Live Nation Has Announced Alterations Considerably Increasing Financial Risks For Artists

Live Nation has announced alterations

Summer will be very quiet, there will not be any concert or festival this year, and it is already a heavy burden for all the bands that won’t be able to make money from touring. Isn’t touring the main source of revenue for most artists?
If the coronavirus crisis was not enough, artists will also have to face new decisions made by Live Nation, the country’s largest concert promoter. In a memo addressed to talent agencies and first obtained by Rolling Stone, Live Nation cites ‘unprecedented times,’ ‘a shift in market demand,’ and ‘the exponential rise of certain costs’ to justify their decision to bring ‘changes for 2021’ when concerts and festivals go back to their regular schedule if this ever happens.

Live Nation has shamelessly announced a series of alterations that will considerably increase the artists’ financial burdens. Here are a few points:

– The monetary guarantees promised to artists before an event will be decreased by 20%.

– In case of cancellation by the artist, ‘the artist will pay the promoter two times the artist’s fee,’ which seems totally outrageous. In case of cancellation due to poor ticket sales, the artist will receive 25% of the guarantee whereas, according to other sources, artists are currently expecting 100% of the guarantee. In case of cancellation due to an event comparable to the current pandemic, ‘the promoter will not pay the artist its fee.’

– Artists will have 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’. It’s not clear what any artist will receive from all this.

– Airfare and accommodations will be the responsibility of the artist, and the purchaser will retain 30 % of artist merchandise sales.

Everyone is aware that companies like Amazon are doing extremely well during this crisis, while Live Nation is losing money, there is not much they can do, their business is based on live events, which are not happening at the moment. But is it a reason to squeeze artists like lemons? Live Nation would not exist without their talents!

‘In order for us to move forward, we must make certain changes to our agreements with the artists,’ declared Live Nation… but are they aware that most artists were not able to move forward either during these hard times? It’s clear that the changes shift the financial risk from the promoter to artists and agencies, and where are they gonna find the money? How can Live Nation expect them to accept all these changes in policies without rebelling? ‘We are fully aware of the significance of these changes, and we did not make these changes without serious consideration,’ declared Live Nation as a conclusion of the memo. ‘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.’

Could it be the nail in the coffin of an already damaged music industry?

Here is the full memo sent by Live Nation 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 the artist’s 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 canceled 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 the 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.