Image: Adam Peterson
Dustin Safranek  /  AP
Adam Peterson enjoyed last year's Harbor Fest in Racine, Wis. He won't be able to this year.
updated 7/8/2008 4:26:53 PM ET 2008-07-08T20:26:53

For the first time in more than 20 years, the organizers of the Harbor Fest musical festival in Racine, Wis., were forced to cancel their seminal summertime event on the shores of Lake Michigan.

Sure, attendance has dwindled in recent years, but rising costs and a 40 percent drop in corporate sponsorship dealt the final blow. "It boiled down to, if we can't do it the right way, let's just not do it," said Joe Mooney, the event's organizer for all but one year.

Mooney's misery has company. From a hot air balloon festival in Jackson, Mich., to parades in Clearwater, Fla. to a seafood festival in Annapolis, Md., organizers grappling with the effects of a weakening economy are calling it quits. Or at least putting off their events until next year.

Corporate sponsors are pulling out as they worry about their own financial well-being, let alone donating money to a festival. Organizers are reluctant to raise ticket prices since families shelling out $4-a-gallon for gas may not want to pay the extra money. And costs for hiring bands, vendors and renting grounds are rising.

There are tens of thousands of festivals and parades across the country each year, ranging from events with a few balloons and a tent to those with rides, musicians and acres of vendors. Summer is the peak season, said Ira Rosen, the North American director of the International Festivals and Events Association.

The economic impact is big, with festivals generating hundreds of millions of dollars for organizers, many of which are nonprofit and donate proceeds to charities. They also boost local businesses, including hotels, restaurants and retailers. As many as 80 percent break even each year, Rosen said.

This year, festivals are weighing their options and studying the impact of tough decisions like raising prices. It's unclear how many have decided to cancel or delay their events for a year, though attendance so far has been flat, Rosen said.

A number have opted to remain free but request donations to help cover costs.

Problem is, not everyone is willing to pay. Donations didn't generate enough cash this year for the Sarasota Arts Day festival, and it lost so much money that organizers decided to shelve next year's event.

The festival, which normally draws about 25,000 people to downtown Sarasota, Fla., during a weekend in January, doesn't charge attendees but suggests they make contributions. Those dropped by half to just over $15,000 from last year, and the fair lost $30,000, said Martine Meredith Collier, executive director of the Sarasota County Arts Council, which organizes the fair. The year before, it lost $3,700, so this year's loss was nearly 10 times that.

"You can't keep doing that and stay in business," Collier said.

In Racine, Mooney and other organizers decided it would be best to table their music festival this year with the hope of bringing it back next year. As they looked at organizing this year's event, they realized they'd struggle to find ways to pay the more than $300,000 needed since corporate sponsorships were dwindling, he said. Many of them were local, Racine-area businesses, such as grocery stores.

Attendance wouldn't help make up the shortfall since it was about 20,000 in recent years, down from 30,000 years ago. Organizers also considered raising the $8 ticket price, perhaps by 50 percent to $12, but feared that would turn people away.

Longtime Harbor Fest-goer Drew Goldberg, 42, hopes the festival is back next year. At past Harbor Fests, he's seen acts like Blue Oyster Cult and Grand Funk Railroad for far less than he'd pay to see them elsewhere. Goldberg believes the festival should have been put on, even if on a smaller scale.

"They could have maybe not had a major band and just showcased local acts this year," he said.

This year would have marked the 43rd anniversary for the Maryland Seafood Festival, which draws about 20,000 people over a weekend each September.

It costs about $240,000 a year to put on and raised nearly $200,000 for charity, said Bob Burdon, president of the Annapolis and Anne Arundel County Chamber of Commerce, which organizes the event.

Organizers lost a major corporate sponsor, Capital Gazette Newspapers, which publishes the local paper The Capital. It decided not to sponsor its usual crab soup cook-off this year or provide free advertising, said Tom Marquardt, editor and publisher.

The festival's organizers also predicted attendance would drop at least 20 percent, with some of that caused by construction on roads leading to the event. A poor turnout could have wiped out money for future events, so they decided to shelve it, Burdon said. From what he's seen of the economy so far this year, he thinks they made the right decision.

"Attendance would have been significantly down," Burdon said. "The festival, it if went into debt, then it could really jeopardize our ability to go on."

Now they're working on planning the 2009 event. But even that's not certain.

"I see no reason why we would not be back next year," Burdon said. "Unless something drastically happens and the economy goes even more south."

Some people are putting up a fight. Les Johns didn't want to let the parade held each summer in the Milwaukee neighborhood of Bay View die out due to lack of corporate sponsors.

In years past, he remembers when sponsors would come to him for the summer festival, called South Shore Frolics, that he helped run on the city's south side. But this year he and other members of the Bay View Lions Club sent letters, made calls and did anything they could to save the parade.

A car dealership eventually agreed to pay the $20,000 it takes to put on the parade. So it'll go on as planned on Saturday, continuing a nearly six-decade long tradition.

Johns said the parade is part of the community's identity. And his.

"I grew up on the parade route. I've watched the parade since I was 5 years old," he said.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.73%
$30K home equity loan FICO 5.26%
$75K home equity loan FICO 4.70%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.42%
13.42%
Cash Back Cards 17.94%
17.94%
Rewards Cards 17.14%
17.14%
Source: Bankrate.com