SIXTH CLASS - Concert and Club Appearances; Role of the Promoter and Booking Agencies; Merchandising
CONCERT AND CLUB APPEARANCES
A. Written Performance Agreements: Why Do We Need Them?
As mentioned earlier, “Handshake” deals are undependable. One person remembers the deal one way and the other recalls it differently. Key factors are often not covered. Once the Artist shows up, it is often too late to do much about misunderstandings.
B. Getting the dates is the hard part. The contracting is fairly simple.
Regardless of whether the group approaches the venue, or the venue or promoter approaches the Artist or its booking agent, a contract should be sent by the Artist or Booking Agent to the promoter or venue and not the other way around. If the Artist is represented by a Booking Agency, it is part of their job to get the contract signed. If the Artist is unrepresented, they should have their own contract form and send it to the promoter or venue. If the Artist has a Manager, it will be the Manager’s job to see that the contract is finalized.
The contract will always include an attached “Rider”. The Rider contains all the specific things that the group wants at the concert from staging, sound, lights, musical instruments and security needs to backstage food.
C. Here is a Checklist of Important Contract terms in a Live Performance Agreement:
1. Identity of club owner or promoter; All contact information for promoter and key employees
2. Names of any opening acts
3. Name, location, address, seating capacity and phone number of venue
4. Ticket prices and scaling
5. 21 and over or all ages?
6. Dates, times, and number of performances
7. Artist and traveling band member’s names and contact information
8. Amount of compensation (U.S. dollars)
Types of concert fee arrangements
(1) flat fee guarantee
(2) percentage of the door
(3) flat fee plus formula for bonus
A typical formula might call for payment of a percentage of net profit. The net profit will be based on the gross income less the promoter’s costs plus a reasonable promoter’s profit. The promoter will often give the group up to 70% of the monies collected after deduction of this “breakeven” figure.
9. Structure of the payment of compensation
(1) Typically 50% deposit is due upon time of signing contract
(2) Balance is due in cash BEFORE artist performs. Otherwise, Artist might perform and never get paid, which often happens.
10. Travel and accommodation
(1) number and class of airline tickets,
(2) number of rooms and class of hotel
(3) meals are generally not included (except backstage food). However, sometimes promoter pays a “buyout fee” for meals not provided.
11. Number of sets to be played and Length of time of each set
12. Sound check time
13. Right to sell Artist Merchandise at venue
(at times a percentage of gross sales in the area of 15%- 30% has to be paid to the venue)
14. Insurance for liability (usually promoter’s responsibility)
D. Here are some of the typical term found in Artist “Riders”
1. equipment to be provided by promoter
(very important)
i.e. turntables, microphones, sound, lights
musical instruments (back line gear)
2. back stage food and drinks, towels, water etc.
3. amount of security required
4. webcasting, videotaping and photograph prohibitions
(note, when dealing with webcasting or videotaping, a separate agreement is required with the artist; also with mobile phones, enforcement of the artist's ban on photography is virtually impossible to enforce )
E. What happens if gig does not take place?
1. Due to artist's fault?
Usually artist agrees to play another date at a fee that is reduced to cover the additional advertising and any other duplicate expenses.
2. Due to promoter's fault?
Promoter forfeits deposit paid to Artist
3. Act of god? Ie. Weather, earthquake, fire, riot, war
Both parties are usually excused from liability
F. Foreign Shows:
1. Concerts in other countries usually require the advance application for and issuance of a work visas. However, relatively unknown artists can go into a country on a tourist visa and perform without usually coming to the attention of the authorities.
2. Whether applying for a work visa or tourist visa, criminal records of the applicant can be a barrier to entry.
1. Promoter responsibilities include obtaining the work permit.
4. Foreign countries often are very aggressive in taxing income earned by Artists. It is wise to research any tax issues before finalizing the concert agreement. It may be possible to require the promoter to pay the taxes so that the performer gets a guaranteed amount without deduction of any taxes.
G. National Major Artist Tours: Key Points
1. Opening Acts: can be either the same bands which open each night and tour together or different bands in each location. Major act has approval rights over all other bands on the bill. Major act will have the right to be the “closing” artist. Opening artist if unknown will earn little money but do it for exposure. Record Companies will often pay expenses or ‘tour support’ to enable artist to tour if earnings are insufficient to pay travel costs.
2. Tour Promoters: If there is one major tour promoter for the entire tour, that promoter may either hire halls and advertise in each city of the tour or contact local promoters for certain cities and work out profit sharing arrangements with those promoters. The local promoter will advertise, hire the hall, and handle ticket sales.
3. Tour accountants: Specialized accountants that handle all aspects of income and payments on the tour.
4. Guarantees vs. Percentages: Usually Artists are paid specific nightly guarantees but occasionally super star acts like the Rolling Stones will take 80 or 90% of the income after certain allowable expenses. In other words, the promoter is simply working for them on a percentage of the net profits basis.
5. Deposits: Usually 50% of the guarantees are due and payable upon signing the contracts before the tour commences. Often for major tours, the Artists will negotiate the release of certain amounts of the deposits to cover the pre-tour expenses of rehearsal and prop fabrication. This is a tricky area as it can expose the promoter to loss if the tour does not take place.
6. Sound and Lights: When playing large halls and arenas, the artists bring in their own equipment. This cost is usually an expense that the promoter bears and is negotiated on a per concert basis.
7. Backline Gear: It is increasingly common for major touring artists to insist that the promoter rent instruments for their bands rather than the band having to cart around all this equipment themselves. This gear is called “Backline Gear” and will be listed as part of the artist’s rider. The promoter has to be sure to evaluate the cost of the equipment when negotiating with the artist for the concert fee since these costs will impact the net profits that the promoter may expect.
8. Road Managers: hired by the Band to make sure they get from concert to concert on time and in one piece. Usually they also collect the money and keep the manager and booking agent informed as to what is happening at the gigs. They are paid a weekly fee on anywhere from $500 to $2,000 a week.
9. Blackout dates: before and after the performance, the artist usually agrees not to perform within a certain geographical area and so many days before and after the show to preserve the audience demand.
10. Options to promote in the future; occasionally you will see a promoter try to exact such a promise in order to lock in an artist to a future date in their area at a given price.
TALENT AGENTS
A. A “Talent Agent” in California is the same thing as a ‘Booking Agent’, i.e. a professional person or company who represents the Artist for the purpose of finding employment, usually live appearances. California State Licensing law requires anyone who undertakes to find employment for another person to be a licensed Talent Agent, however, many Managers routinely perform this function without a license. The California Talent Agencies Act, which is administered by the California Labor Commissioner, sets forth all the requirements which are outlined below:
1. Fill out the Labor Commissioner application form for the license
2. Post $50,000 bond
3. Be fingerprinted
4. Submit their agency-artist contract to the Labor Commissioner’s office for approval which obligates the Agent to find engagements for the artist. Labor Commissioner normally requires insertion of a clause allowing artist to get out of the contract if no engagements found during certain period of time
5. Labor Commissioner will approve agency commission between 10-20% of the gross
6. If a dispute arises with the Agent, Artist can go to arbitration before the labor commissioner
B. Booking Artists Without a License in California
Unlicensed Booking by Managers:
1. Unlicensed booking is done all the time, usually by the manager of the artist. If the artist does it on his or her own behalf, that is not a violation of the act. If anyone else, such as a personal manager, tries to secure employment for the artist, that is a violation.
2. If an Artist wants to terminate the management agreement with his manager, and the manager has booked the artist without a license, the Artist often brings an action against the Manager with the Labor Commissioner. If the Artist wins, they can get a return of all commissions paid and a termination of the Management Agreement.
3. How does a manager protect herself? They can get a Talent Agent’s license and not require the artist to sign a contract with him as a talent agent, but just as a manager. That license will protect them from any claims that they performed unlicensed employment services.
Booking by Clubs and Their Agents
1. It is quite common for individuals representing clubs to book artists for those venues. This is not an activity that the Talent Agency act is intended to govern since they are representing the BUYERS of talent in the transaction, and not the Artists themselves. Therefore, these individuals do not require licenses. If these individuals were to ‘switch roles’, and offer to find employment for these artists and charge a fee for doing so, then they would be subject to the licensing requirements of the act.
C. What do talent agencies do?
1. Book tours and individual dates for their clients
2. Maintain contacts with promoters and venues; protect clients from shaky promoters
3. Sign acts that have record deals while their record is hot
4. Negotiate the best possible terms for the Artist’s compensation and issue contracts between artist and promoter; collect deposits from promoters and pay the artist
5. Package and book national tours
D. Agreements between Artists and Talent Agencies
Some are exclusive for one to three years. Where contract is exclusive, artist should have an escape clause if agency is not getting artist any work. Non exclusive agreements are even better from the Artist’s point of view, but the Agency may not have as much incentive to develop the act's touring career. Currently, we are seeing fewer exclusive written agreements with Agencies, and an increase in oral agreements where the Agency simply contacts the Artist when they have work for them.
E. New Artists and Talent Agencies
It is almost impossible to get a talent agent interested in a new artist without a record deal or extensive pre-existing public reputation. They can’t book artists unless the public is already aware of them for the most part. It is usually not the job of the talent agency to "break" a new artist, but rather to capitalize on their popularity once they are known.
MERCHANDISING IN THE MUSIC INDUSTRY:
A. Merchandising
in the music industry refers to the manufacture and sale of merchandise bearing
the name and likeness of the Artist. Properly exploited, a musical Artist who
performs regularly and has compelling merchandise can increase their earnings
by 50% more than they would earn from concert fees alone. Legally, the Artist controls the right to use
his name and logo in connection with sale of goods unless he has assigned it to
another party. Record companies often
try to get exclusive rights to merchandising but it is not a good idea from the
Artist’s perspective. Here's why:
1.
The label will want 50% of the net profit
2. The label will apply the Artist’s merchandising income toward the recoupment of the Artist’s recording expenses. The Artist may never recoup and therefore may never see any merchandising income
3. The label may never actually produce and sell any merchandise
2. The label will apply the Artist’s merchandising income toward the recoupment of the Artist’s recording expenses. The Artist may never recoup and therefore may never see any merchandising income
3. The label may never actually produce and sell any merchandise
B. Nationally
famous Artists:
Major
artists typically license their merchandising rights to Tour Merchandising
companies for each tour. The contract with the Tour Merchandising company calls
for an advance to be paid up front to the Artist and they will manufacture and
sell the Artist-approved merchandise at each concert. Royalties earned will go
first to recoup the advance, and then will be paid to the Artist.
C. Lesser Known
Artists
If an
Artist is not well known, they should srtill design and create their own
merchandise to sell at live gigs and through their website. Here are things the
Artist should consider:
1. Artists
must front manufacturing and design costs
2. Artists
can realize great profit by selling t-shirts for $20 while paying $4.00 for the
shirt. Artists can sometimes make more selling merchandise that the gig pays
3. Selling
the merchandise on tour requires considering the logistics of how it is to be
transported and who is going to set up and run the merchandise table
4. Types
of Merchandise are limited only by the imagination; everything from hats,
t-shirts, posters, sweatshirts, to wine bottles
5. Venues control sale of merchandise on their property and often charge a percentage of sales equal to 15-30% of the gross
If unauthorized merchandise is sold, there are legal remedies: copyright infringement, if copyrighted image used without authorization. Also for unauthorized use of artist's name and likeness without their written consent (California Civil Code Section 3344); Lastly for a US registered trademarked name, there are remedies for violation of their exclusive federal trademark rights.
CORPORATE SPONSORSHIP AND MUSICAL ARTISTS
The youth market is a valuable demographic for many companies trying to establish their reputation and acceptance of products and services. A key approach to the youth market is through the medium of music, not only as an accompaniment to their advertisements through the media, but also by reaching the music fans of artists who fit within their target market.
Companies selling everything from cars to energy drinks have formed strategic alliances where the artist lends the use of their name for the benefit of the company and their goods and services. Such arrangements fall into the following categories:
1. Endorsement deals for money
These are for the higher tier artists, such as 50 Cent who endorsed Vitamin Water. They require the participation of the artist in advertisements and personal appearances and run for a specific period of time. Behavior that is publicly reprehensible can be ground for termination of the agreement.
2. Endorsement deals for product
For many independent artists with some visibility, companies will seek to provide clothing and products (snow boards, etc) to key artists and have them photographed wearing or using the items to use in their marketing campaigns. No money is typically exchanged in these deals.
3. Tour Sponsorship Deals
Tour sponsorship deals can be very lucrative depending on the size of the company and the stature of the artist. Typically the representative of the artist approaches various companies months prior to the tour. There are specialized agents who have relationships with advertisers and artists who will pitch a tour to the advertiser in exchange for a percentage of any sponsorship deals obtained.
Once obtained, there will be a sponsorship agreement that outlines the obligations of the sponsor and the artist. The payment will be stated. It is usually based upon the number of performances. The size of the payment is generally related to the number of anticipated persons who will attend, but once agreed, the fee is not reduced if less than the expected number of fans actually shows up.
Artist agrees to perform in the agreed venues, to display the sponsor’s banner, hand out agreed advertising materials, and photograph the events so that the Sponsor knows that its advertising materials were utilized as required.
There may be a requirement for a certain number of complimentary tickets for the Sponsor. In some cities, the artist may need to make additional personal appearances at company locations.
At the end of the tour, the artist provides proof of the employment of the sponsorship materials at the agreed concerts. The Sponsor then pays the agreed fees to the artist.
