Live Nation Attempting to Shift Financial Burdens to Artists

It’s no secret that Live Nation are having a rough 2020 (as though things have been so easy-breezy for everyone else). The coronavirus pandemic hit the company hard, with the live events promotion behemoth reporting a 21% decline in revenues and a $172 million loss for the first quarter of 2020, according to Billboard. And it’s a safe assumption that Q2 will be even worse, despite the company furloughing 20% of its staff (roughly 2,100 employees).

Now Rolling Stone has obtained a memo Live Nation recently sent to talent agencies — i.e., the people who represent the artists — in which they make it clear that they’re attempting to shift the financial burden brought on by the COVID-19 pandemic to the artists.

Amongst the proposals made in the memo:

• Artist guarantees will be adjusted downward 20% from 2020 levels.
• Artists are required to have their its own cancellation insurance, because…
• Live Nation will NOT pat the artists its fee if an event is canceled due to an event of force majeure “including a pandemic similar to COVID-19.”
• If a show is cancelled due to poor ticket sales, the artist will receive 25% of their guarantee, NOT the full 100% they are usually paid (which is why they’re called “guarantees,” duh).
• If the artist cancels the show, they have to pay Live Nation twice the amount of their fee.

That last one, by the way, is “unheard of in the music industry.” Other clauses detailed in the memo, such as Live Nation getting a substantial cut of merch sales, are de rigeur.

These changes likely won’t have much impact on larger bands, but they’ll most certainly hit medium and smaller artists (i.e. 99% of all professional musicians) much harder. Touring is ALREADY a massive financial risk for bands, despite paradoxically being their best chance of actually earning a living. Throwing all these new conditions out there will likely deter a certain percentage of artists from going back on the road, because financially, it won’t be feasible or it simply won’t be worth it for them to take the gamble.

You can read the entire memo below.

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 its 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 artist will refund any money previously paid.

We are fully aware of the significance of these changes, and we did not make these changes without serious consideration. 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.

[via Metal Injection]