South by Southwest has taken place every year since its founding in 1987.
Photo: Jay Janner/Zuma PressAUSTIN, Texas—The chief executive of South by Southwest said organizers are unsure how they will keep the festival going after the city canceled it because of the novel coronavirus, which he said could cost them millions.
Austin officials on Friday pulled the plug on the tech, music and movie event, citing the threat of the coronavirus outbreak. The move dealt a devastating blow to the finances of the festival, whose insurance doesn’t cover disease-related cancellations, South by Southwest co-founder and Chief Executive Roland Swenson said in an interview Sunday.
Mr. Swenson stressed that organizers have every intention of continuing South by Southwest, or SXSW, which has taken place every year since its founding in 1987. But he said organizers were trying to assess how much funding it would lose as a result of the cancellation and were concerned it could run in the tens of millions of dollars.
“I am most worried about my people and what this means for their future, and I don’t know what that is yet,” Mr. Swenson said. “We are planning to carry on and do another event in 2021, but how we’re going to do that I’m not entirely sure.”
South by Southwest has grown from a local music festival into a major global event, bringing hundreds of thousands of people from around the world to Austin and pumping some $355 million into its economy, festival organizers estimate.
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The cancellation of this year’s event, set to start March 13, has left organizers scrambling to reload and send back semi-trucks of supplies, take down banners and signage and halt travel plans for speakers and attendees world-wide.
“A lot of us are still in denial, as we try to stop this freight train,” Mr. Swenson said.
Though it hurts, Mr. Swenson said he agreed with the city’s call that going forward with the festival, known as “Southby” locally, would be too high of a risk for the city.
Mayor Steve Adler on Friday issued the disaster declaration based on advice from medical experts, who said the risk of an outbreak was too high, given the festival’s high attendance and visitors—many from places where the virus is spreading rapidly. The move came just two days after city officials said the event would go on as planned.
South by Southwest, which has 175 year-round employees, will have to find additional sources of income to keep from running out of money by summer, Mr. Swenson said. Leaders are finding out how much debt they can take out and whether any grants are available, he said.
The festival has hundreds—possibly more than a thousand—individual contracts with sponsors, vendors, venues, artists and others, Mr. Swenson said. Lawyers are poring over the fine print of each one, but insurance will likely not cover the cancellation, Mr. Swenson said, an additional blow.
“We’ve had to show our insurance policy to all kinds of people, and nobody ever said, ‘Hey, there’s a big hole here,’” he said. “We did not anticipate a pandemic. We’d always taken the attitude of, ‘Well, we’ll never cancel, so that’s not going to be an issue.’”
Organizers are exploring the possibility of rescheduling sometime this year—a complicated prospect given the festival’s scope, Mr. Swenson said. They should know within a few weeks whether that’s a feasible option, he said. Meanwhile, sponsors and those who paid for badges to attend festival events are being offered credits, not refunds, for another year.
Mr. Swenson is determined that South by Southwest will continue.
“Our stated business goal has always been to help creative people achieve their goals, so that’s what we’re working on now,” he said.
Write to Elizabeth Findell at Elizabeth.Findell@wsj.com
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