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April 29, 2021

How the money works in a small show

gig in a small venueOR

There were 100 people at the gig and we only made £200 – WTF!?!…

Part 1 of 3 posts

The last show The Band did was in their home town. It sold 150 tickets for a fiver each. After they had shelled out for a few overheads, The Band pocketed £500 and went out and celebrated.

Full of promise they found an agent to book their shows. Their new agent sourced a promoter in a new city. The deal was £200 versus 80% after costs. They all went to school and learned about percentages. So The Band knew if they sold the tickets the dollar would rain down. Right?

For an agent taking on a new emerging band it is exciting – It’s a moment full of hope. Everyone is happy, or at least should be. Questions are answered and the agents “Terms Of Business” issued and signed (yes agents – it is required by law in the UK). Everyone is on a sure footing.

Gig day – The show happens, 100 tickets sold, they were £8 in advance, with about 30 sold on the door for a tenner. Great result £860 came in – it’s easy to work out. Another pay day. Right?

Wrong.

The following week the agent sent the settlement through. And the total fee was only the guaranteed £200 – WTF! – And this time there were more expenses. The Band lost money.

Not only that, the agent hasn’t charged their commission yet!

Oh dear – It’s not quite going as planned.

So how did this happen?

Here’s how:

THE SETTLEMENT

First of all the promoter was registered for VAT – this is the big killer for small shows. VAT is charged at 20% on the ticket price. To work that out, divide the income by 1.2 leaving a net income of £716.67

So £143.33 went to the VAT man straight away.*

Then off comes the PRS that’s probably 4.2% so £30.01

(did you pay that on that home town gig?)

That leaves £686.57

Then the rest of the costs – for example…

  • Venue Hire £200
  • Promoters Rep £100
  • Marketing £100
  • Catering £100
  • Support £100

That leaves £86.57 and the promoter still has to pay The Band £200, so the promoter has lost £113.43.

The agent, after all the work they did, earned around £30 for their agency. Which when you consider overheads and salaries, is a very real loss for the agency as well.

INVESTMENT

There is no escaping the sacrifice the agent and the promoter have to make to support the band. (Who is also making a financial sacrifice since they also have costs)

In this example we’re looking at a typical show run by a national promoter. Perhaps DHP, Crosstown, or Live Nation. Of course, if the act is any good, the agent should be able to source shows in a variety of different settings. Some will make more money than others. At this stage though, money is not the focus, the main challenge is to get The Band in front of an audience. The agent and the promoter are betting on the future.

When we at Midnight Mango book tours for emerging artists, we very much understand this. We book some shows with local promoters who’s costs are lower. Some shows with venues who can offer better deals than outside promoters. And of course we try to find options to avoid VAT. However there is a balance, we need national promoters to push The Band to the next level and also to save us time seeking available options.

Once The Band starts to sell more tickets and the ticket price goes up, the picture changes. But right now, when emerging talent starts with an agency – There simply isn’t enough money to go around!

*Right now in Covid, VAT on tickets is only 5%. It doesn’t take a genius to work out how helpful that is to the costs of a show. This is exactly why our fantastic industry is campaigning for that rate to continue through 2021.

Thoughts in the comments as ever!

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