately $6,450,000 in spending activity alone in 2009 and created the equivalent of 79 jobs. These numbers are a bit more vague about their impact in larger markets than in small markets like ours. We know there are not 79 people working in our area just because of the fair. But, what’s important is the amount of money generated, whether it creates jobs or helps pay for a utility bill; it’s money being generated that might not be here if there weren’t the fair and other fairground events.
Tax revenue is another story; in 2009, the fairgrounds generated an estimated $95,500 in sales tax, TOT, possessory interest taxes, and other fees. That is all plus money to the county since, over the past five years, the Fairgrounds have generated enough revenue on their own and have not received any general fund money from the county. With oversight and encouragement from Plumas County, other events throughout our county could do the same.
