Ahhhh, settlement. Sometimes you’ll see “must have experience settling” on a TM job post. What does that mean? A touring artist is a mobile business, and knowing the ins and outs of a deal is incredibly important to ensure that: 1) your artist is paid what’s actually owed to them, and 2) you don’t have to go back to management with a check that’s missing zeros and a confused look on your face. The show isn’t truly over until it’s been settled.
There are a billion steps between a booking agent making an offer for an artist to play and actually being paid for the performance. As a TM, most of those steps don’t involve you, but you will need to understand some basic contractual terms to make sure your artist is paid correctly.
How do you know what your artist is supposed to get paid? You ask management or the artist's agent for contracts between the artist and the promoter. Sometimes they’ll send you something called a deal memo. Deal memos are a vague outline of what might have been agreed upon but don’t really hold any weight. You want a scan of a contract signed by the promoter and an artist representative. It’ll probably be a contract with a bunch of stuff crossed out and notes all over it about what is or isn’t actually agreed upon. It’s very important that you go into settlement with a signed contract in hand, not just a deal memo.
Unless a show is completely sold out, you’ll most likely have to wait until the venue’s box office is closed to settle. That’s usually around three-quarters of the way through the show. If a deposit has been paid and the venue or promoter is well-known within the industry, there’s nothing wrong with waiting until after the show to settle. You really don't ever want to leave a show unsettled if possible. I’ve only left a venue without being paid a handful of times, and it never felt right.
To settle, you will physically walk into the venue’s office with a promoter or a promoter rep, sit down, and both of you will go over the contract and show expenses. Then, they will either give you a check or confirm your artist’s banking details to send payment electronically via ACH or wire transfer. Every venue has a different settlement sheet with all the details of the show. Some settlement sheets are pretty simple to read (like the example in the link below), and some settlement sheets make absolutely no sense to anyone other than the person who created them and make my head hurt. The info is there, but in a very convoluted way. I usually say something like, “Explain this sheet to me like I’m 12 years old,” and listen until I hear something that doesn’t sound right. Have the promoter email you a scanned copy of the settlement sheet signed and dated by both of you and send it to management before you go to bed that night. If you don’t understand something or are confused, write an email to management that night explaining what happened and asking for clarification. Even better, make friends with a TM who's been at it for a while and text them.
Some Common Deal Types:
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Straight Guarantees: No matter how many people attend the show, your artist will be paid a set amount.
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Guarantees with Overages: Your artist will get a set amount plus a percentage of overages after the venue’s expenses have been covered. For example, 85/15. This means your artist will get their guarantee plus 85% of the gross box office after all the venue’s expenses are covered.
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Door Split: There is no guaranteed amount. Your artist gets paid a percentage of the money made at the door. Let’s say it’s an 80/20 split. If the door makes $100, your artist will make $80, and the venue will make $20.
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Bonuses: Sometimes your artist will get a bonus if a certain amount of tickets are sold. For example, a $2500 bonus for selling more than 2000 tickets, plus $1000 for every additional 500 tickets sold.
The types of deals are endless and totally depend on your artist, your artist’s booking agent, and everyone’s relationship with the promoter.
Expenses:
Let’s touch on venue expenses a little bit, but not too much. These can fluctuate depending on the night, the venue, and the artist. It costs money just to have a venue open—staff, insurance, ASCAP & BMI (music licensing—Google it), artist catering, credit card fees for ticket sales, etc. All of these expenses are estimated during the contractual stage. Expenses are usually inflated to ensure everything is covered, but either way, it’s up to the show to generate enough revenue to pay these expenses so the venue can run efficiently. A tour is usually at the mercy of the venue or promoter when it comes to these numbers, but sometimes there’s wiggle room to move this allotted money around to ensure everything is covered and no one is losing money unnecessarily. For example, the promoter budgeted $500 for a runner, but you won’t need a runner. You could politely ask that the $500 be allocated to a monitor engineer instead. Be nice, be reasonable.
Terminology:
Heads Up: Not a lot of terms in this industry are set in stone. Some people have different definitions and use different terms. Use this as a guideline.
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Going into Points: Saying the show went into points means all venue expenses have been covered by ticket sales, and you will now receive a percentage of any extra box office revenue.
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Split Point: The split point is the total amount that needs to be made in ticket sales before you go into points. Artist guarantee + venue expenses = split point.
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Overages: An overage is the amount of the split point your artist will receive. For example, in an 85/15 split, the overage is the 85%.
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Drop Count: This is the number of people who actually scanned tickets into the show. If a show sells 100 tickets, but only 60 people show up, the drop count is 60. This is an important number to give to the merch sellers you tour with every night.
Sometimes showing you is the best way to explain things. Check out the link below.
Example of a Settlement Sheet with Some Notes
Settlement is yet another part of TMing that requires an immense amount of attention to detail. The most important thing is to have as much correct information about the contract as possible when you walk in to settle. Go over the contract before load-in, reread it as many times as needed throughout the day, and have it on your laptop screen ready to review as you're in the process of settling. It’ll all make sense.
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1 comment
Well done.