Live Nation Has Reportedly Notified Artists of Financial Changes for Shows
Written by SOURCE on June 18, 2020
As the country grapples with economic disruption caused by the coronavirus pandemic, questions remain about how the live music industry will move forward following the unprecedented crisis. On Wednesday, Rolling Stone published an internal Live Nation memo that outlines a proposed business model that will shift more of the financial burdens to artists and agents.
Live Nation states that come 2021, monetary guarantees for artists “will be adjusted downward 20% from 2020 levels.” The company also wants to change longstanding practices in respect to event cancellations, a move that could cost an artist thousands of dollars, but potentially save the promoter millions per year. Live Nation says that if a live show is canceled because of poor ticket sales, the artist will receive only 25 percent of the guarantee. As it currently stands, prompters are expected to pay the full guarantee in these instances. Furthermore, if a concert is canceled because the artist breaches the agreement, the act is required to “pay the promoter two times the artist’s fee.”
As Billboard points out, this stipulation “is unprecedented in live music,” though some independent promoters are understandably on board with the move, as they believe the current model puts them at a disadvantage: “If I have to cancel my festival, for whatever reason, I am expected to pay artists in full even if they didn’t help me sell a single ticket, and that’s not fair.”
“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,” the Live Nation memo reads. “In order for us to move forward, we must make certain changes to our agreements with the artists.”
Another proposal in the memo outlines that the artist and not the promoter will be responsive for obtaining cancellation insurance. According to the memo, “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.”
“Everyone has lost money this year — and that includes Live Nation and every other promoter,” tour director Christian Coffey said, per Billboard. “Those losses were going to change how business was done and I think everyone was waiting to see it on paper.”
The memo, which you can read in full over at Rolling Stone, closes out by acknowledging that the changes are significant and that they “did not make” them “without serious consideration.” It continues, “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.”
