In 2001, Billboard Boxscore reported that the top 100 music concerts of the year collectively generated $350m. In 2015, the top 25 concerts alone grossed just shy of $360m. There are two reasons behind this: more people are going to shows and ticket prices are spiking sharply.
Here is a topically illustrative example, given that their Joshua Tree 30th anniversary tour is the hottest ticket of the moment. In 2001, U2 had the ninth-biggest venue gross of the year in the US, collecting $6.4m from 78,275 tickets sold across four shows at the United Center in Chicago, with tickets priced at $45-$130. In 2015, they had the fourth-biggest gross of the year with $19.4m earned, playing eight shows to 149,942 people, with tickets at $30-$275. At the bottom end, some tickets were cheaper, but the band played more nights to twice as many people and made three times the money. Obviously, inflation has to be factored in, but the contrast between how they toured then and how they tour now is significant.
Of course, gross earnings are far from synonymous with profit. Acts touring today are not just swelling their own bank accounts; there are a lot of mouths to feed along the way. Fans paying $275 for a show might presume most of that is going straight to the band. But it really isn’t. So what, exactly, is your ticket price paying for?
The live industry is rarely keen to draw back the curtain to show its inner workings, so the Guardian spoke to a number of live music insiders who wished to remain anonymous. In doing so, they were able to speak candidly about where, exactly, the money goes.
There are no precise splits that apply in every case as it will depend on the band, the venue, the promoter, the marketing budget and tax laws, among other things. The following is intended only as a general guide to how your ticket price could break down and what it is going to pay for. Most of the things that have to be paid for will apply in almost every case. What will be different is how much they will be paid. And that includes the band members.
Peeling it back layer by layer, of your ticket price, around 10% is going to be swallowed up by a booking fee and processing fee (either posting the tickets or charging you for the “privilege” of printing them at home), with some of that actually working its way back to the band and their promoter.
You also have to take out taxes from that. In the US, about a 5% rate is applied to tickets, but it can be as high as 35% in some European countries due to the addition of “cultural taxes”. A small percentage of the gross – the monies left after transaction fees are deducted – will be collected and paid through, eventually, to songwriters in public performance royalties. The rate will depend on the venue size, but Ascap, which collects royalties, says on its website the figure can start at 0.8% and drop to 0.1% for venues with over 25,000 capacities. Again, as with taxes, there are higher deductions in Europe, with PRS for Music in the UK, for example, collecting 3% of the gross.
What is left – roughly 84% of the gross – then is carved up between the band and their promoter (who puts on and underwrites the show). But there are still more things to be paid for.
“Fixed expenses are many and various,” says one source, who drew on a spreadsheet for a recent arena tour for a major act they worked with before reeling off all the things that they had to account for. These included (deep breath): venue hire, stage hands, venue staff, electricians, power, spotlight hire, scaffolding, barriers, catering, public liability insurance (in case anyone is injured at the show), backstage furniture (yes, really), forklifts, rigging, medical staff, transport and even towels. Many times the venue will pay for that out of its cut, but that will depend on the particulars of the deal struck.
That can leave anything between 50% and 70% of the gross, but there are no hard and fast rules for how that is divided between the act and the promoter. A commonly quoted figure is that the promoter will take 15% of what is left and the act will get 85%. But it will depend on if the promoter really has to work to get the show to sell out or if they are pushing on an open door and demand is so high it sells out in seconds. In those instances, the promoter may get as little as 5%; but for arena shows charging $150 or more for tickets, that 5% quickly adds up.
Performers are often offered a guarantee, making the performance risk-free as they will be offered a set fee regardless of whether the show sells out, with the promoter shouldering any losses. In many cases, the performers will get a guaranteed minimum fee plus a percentage of anything made beyond that figure.
“In the case of a fixed fee, the promoter would guarantee the artist money and then the promoter gets anything above that,” says Steve Machin, CEO of Accent Media, the operator of the .tickets domain name space. “Or they might split the money with different percentages. So if it’s normally 80-20 after allowable costs, if the act gets a guarantee, then the split would be adjusted in favour of the promoter.”
The artist’s share then has to cover its own mini economy. The act will have their own crew (roadies, sound engineers, lighting crew, catering, tour manager, backing singers, extra musicians, dancers and so on) as well as transport trucks, with 30 articulated trucks on the road not being uncommon for the biggest shows. One huge act’s manager reportedly said it cost them $750,000 a day to be on the road, whether they were playing a show or not. Talking of which, don’t forget that the manager also needs their cut of the band’s share – normally 15%-20%.
Before any of that happens, rehearsal time has to be paid for as well as the design and build of stage sets. Not every band will have something as spectacular (and costly) as the Claw on U2’s 360° tour, but they can’t just show up and play to 80,000 people with a few lights and screens, hoping for the best.
“I often ask myself if the audience would rather have that amount of money spent on that kind of show or have a much cheaper ticket price to get into a reasonable-sized venue and watch the act playing,” says one source of the huge drain a spectacular show can have on profits. “That comes down to the act.”
The more money acts are going to make, it appears, the more ways they can find to spend it on expensive hotels, helicopters and ostentatious stage sets that – in less hubristic moments – they perhaps don’t need. Never underestimate ego and its ability to blow budgets out of the water.
“If you give an act loads of money, they’ll find a good way of spending it on the show,” says a source who has seen this happen time and again. “So it’s never going to be as profitable as people think and it’s never a case of all the money going straight into the band’s pockets.”
This is not a play to make us feel sympathy for poor stadium acts who are left destitute after an exhausting 300 shows around the world. Rather it is a timely reminder that – as in everything – money generated and profits made are never bedfellows. Indeed, they rarely even share the same zip code.
