In a leaked memo obtained by Rolling Stone, Live Nation revealed an array of changes to its contractual agreements with performers for 2021. These changes include reduced pay rates for artists as well as new guidelines for financial responsibility regarding canceled events.
These changes come as the live music industry works up to a crawl in terms of reopening as new coronavirus cases continue to grow across the country. For now, many of the concerts still going forward are confined to drive-ins, but these new contract terms will set the standard going forward.
Live Nation, the global ticketing and promotion giant, outlined several notable changes to its existing agreements with artists. Many of these changes were likely inspired by COVID-19, with one of the changes mentioning it directly. The new guidelines touch on topics such as guarantees, inability to fill venues to capacity, and an unprecedented change to policies regarding artist cancellations.
Under the new terms, artist guarantees (the money artists are assured to receive, regardless of turnout) will go down 20 percent from 2020 rates across the board. The financial effects will now hit artists harder than even when the gig economy is back up and running. Another change regards the financial burden for the cancellation of a concert due to poor ticket sales. Currently, promoters are expected to pay out 100 percent of the guarantee, but Live Nation now wants to drop that down to 25 percent of the guarantee.
One of the most eye-catching policy adjustments comes in regard to artist cancellations for festivals. Live Nation will now expect artists to repay the promoter two times their fee—essentially, a hefty fine—an alteration which Billboard states is “unheard of in the music industry.” Changes have also been made to cancellations due to force majeure, which Live Nation notes includes “a pandemic similar to Covid-19,” now stating that the venue will not pay the artist their fee and that the burden of obtaining cancellation insurance falls on the artist. Additionally, if a venue is restricted in its ability to fill to capacity, the promoter may cancel and expect a full refund of any money paid to the artist.
“We are fully aware of the significance of these changes,” the memo notes at the end. “And we did not make these changes without serious consideration.”
Read the full memo from Live Nation obtained by Rolling Stone below:
Live Nation Internal Memo
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.
[H/T Rolling Stone]