Q – Have been wondering a few things financial regarding artists, recording and touring. When you go on the road (without major label support), are you paid a set fee to appear, a percentage of the gate, or by some other calculation? If you bring backing musicians with you, are they salaried by you per show or tour? Same goes with recording albums. Do artists such as yourself finance the entire cost of recording your material? Do you pay the session musicians hired for the recording, and the folks who do the mixing and mastering?
A – I’ll answer this one question at a time.
When I play a concert I receive a fee which my agent has negotiated for me. For their work, the agent takes a percentage of that fee. Fees are normally paid in two installments – the first payable well in advance of the show to show good faith and to ensure that the artist is covered for any advance costs in case of cancellations, the remainder is paid on the day of the show. The fee may be a flat fee or it may be a guarantee + a percentage break dependent upon various factors, but usually just attendance. For example if a venue holds 1000 people, the fee guarantee might be based upon 800 people attending, or the approximate amount generated by 800 ticket sales less the costs – room rental, PA rental, staff, catering, advertising, promoters fee, etc. If more than 800 attend then a percentage of the income from the ticket sales after the first 800 will be added to my flat fee, so if a show sells out, I almost always make a little more than if it doesn’t, sometimes a lot more, depending upon how the deal is structured. In the above example, so long as my expenses – wages, hotels, vehicle rental, etc do not exceed my fee guarantees, then I cannot lose money. The promoter, on the other hand, can lose money – he will have an attendance figure that he is effectively gambling on – in the above example it might be 500: if 500 attend then he breaks even, the 500 – 800 range is only relevant to the promoter, for me I make the same regardless… obviously I prefer to play a full room, but the closer to sell out the better he does, and after 800 both parties are happy.
That seems simple enough, right? And I’d guess that it makes sense that if the band or artist is doing well and a tour is expected to sell out then the agent can negotiate a deal with guarantees based upon close to sell out figures. In the example above the guarantee would be more money, but the percentage break might not come until 950 tickets were sold. That’s how it works for the most part. How could this logic backfire you might ask? Well, if the shows don’t sell so well, the promoter might go bust – declare bankruptcy – then you just don’t get paid…
I think that is quite a long enough answer for part one. I’ll get to the next question asap.