Island On The Rise

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When President Barack Obama established diplomatic relations between Cuba and the United States in December 2014, many thought the early business opportunities would be in sugar, cigar, and new tourist hotels. But one of the first big U.S. ventures in Cuba was a music festival in 2016, a Coachella-scale event that attracted almost a half-million people to Havana’s waterfront to hear bands from the United States, Cuba, and other nations.

The four-day event, staged by the New York-based nonprofit Musicabana Foundation, was the culmination of thousands of hours of behind-the-scenes work in maneuvering through legal and diplomatic issues, not to mention bridging a still-wide cultural and political divide. Music may not be the main business between the two nations in the future, but the event offers important lessons in how to pursue business opportunities in Cuba. 

Although music festivals are big business – Coachella ticket sales in 2016 were $94 million – Musicabana organizers recognized from the beginning that a music event in Cuba would be fortunate just to break even.

Building cultural ties was their primary goal, but Musicabana organizers still had to be mindful of financial issues since staging music is an expensive undertaking. Early on, Musicabana organizers acknowledged they wouldn’t be able to sell tickets to the event in a country where the average monthly salary is the equivalent of $25 a month. Buying a $375 festival ticket, the price for the cheapest ticket sold for the 2016 Coachella, would be incomprehensible for the average Cuban. With most of the country struggling just to put food on the table, it will be a long time before U.S. businesses can sell much of anything to individual Cubans.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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