Russian Economy Zaps Promoters

Despite the interest rate being hiked to 17 percent to deter speculators, on Dec. 17 it needed nearly 60 Russian rubles to buy a dollar – nearly double what it would have cost a month ago.

Promoters who’ve agreed to deals in dollars are now having to pay twice as much to buy the American currency.

Russia – which depends on oil and gas for half its tax revenue – needs the price of a barrel to be at $100 to balance its books, but the current price is nearer to $60.

Even before it started to throw its military weight around in Crimea and Ukraine, the Russian economy was in trouble.

The plummeting oil price and Western sanctions imposed as a result of bullying its neighbours have seen Russia move close to meltdown.

“The situation is critical. What is happening here is a nightmare,” the central bank’s vice chairman Sergei Shetsov told the UK’s Daily Telegraph.

“It’s like being on a big dipper where part of the track has collapsed. You can either jump or stay on till the car flies off the rails,” said Nick Hobbs of Istanbul-based Charmenko, which regularly works as an intermediary for Russian promoters.

“Every promoter with international acts confirmed is in a big mess. … Ticket prices simply cannot be increased enough to compensate for what’s effectively a doubling of artists’ fees,” he said.  “Right now we are depending on the understanding of the artist,” Michael Shurygin of Nord Concert Alliance told Pollstar.

In reality, the Russian promoters need international acts to either cut their fees to make their shows viable or postpone them until the economy steadies.

Shurygin has a Robbie Williams show at St. Petersburg’s 20,000-capacity SKK Arena on sale at 3,000 rubles ($49.24) a ticket.

“We would need to increase the price to 4,500 rubles ($73.93) or 5,000 rubles ($82.14), but people simply won’t pay that amount,” he said.

Ed Ratnikov of Talent Concert International says his Robbie Williams show at the 16,000-capacity Moscow Olympic Arena was selling well until the ruble crashed.

“Now we see that people are simply shocked and can’t believe what’s happening,” he explained.

Shurygin says Russian economists don’t expect the currency to stabilize until April, when the Williams shows are due to take place.

He says he’s cut a Julio Iglesias show to a smaller venue, where he’ll break even if it sells out. He also postponed negotiations on a Russian tour for The Rasmus when the ruble went into freefall.

Other acts due in Russia in the early part of 2015 include Muse, Nick Cave, and Limp Bizkit.