National Live Entertainment (LYV 0.02%), the parent company of Ticketmaster and a leading live event arranger, is making dramatic changes to its boilerplate artist deals. Next year, when the concert circuit gets back on track, guaranteed artist payments will be 20% lower and the artist will bear a greater financial burden when an event is cancelled.
music magazines rolling stone and Billboard earned a memo sent by Live Nation to major talent agencies.
“We are going through unprecedented times and need to adequately consider changing market demand,” the memo begins, before outlining the market uncertainty that has been triggered by the COVID-19 pandemic. The company hopes to “renegotiate” several thousand shows that have been postponed to 2021, including several dozen music festivals.
“The changes could mean a fundamental shift in the business model, shifting far more risk to agents and artists while potentially leveling the playing field for independent promoters and festival owners as they struggle to recover,” continues the memo.
Selected policy changes
- Guaranteed payments will be 20% lower than guarantees granted in 2020.
- If poor ticket sales lead to the cancellation of a show, the artist will receive 25% of the guarantee. Industry standards require 100% guaranteed payment in these circumstances.
- Artists who cancel a show in breach of contract will owe the promoter double the expected fee.
Artists will also be required to contribute to promotional efforts through social media posts, and they agree that all events will be filmed “for use in a live television broadcast, live webcast, an on-demand streaming and/or live satellite radio show.”
The memo ends in a sorry tone:
“We are fully aware of the importance of these changes, and we have not made these changes without serious consideration.”
Anders Bylund has no position in the stocks mentioned. The Motley Fool owns shares and recommends Live Nation Entertainment. The Motley Fool has a disclosure policy.