How to Settle a Promoter Profit Deal

How to Settle a Promoter Profit Deal - Step by Step Guide

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Күн бұрын

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At the end of each show the artist settlement is usually the responsibility of the tour manager, tour accountant, artist manager, or the artist themselves. The Promoter Profit Deal is the most common type of deal that’s used by all major promoters. Below is a step by step guide on how to settle a promoter profit deal. In this video the terms are as follows:
Artist receives a $5,000.00 guarantee + 85% of Net after expenses, 6.5% state sales tax, and $1.00 per ticket Facility Fee (FF).
In this deal example the following tickets were sold:
500 tickets at $20.00
500 tickets at $25.00
Step 1: Add up all the ticket sales to find Gross Box Office Receipts (GBOR).
Step 2: Find the total facility fee. This is the total number of tickets sold multiplied by the total facility fee.
Equation: Gross Facility Fee = Facility Fee x Total Tickets Sold
Step 3: Subtract the Gross Facility Fee from the GBOR to find Adjusted Gross.
Equation: Adjusted Gross = GBOR - Gross Facility Fee
Step 4: Deduct State Sales Tax to find Net Box Office Receipts (NBOR). Remember that state sales tax is already included, therefore we have to calculate the inverse and add one in front of the decimal point. Ex. 6.5% state sales tax = 1.065
Equation: NBOR = Adjusted Gross / (State Sales Tax + 1)
*Note - If there is no adjustment, then use the GBOR
Step 5: Add up all your expenses. Remember that the guarantee is an expense.
Step 6: Calculate Promoter Profit Amount. Promoter Profit percentage is given in terms.
Equation: Promoter Profit (PP) = Total Expenses x Promoter Profit Percentage
Step 7: Calculate the Split Point. This is the amount that needs to be reached for there to be a bonus for the artist.
Equation: Split Point = NBOR - Total Expenses
Step 8: Calculate the share amount. This is the amount that’s left over after expenses and promoter profit that the artist and promoter share. The percentage the artist receives is the artist bonus, and is usually given in the terms. In this problem it’s 85%.
Equation: Share Amount = NBOR - Split Point
Step 9: Calculate the Artist Bonus Amount
Equation: Artist Bonus Amount = Share Amount x Artist Bonus Percentage
Step 10: Calculate the Total Artist Pay
Equation: Total Artist Pay = Guarantee + Bonus Amount
ABOUT CHRIS G.
Chris is the founder and Owner of ONE LIVE Music & Sports Entertainment. He’s been a concert promoter and Talent Buyer since 2006 when he created Rock for Hunger, which was an Orlando based Music Festival and Charity that ran for 5 years. From 2008 to 2012, Chris worked as the Senior Talent Buyer for The Plaza Live in Orlando, FL. After the Plaza Live he moved on to work work for House of Blues/Live Nation New Orleans as the Jr. Talent Buyer, where he worked under the mentorship of Sonny Schneidau, 2-Time Pollstar Live Talent Buyer of the Year and 20 Year Employee of HOB/Live Nation.
In January of 2015, Chris decided to start his own company (One Live Group) working as a concert promoter in Orlando, Tampa, Jacksonville, and New Orleans, producing the Orlando City Soccer Concert series, and managing/mentoring artists in the music industry. Later that year, he joined the Full Sail University Family working in the Music Business and Entertainment Business Programs. It’s his mission to share his experience and stories with students, and hopes to inspire the future leaders of the Entertainment World. In the Fall of 2016, Chris launched his own course focused on Artist Development in the Full Sail University Music Business Program.

Пікірлер: 35

@MrEzoperator 5 ай бұрын

These are great. I look forward to speaking wth you!

@madisontaylorz 4 жыл бұрын

Chris, all I can say is a huge THANK YOU for these “How to Settle” videos. There is nothing else like them on the internet and you go to such great lengths explaining everything, they have been so helpful. My boyfriend’s tour manager quit us two days ago (he wasn’t that great) and I want to make sure I understand the deals correctly. For now, I’d like to help them advance shows/settle until we are able to get a more permanent replacement. I would pay to take a course from you! I’ve started listening to your podcast as well.

@chrisgoyzueta 4 жыл бұрын

Hello Madison - sorry for the delay here. Thanks so much for the kind words. I'm planning to release a coaching course in May/June to teach about deals, promoting shows, and artist development. Stay tuned. Until then, let me know if there are any questions you have that I can help answer with some additional content.

7 жыл бұрын

Nice stuff

@maeo1630 3 жыл бұрын

CHRIS CHRIS THANK YOU SO MUCH. FROM UK

@madfacepromo12 3 жыл бұрын

thank you for this

@drummerhooper 2 жыл бұрын

thanks for the explaining this!

@chrisgoyzueta 2 жыл бұрын

Thanks for the note! Always looking for content ideas. Anything else you're looking to learn? What do you do in the industry?

@omarbagader8453 Жыл бұрын

I am using the info from this video to study for my final in a course that I am taking with Professor Chris! All I want to say is thank you for your efforts. It is a great honor to be taught by you and this was one of the most helpful classes that I took during school!

@chrisgoyzueta Жыл бұрын

Thank you so much for this kind note!!

@a.b.miamifl715 4 жыл бұрын

great video! Wow!!

@chrisgoyzueta 4 жыл бұрын

Thank you!! I appreciate you watching and the comment.

@3FlowRadio 2 жыл бұрын

Can you do a video on artist contracts 😃

@erictran3799 5 жыл бұрын

Hey Chris, thanks for putting these videos together! Really helps with understanding the math involved with settlements. Just wanted to ask, what does the settlement process actually look like after a show? Are you pulling up final ticket sales on a laptop, invoices/receipts on a spreadsheet, etc with the tour manager/accountant/or whoever is settling? Like the literal step by step process of what that looks like. No need to get too detailed if this is a loaded question. Thanks again!

@chrisgoyzueta 5 жыл бұрын

Eric - great question! This could be a good video I can expand on a little. The settlement process varies from the level of shows. But assuming you're a promoter or venue owner that wants to grow, you want to do things right from the start. You should have a settlement cover sheet that outlines all of your expenses and if possible have backups for each expense. You can have this on the cover sheet for a club show too (ex. 4 security guards x $75 each = $300). Then you want to include your box office audit from the actual ticketing provider (Ticketmaster, Hold My Ticket, Ticketweb, Eventbrite, AXS, etc.). The cover sheet should outline your tickets sold less any approved expenses, and if the artist made any overage (another word for backend). Then if you really want to do it like the pros, include an AdPack or at least offer a digital version that outlines on a cover sheet everything you spent on marketing, and then a backup of everything you did marketing wise. If you're on the artist side, you want a spreadsheet where you crosscheck the settlement with the venue. Real Tour accountants or tour managers trained by tour accountants will check every single bill/invoice, the audit, etc. It can be a pretty stressful process sometimes, but you should be all good if you have all your proper backups and you're fully prepped. A loaded question gets a loaded response. Lol. Hope this helps!

@erictran3799 5 жыл бұрын

@@chrisgoyzueta Wow, thanks for such a thorough response! This definitely helps get a better idea of what the settlement process looks like. Love what you're doing with this channel, I can always appreciate people that go out of their way to educate others, especially in this industry where resources for learning aren't that readily available unless you're already in the industry. Would love more videos that go into detail of the various parts of the booking process, like deal negotiations for example, although I'm sure there's a ton of nuance that differs from case to case as expected. I'm aspiring to work in live music myself so all your content is awesome!

@jpihcc9147 4 жыл бұрын

Tickets sold sales tax would be collected on the Gross ticket sales... not the adjusted gross correct?

@CharleyM 5 жыл бұрын

Howdy! Thanks for this video, so at the end, you calculated the total Artist Pay (AP) but what about that remaining 15%, does that go to the promoter as well? So the promoter makes their profit, but then also gets a 15% bonus with that split?

@chrisgoyzueta 5 жыл бұрын

Great question...that is correct. The promoter makes the promoter profit + 15% of the backend. Promoters also have the potential to earn additional ancillary income - ex. ticket rebates, venue rebates, share of facility fee, etc.

@melanievictor_realtor 5 жыл бұрын

In the House Nut you mentioned that it covers production, security etc. Why again do you have those things listed if it's already included in the house nut?

@chrisgoyzueta 4 жыл бұрын

Hello Mel - there are no set expenses the house nut covers. In general, it covers most of the in-house staff at the venue, and venue expenses, with the exception of anything production-related, since those are usually variable. Typically it's up to the venue/promoter to dictate what the "house nut" or "rent" covers. At some venues, it covers everything, except for marketing, production, hospitality, and any additional rentals needed. In this example, I threw in a bunch of other expenses for educational purposes to get people used to certain terms and types of expenses they'll see in a real-life scenario. Hope this helps, and let me know if you have any other questions. Thanks

@ejung16 5 жыл бұрын

Why does the promoter get a profit from the expenses? Is the definition of "promoter profit," profit off the venue expenses?

@Emmetgriffin9 Жыл бұрын

❤❤❤❤❤❤❤❤❤

@Tommy-eq8nz 4 жыл бұрын

the guarantee is only an expenses deducted from the NBOR for this specific deal, not GBOR, correct?

@chrisgoyzueta 4 жыл бұрын

Hello Tommy - great question. You are correct. When it's a promoter profit deal (or also called a plus deal), then the guarantee is an expense as well. it is not in a versus GBOR or versus NBOR deal. Are you doing this for a class, learning about promoting shows, planning to open a venue, etc.? Let me know if there are any topics you'd like to see videos or a blog post for. Always looking for great ideas to create more content. Thanks, for watching and your comment.

@Tommy-eq8nz 2 жыл бұрын

@@chrisgoyzueta Hi there! Sorry it has taken me a year to get back to this. I was interning at an agency before the pandemic and was brushing up on my experinces. Still working on getting back into the agency side of things.

@lissiz3432 5 жыл бұрын

how do they decide how high the guarantee is?

@chrisgoyzueta 5 жыл бұрын

They have to do a forecast or projection to figure out what the revenue potential will be based on sellout and based on what the promoter believes the artist will sell. They also look at all the expenses, and then determine what they can offer and still make some money. Also, the agents will dictate how much the artist gets or at least what the minimum or average guarantee is. Also, the guarantee can be driven up by competition. Ex. if you offer $5k, but the other promoter in town offers $6k, you need to figure out if it's worth offering more to get the show. It's hard to explain in one reply. Might be worth a video I can do.

@lissiz3432 5 жыл бұрын

@@chrisgoyzueta thanks for the reply. I'd love a video on that subject. is it true that big artists like Justin Bieber or Taylor Swift can get a guarantee up to $1 million?

@chrisgoyzueta 5 жыл бұрын

@@lissiz3432 that is true that . artists can earn $1 million for a performance and even more. However, some artists at the stadium level are also on percentage deals. Where they just make a percentage of all revenues, and can walk with millions.

@donjaco4363 6 жыл бұрын

The left over 15% after the artist get 85% goes to promoter?

@chrisgoyzueta 6 жыл бұрын

Jacob - great question! The 15% left over goes to the promoter in this deal. So, they make the 15% left over, and the 15% promoter profit. A bonus at the end for both the promoter and artist. Just the artist gets the lion share of that. Hope that helps. Thanks

@donjaco4363 6 жыл бұрын

for sure - that's what I thought. thanks!

@donjaco4363 6 жыл бұрын

also, insanely helpful videos!

@chrisgoyzueta 6 жыл бұрын

Thank you!! Are you a promoter or artist? Keep in touch. Hit me up anytime. Hope to have many more videos coming this year.