Common Deal Structures For Touring Groups


By: Joe Patti

In: Arts Admin, Contracts, Legal

When it comes to paying touring performers, there are all sorts of deal that can be made. The payment terms on those deals can get pretty confusing. There are a number of resources available online that explain these agreements. One of the best I have found is a blog post on the site Making It With Chris G.

Chris Goyzueta addresses a number of common deal structures and creates a YouTube video running through how each example is figured out. The numbers and examples are somewhat geared toward musicians playing smaller theaters, bars and clubs, but the approach is the same when dealing with larger touring artists or Broadway shows.

As a quick run down of the type of deals that might be negotiated:

Guarantee – artist gets a guaranteed amount. A basic deal.

Percentage of Net Deal – artist gets whatever is left of admission sales after expenses

Guarantee Plus Bonus -artist gets a guaranteed amount plus a bonus at certain milestones in number of tickets sold (usually based on number of tickets sold, not revenue milestones)

Guarantee Versus Percentage of Gross Deal (NBOR) – also known as a versus deal, artist gets the greater of a guarantee or a percentage of the Gross with only sales tax and perhaps facility and credit card fees subtracted.  (Example: $2000 Guarantee vs 65% of gross and the show makes $7500 after taxes, artist would take home $4875 instead of $2000). Obviously, you can also work out a deal where specific expenses are allowed to be deducted.

Guarantee Plus Percentage Deal – This one is a little more complicated. In this case, the artist fee and other production expenses are deducted before the negotiated percentage is applied. While Goyzueta does a good job of laying how to calculate this step by step, I wanted to provide a slightly more detailed visual example as an illustration.

A slight variation of this deals allows for promoter profit, typically 15% of the fixed and variable expenses. I have included that in the example below. This would be removed in a deal that doesn’t allow for that.

An important thing to note in this arrangement is the split point which is why I labeled it in red. That is the amount of revenue that needs to be reached before the artist begins to see any payment above the $25,000 guarantee. In this example, the potential gross if the show is sold out is $71,500.

The split point, including promoter profit, is 70% of the potential gross so the show has to reach about 70% capacity before the artist sees additional revenue. The artist and agent may feel this is a likely scenario and accept this arrangement.

One thing to remember though, is that if the promoter or artist has friends they want to let into the show for free, that will reduce the potential revenue. Giving away 20 seats @ $75 to friends and 8 seats in the VIP section for radio promotions takes $2500 out of the potential revenue right from the start which makes it more difficult to reach the split point.

It is important to factor those things into the initial gross revenue projections when structuring a deal. I left those calculations out of the example in order to prevent things from getting too confusing for those new to these arrangements.

Joe Patti
Joe Patti
In addition to writing for ArtHacker, I have been writing the blog, Butts in the Seats ( since 2004. I am also an evangelist for the effort to Build Public Will For Arts and Culture being helmed by Arts Midwest and the Metropolitan Group. ( I am currently the Theater Manager for the Rialto Theater in Loveland, CO. Across my career I have worked as the Executive Director at The Grand Opera House in Macon, GA, at University of Hawaii-Leeward Community College, University of Central Florida, Asolo Theater, Utah Shakespearean Festival, Appel Farm Arts and Music Center and numerous other places both defunct and funky.
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2 thoughts on “Common Deal Structures For Touring Groups”

  1. Question reviewing your example of the Guarantee PLUS % deal. You note the artist’s potential walk-out is $29,229. I calculated the settlement based on your attached copy, all my numbers are the same except the final number (forgive me, and help me realize if I’ve done something incorrect). The split point (49,804) should be subtracted from the Net BOR (71,250), so the balance shared / split between the promoter and artist would be 21,446.

    If the artist takes an 85% bonus (standard) of that balance, 21,446*85% = 18,229, which is added on top of the guarantee (25,000 + 18,229 = 43,229). If you could please elaborate on how you received your final potential, that would be super helpful!
    Thank you.

    • Colin – Sorry about the delayed response. I didn’t get notification of your comment so I only saw it today.

      You are correct about the calculation. I am not sure why the example came out with the result it did. The spreadsheet I used as the basis of the example calculates it the way you described and comes up with the same result when I plug it in. The only thing I can think is that I wasn’t paying attention while I was plugging in the numbers and clicked on a random field that changed the calculation.


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