Greg Abbott's Fight With Musicians Puts $300 Million at Risk

Texas Governor Greg Abbott's warning to musicians who have pulled out of the South by Southwest festival (SXSW) over the U.S. Army's sponsorship could put the festival's economic impact of $300 million at risk.

The internationally recognized festival brings thousands of visitors to Austin each March, showcasing music, film and interactive media. This year's festival is running through Saturday and includes live panels and special events.

In 2023, SXSW brought in $380.9 million of spending activity to Austin, surpassing even pre-pandemic numbers, according to an analysis by Greyhill Advisors.

On Tuesday, musicians including Kneecap, Lambrini Girls, Scowl, Gel, Okay Shalom, Squirrel Flower and Sprints began pulling out of SXSW in protest of the U.S. Army's sponsorship amid heightened tensions in the U.S. and around the world due to the ongoing Israel-Hamas war. The musicians have cited the U.S Army's role amid the conflict as the U.S. has provided strong support and military aid to Israel following Hamas' October 7 attacks.

Abbott criticized the musicians in a post on X, formerly Twitter, warning them "don't come back" to the state.

"Bands pull out of SXSW over U.S. Army sponsorship. Bye. Don't come back. Austin remains the HQ for the Army Futures Command. San Antonio is Military City USA. We are proud of the U.S. military in Texas. If you don't like it, don't come here," Abbott wrote.

There are concerns that the governor's warning could put the revenue that the festival brings in each year at risk. Newsweek has reached out to Abbott's office and SXSW via email for comment.

"SXSW does not agree with Governor Abbott," SXSW wrote on X. "We are an organization that welcomes diverse viewpoints. Music is the soul of SXSW, and it has long been our legacy. We fully respect the decision these artists made to exercise their right to free speech. Across the globe, we are witnessing unspeakable tragedies, the rise of repressive regimes, and the increasing spread of violent conflict. It's more crucial than ever that we come together to solve these greater humanitarian issues."

After a two-year pause in the festival due to the COVID-19 pandemic, the event's impact on the Austin economy in 2022 totaled $280.7 million, according to SXSW, as it typically attracts over 300,000 people each year.

Last year, the number jumped to $380.9 million, with attendees spending on festival partners, local businesses and vendors like hotels, venues and bars. There were 11,444 hotel reservations made for SXSW in 2023 and direct booking through the festival brought $2.6 million in hotel occupancy taxes, which supports the City of Austin's live music fund.

Data provided by the festival shows that attendance accounted for $234.1 million of economic impact, with operations totaling $88.7 million and expenditures from festival partners totaling $58 million.

The flap comes as musicians continue to fight for higher pay from the festival. SXSW announced in June 2023 that it would be raising the pay for musicians in 2024 through its showcase application, with eligible bands that opt for pay to receive $350 and solo artists $150. The announcement came after the Union of Musicians and Allied Workers (UMAW) began a fair pay campaign against SXSW in 2023.