The situation continues to look bleak for the concert behemoth.
By David Icke Turner
In an utterly predictable turn of events, North America’s largest concert promoter has decided to cut artists guarantees for 2021 performances. Rolling Stone recently got a hold of a memo where Live Nation has made a sweeping array of cuts and addendums to its near future performance contracts.
These are not artist friendly changes.
The company has decided to cut performance guarantees 20% for all shows. In an industry where artists increasingly depend on performance fees to generate revenue, this is more than problematic. The last decade has seen a precipitous drop in money made by artists via record sales and publishing.
Adding insult to injury, Live Nation has stated that shows cancelled due to low ticket sales will result in artists only receiving 25% of their already reduced fees. This goes against all established canon in the concert industry. That is why they call it a ‘guarantee.’
It gets worse. If a performer cancels a show and Live Nation deems it a breach of the contract, the artist will owe the concert giant DOUBLE the agreed fee. According to Billboard, this is a ‘punitive damage’ never seen before.
To their credit, Live Nation is feigning remorse in the most authentic way a corporate leviathan that is owned at 10% by a human rights abusing, theocratic regime — Saudi Arabia can do.
“ We are fully aware of the significance of these changes, and we did not make these changes without serious consideration” said Live Nation. The company has not answered any requests for interview or clarification.
Some of the below memo is boiler-plate language for a Live Nation contract; even before Coronavirus yet other portions make clear the company is in distress:
Live Nation Memo to Talent Agencies
The global pandemic has changed the world in recent months and with it the dynamics of the music industry. We are in unprecedented times and must adequately account for the shift in market demand, the exponential rise of certain costs and the overall increase of uncertainty that materially affects our mission. In order for us to move forward, we must make certain changes to our agreements with the artists. The principle changes for 2021 are outlined below.
Artist Guarantees: Artist guarantees will be adjusted downward 20% from 2020 levels.
Ticket Prices: Ticket prices are set by the promoter, at the promoter’s sole discretion, and are subject to change.
Payment Terms: Artists will receive a deposit of 10% one month before the festival, contingent on an executed agreement and fulfillment of marketing responsibilities. The balance, minus standard deductions for taxes and production costs, will be paid after the performance.
Minimum Marketing Requirements: All artists will be required to assist in marketing of the festival through minimum social media posting requirements outlined in artist offer.
Streaming requirements: All artists will be required to allow their performance to be filmed by the festival for use in a live television broadcast, a live webcast, on-demand streaming, and/or live satellite radio broadcast.
Billing: All decisions regarding “festival billing” are at the sole discretion of the promoter.
Merchandise: Purchaser will retain 30 % of Artist merchandise sales and send 70% to the artist within two weeks following the Festival.
Airfare and Accommodations: These expenses will be the responsibility of the artist.
Sponsorship: The promoter controls all sponsorship at the festival without any restrictions, and artists may not promote brands onstage or in its productions.
Radius Clause. Violation of a radius clause without the festival’s prior authorization in writing will, at the festival’s sole discretion, result in either a reduction of the artist fee or the removal of the artist from the event, with any pre-event deposits returned to the festival immediately.
Insurance: The artist is required to maintain its own cancellation insurance as the promoter is not responsible for the artist fee in the event of a cancellation of the festival due to weather or a force majeure.
Cancellation by Artist: If an artist cancels its performance in breach of the agreement, the artist will pay the promoter two times the artist’s fee.
Cancellation Due to Poor Sales. If a show is cancelled due to poor ticket sales, the artist will receive 25% of the guarantee.
Force Majeure: If the artist’s performance is canceled due to an event of force majeure – including a pandemic similar to Covid-19 – the promoter will not pay the artist it’s fee. The artist is responsible for obtaining any cancellation insurance for its performance.
Inability to Use Full Capacity of the Venue: If the promoter – either because of orders of the venue or any governmental entity – is not permitted to use the full capacity of the venue, then the promoter may terminate the agreement, and the artist will refund any money previously paid.
WTF happens now?
Whether these changes will be agreed to by William Morris Endeavor, Paradigm, CAA, or any of the other agencies is to be seen. Word on the street is that agencies are desperately encouraging their artists to not take fees lower than usual as that would equate to a comprehensive re-alignment of the industry. Yet you have to imagine the multitude of artists out there that took the gravy train for granted, spent their money like robber-barons for the last 2 decades, and have been caught hamstrung by the sudden marked decrease in their revenues. If you are a touring artist and don’t have a tennis shoe contract right now, you might be fucked.
These contractual changes when seen alongside Live Nation’s recent selling of 800 million dollars in debt, their recent stock plunge, and selling of tickets to festivals they know they will cancel are indicative of an empire on the precipice of decline. Or even demise. Sounds kind alike America. <3
Take Live Nation out of this for the moment. They already have some of the best terms in the industry. Think of the other, less well resourced promoters…
Sure, record companies and rights holders were surprised by the internet and thus their main revenue generator is now from live, and this leads to every promoter being squeezed. For a number of years now we have seen a double digit growth in artist fees year in, year out. I’m seeing 15%-20% talent increases annually at music festivals – this is simply unsustainable. I’ve seen veteran promoters wiped out when one hot act transpired to be the Emperor’s New Clothes. It’s painful handing over tens of thousands of dollars to an artist who couldn’t sell enough tickets – where it the sense of being ‘in this together’?
Sometimes people blame the promoter for this, and perhaps sometimes they could be at fault. But what recompense when you pay top dollar for an artist because their agent assures you they will have an album out prior to your festival or tour, and then the album is pushed back?
If all goes well, promoters take a slightly higher cut than the agents – but they burden the risk as well, and have to run the show as well as market it. There’s an unfair balance of responsibility and risk.
There does need to be a tempering of expectations from the artists. I’d recommend speaking to other non-LN promoters and seeing what a state the industry was in prior to the pandemic. It wasn’t healthy.