Aug. 05, 2015
This article was inspired by a lady and her pertinent comments on Facebook, by the pros and cons and the comments related to the post – again on Facebook, by the reactions and articles of the press and, last but not least, by the attitude of local authorities towards this much disputed and discussed festival called Untold. Finding another motivation for spending the few hours needed to write the article means spending public money.
First of all, I want to say that festivals could take place every month, every year, every trimester or every week. Why not!? However, there are some aspects that must be taken into account if festivals meet the following two conditions: if they are held on a public domain and if they are funded with public money. If these two conditions are not met, then the story changes altogether, the festival is nothing more than a private event and that’s it. But let’s stick to the events that take place with the support of local authorities, those funded by public money and using the city’s infrastructure, which is also public. Therefore, we are dealing with a public-private partnership in which everyone offers everything they have and what they can in order to fulfil everyone’s goals, while following a plan, a set of rules, contracts and so on.
The first aspect to be discussed is that of goals and objectives. In the case of a private entity, it is quite simple, we are talking about a financial profit. In the case of a public authority, it is a bit more complicated, because there are several things to consider related to the goals and objectives. Such as:
Image, know-how, recognition
Here it is necessary to precisely define what result is desired to be reached in regards to the media coverage, taking into account the communication strategy of the city. If there is one, of course. As in the case of a product or service that is advertised, we are talking of target groups that we want to reach, which are defined from a demographic and territorial point of view. Simply put, who do you want the message of the event to reach, which is the message of the event, where are these people located, i.e. the target group (they could be Romanians, Belgians, Ugandans, their age could be between 14-21 years, they could be students and retirees or anything and everything else). It all starts with the message you want to convey. Once the message – or messages – is determined, the target groups, their location and the desired result are also established.
Money and other investments
Each entity, public or private, can rely on both financial and in-kind resources to achieve their goals. In the case of both types of entities, a financial profit must exist. Economically and pragmatically speaking, it is not possible for a private entity to make a profit, while the public one does not. If this is the result, then the whole project can no longer be labelled as a “partnership”, but a “sponsorship”.
Other types of quantifying the profit
Again, in the case of a private entity, things are much simpler, the financial profit being at the top of the list. The public entity can have financial and PR gains, as well as an urban planning advantage from the point of view of the citizens. For example, culturally or civically speaking (and there are many other reasons). Ideally, all three profit plans that interest a public entity should be satisfied: the financial one, the image and PR and the one which directly benefits the citizen (cultural, civic, etc.). There may be situations when, for example, the public entity does not technically earn any money, but, by “sponsoring” the event, it has much to gain in regards to the other two plans. It is as if the public entity pays for advertising. And in this case, profitability calculations take precedence, just as in the case of a paid advertising campaign for a product or service.
So far, the logic stems from the assumption that there is a public-private partnership, with emphasis on “partnership”. Let’s see what The Explanatory Dictionary of the Romanian Language says about what a partnership means:
„A system that brings together partners from a political, economic and social point of view.”
„An association of two or more (business) partners.”
The Explanatory Dictionary of the Romanian Language introduces in the definition the notion of “system”, which means, accordingly:
„A set of elements (principles, rules, forces, etc.) dependent on each other and forming an organised whole, which puts an entire field of theoretical thinking in order, regulates the classification of material in a field of natural sciences or acts in order to function in accordance with the intended purpose.”
The definitions also introduce the notions of “association” and “business partnership”. It remains to be explained what a “partner” means:
„Each of the participants in a joint activity, considered in relation to the others.”
„Each of the persons engaged in a transaction, in a discussion, etc.”
Which leads us to the notion of “transaction”:
„An agreement between two or more parties, by which certain rights are transferred or a commercial exchange is being made.”
I don’t think a more comprehensive explanation is needed to show what a “partnership” means. In the case of public-private partnerships, the joint action is the event organised by the private sector using public funds and infrastructure. In which case the public entity is the one in the “stronger position” in negotiations and initialling contracts, because it has and can provide both financial resources, for the implicit expenses, and the infrastructure necessary for the event, which could mean: stadiums, parks, public transportation systems, security, cleaning services and so on. Without these being made available by the public entity, the event cannot take place. In exchange for these resources, they – ideally – must receive a profitable offer both in terms of image and PR and financial gains, or, as the case may be, only in terms of image, thus “paying” or “sponsoring” the event for advertising. In short, the public and the private entities reach a “commercial exchange”. And if we are talking about a commercial exchange, then, according to the legislation, it is subject (or must be subject to) clear rules of bidding, offer selection, negotiation and “transaction” initialling. Logically, this involves receiving several offers, which are subject to the conditions of a specification. Or, if we were to talk in a marketing manner – brief – because, from the point of view of the public entity, this type of transaction is, in essence, a marketing approach. Also, being a marketing approach – an expense primarily for the benefit of the alleged urban publicity – it would require an alternative cost-benefit analysis of the expenses made by the public authority using other methods and channels of communication.
A brief and a contract could presume, in short, the following establishments:
– Qualification criteria for tenderers
– Aims and objectives pursued
– Message(s) to be sent
– Target groups (demographic, social, economic, territorial)
– Allocated budget
– Deliverable items
– Activity calendar
– Payment schedule, related to the activity calendar and deliverable items
– Mutual rights and obligations
– Copyright rights and obligations
– Methods and criteria for verifying deliverable items during the partnership
– Methods and criteria for verifying deliverable items at the end of the partnership
– Methods and criteria for quantifying the benefits (achievement of aims and objectives)
– Report on the media impact on target groups at the end of the partnership
– Responsible individuals (nominal)
If the brief exists, it must be based on several previous documents, issued and adopted (assumed) by the public entity, along which lines any private entity must align:
– City development strategy
– The city’s brand strategy
– City communication strategy
– Standard city rules applicable to public-private partnerships in the event of unforeseen incidents
– Report and necessity notice
– Financial cost-benefit estimation
– Average cost-benefit estimate
– Studies on the potential impact: environment, public spaces, public order, pollution of all types and so on
– Legislation in force
Până acum am încercat să analizez defalcat fiecare aspect al unui parteneriat public-privat aplicabil mai ales pentru evenimentele de mari dimensiuni care se realizează utilizând fondurile și spațiul public.
So far, we have tried to break down every aspect of a public-private partnership applicable, especially for large-scale events that take place using public funds and infrastructure. We need to take a closer look in terms of financial benefits. The financial sources of a local authority are already known: property taxes and duties, cars, fines, flat taxes of various types (taxi drivers, etc.), and the state budget. This does not include the corporate profit tax, health insurance, VAT, all these taxes go to the state budget. Therefore, the economic justification of the benefits of an event cannot directly discuss the profits made by economic operators who earn money from the event: accommodation, restaurants, bars, services, etc., because they all pay their taxes and duties to the state budget. In this case, the economic logic which should be applied in relation to the event must estimate the taxes and duties of the economic operators, while a percentage out of these taxes should be returned to the local budget from the state budget.
Sponsorships are another source of income. A third source of income is represented by ticket sales. The fourth is the sales of “merchandising”, i.e. T-shirts, caps, souvenirs, etc. All these sources of income must be regulated from the point of view of a partnership. Because it’s all a transaction, isn’t it!?
I found an interesting and valid article about building the identity of Romanian cities through festivals and cultural events. The article can be found here and is worth reading: https://www.hotnews.ro/stiri-administratie_locala-20338017-brand-oras-cum-isi-construiesc-identitatea-marile-orase-romanesti-ajutorul-festivalurilor-culturale.htm. This article refers to prestigious cultural events such as TIFF, Sibiu International Theatre Festival, Anonimul International Independent Film Festival and other similar events. I share the author’s opinion, but to refer to festivals such as Untold by labelling them as something “cultural” is a bit too much. After all, we are only talking about an outdoor “club” with DJs and fireworks and nothing more.
The Explanatory Dictionary of the Romanian Language offers us the necessary explanations referring to the term “culture”:
„The totality of material and spiritual values created by mankind and the institutions necessary for instilling these values. ♦ Possessing various knowledge from various fields; the sum of all this knowledge; (high) level of intellectual development that one reaches. ◊ Man, of culture = person with a high intellectual level, who possesses solid general knowledge. ♦ Set of activities and patterns of behaviour specific to a given social group, transmissible through education.”
And here I think it is necessary to define the term “education”, which the dictionary says it can help you become cultured:
„Fundamental social phenomenon of transmitting the life experience and the culture of the adult generations to the generations of children and young people, the empowerment for their integration in the society. Know-how of good manners and of behaviour in society according to these manners. Set of knowledge, skills and abilities, taught to someone or acquired by someone who aims to acquire general knowledge and a professional specialisation; teaching; education; training.”
About the European Youth Capital:
„MISSION AND OBJECTIVES. The mission of the programme is to reinforce the role and support given to young people, for young people and to youth organisations in their active participation in changing society through a process of sustainable, responsible and inclusive urban development, by sharing culture, power, workload, a space, joy, the collective European vision and values, by addressing issues such as youth empowerment and support, mobility, information and structured dialogue in a one-year programme located in Cluj-Napoca.”
Regarding Untold in particular, labelled as a cultural event and held under the umbrella of the European Youth Capital, I would personally like to see three documents made public by the local authorities, with registration number, date, stamp and signature, containing:
The first one: Financial cost-benefit ratio report;
The second one: Media impact cost-benefit ratio report;
The third one: Study on the cultural impact of the event on the young population, and the educational methods used, seen through the prism of „Mission and Objectives”.
If these documents do not exist, you watch two videos on YouTube and see for yourself: