According to Rolling Stone, Live Nation’s controversial memo levels the playing field between artists and promoters, while also forcing talent to carry a heavier financial burden for the shows they play.
As the music industry slowly begins adjusting to “the new normal,” artists and promoters alike are making changes to the way they conduct business. In keeping with this, Live Nation recently circulated a memo to all talent agencies outlining their policy changes for 2021.
Most of these changes, including guarantees, merchandising, travel expenses, and cancellations, come at the expense of the artists.
The most notable adjustments in Live Nation’s controversial memo include:
- Artists take a 20 percent pay cut for all shows moving forward
- Artists that cancel a performance in breach of their contract must pay the promoter two times their artist fee
- If a promoter cannot fill a venue to capacity, they may cancel the show and the artist must refund their payment
- If a show is cancelled due to unforeseeable circumstances (like a pandemic), the promoter will not pay the artist
However, these changes can bring unforeseen consequences to the industry as well. Newer festivals may have difficulty breaking into the market, as artists will be hesitant to sign on with them. On the other hand, agents of highly-sought-after talent may push for more freedom in choosing artist lineups as well.
Despite the pushback from artists and managers alike, Live Nation seems to take all of this in stride. “We are fully aware of the significance of these changes, and we did not make these changes without serious consideration,” states the company in its memo.
Read Live Nation’s Controversial Memo in Full Below
“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.”