Event promoter Live Nation has announced that they will be making sweeping changes to their artist agreement for the 2021 concert season.
A memo was sent out to talent agencies Wednesday (17) with the new measures, which affect how artists get paid, as well as shifting some of the financial burdens typically placed on the promoter onto the artists.
“The global pandemic has changed the world in recent months and with it the dynamics of the music industry,” begins the memo (obtained by Rolling Stone). “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.”
Those changes notably include decreasing monetary guarantees paid to artists by 20% of what those same guarantees were in 2020. Artists will also receive a 10% deposit one month before a show is slated to take place, given they comply with all other promotional responsibilities, with the balance given after that show takes place.
Also notable are the new rules surrounding cancelled shows. If a performance is cancelled due to low ticket sales, the artist will now get 25% of their fee, down from the original 100%. For a show cancelled in breach of their agreement, the artist must pay the promoter double the artist’s fee. If a show is cancelled due to unforeseen circumstances (such as a pandemic), artists will not get their fee at all. Artists need to have their own cancellation insurance for such cases.
“We are fully aware of the significance of these changes, and we did not make these changes without serious consideration,” the memo concludes. “We appreciate you – and all artists – understanding the need for us to make these changes in order to allow the festival business to continue not only for the artists and the producers, but also for the fans.”
These new rules did not come out of the blue. Back in May, Live Nation CEO Michael Rapino mentioned in his first-quarter earnings call that in the concert atmosphere of 2020 and 2021, the promoter can not bear all of the weight of cancelled shows. Rapino said at the time,
“The reality is, in ‘20 and ’21, the promoter can’t take all the risk on the business, as we historically have. We need to share some of that, especially refunds on the guarantees. So while we don’t want to get into the what and how of the deals, we absolutely are getting great latitude from the artists and agents to look at the traditional business of high guarantees and all of our risk, and to help share that risk, going into ‘20 and ’21, to get the shows back on the road and help us absorb it, and not take all of the [financial burden] of refunds, sales, sponsorship, food, beverages and unknowns for the next 6-12 months. They’re helping to share some of that risk to help us get back and scale fast, and not worry about losing money on the show.”
Artists are already reacting to Live Nation’s new policy. Exodus guitarist Gary Holt, for one, is not a fan, taking to Instagram Thursday to angrily lament on how these new rules will kill rock and metal:
“So live nation has decided life has been hard on them, so now they’re gonna pay artist 20 percent less, only pay 25% when a promoter cancels, versus the usual 100%, but if you cancel they want double your guarantee back. And 30% of your merch to go with it. This could be the final nail in the rock and metal coffin. That lost 20 percent now comes out of a bands merch, which they take a bigger cut of. Satan forbid you have to cancel a show due to illness. Swipe to see how much these people made last year and see if your heart bleeds for their lost revenue. Saw this posted by @robbflynn after reading it on @loudwire so I thought I’d check their finances. Lame.”
The full memo, which also talks about cancellation insurance, merchandise, airfare, sponsorships, streaming requirements and more, can be read here.
