How to Calculate an Artist Fee Offer

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How on earth would you go about calculating an artist fee? No decent agent or manager would ever respond to a request with a fee for their artist. They’ll ask you to make an offer for the concert you’re organizing. After all, why would they? This way, you either bid too low and they’ll let you know right away, or you bid too high and they’ll gladly take your offer.

The main risk of course being that you might make too high an offer – especially if you’re eager to host that specific performer at your event. Moreover, they might merely be one of many performers playing your festival. So how much should you really offer? Luckily, there’s a pretty simple formula to calculate an offer that litterally won’t prove too costly. Just imagine: what if the artist were to come to your country on his own? How many people would they draw and at which ticket price? That gives you a pretty accurate picture of the gross ticket revenue an artist can generate. Divide that amount by three, and you’ve got yourself a nice guideline for a decent fee offer.

A GUIDELINE
Example given: In Belgium, David Guetta could draw a 10 000 people crowd at a mean ticket price of € 30, making a total gross ticket revenue of € 300 000. Divided by three, that means our offer for David Guetta would be € 100 000. Childishly simple… Should you find it difficult to estimate the total amount of visitors per artist, try thinking in terms of venues or halls. Nicki Minaj can fill the O2 Arena, FKA Twigs is currently filling the Roundhouse. That means that Twigs would generate a gross ticket revenue of £ 82 500: 3300 capacity x £ 25 ticket price.  82 500/3 means our offer would be £ 27 500.

Of course, this calculation isn’t rocket science or even a hard rule. It’s merely supposed to help you start off negotiations with managers or booking agents on the right foot. If the agent or manager laughingly declines your offer, you’d do best to just look for a different artist if you want to avoid bankrupting your event. Be what may, I’ve found that in practice, these naked numbers work pretty well on the negotiating phone.

EXTRA COSTS
Lastly, make sure to always clearly state whether an offer is ‘all inclusive’ or not. Travel or accommodation can make for some very unpleasant surprises, for instance if an artist suddenly decides he wants to fly in from Detroit in Business Class. Also, for example: here in Belgium, promoters have to pay an 18% ‘artist tax’ on top of non-Belgian acts’ fees. That means that an artist fee of € 10 000 will cost you an extra € 2195,1 in artist tax (‘Tax on top’ means (10 000/82).18 = 2195,1). On the other hand, agents will almost never agree to include taxes in the total fee as they rarely have a clear view of what those taxes will add up to. Local taxes will almost always be added ‘on top’ of the fee (that means you’re going to have to pay them). Just as long as you keep that in mind when making up your budget, it should be fine. Also, there’s nothing wrong with informing the agent management of the extra taxes you’ll have to pay on top. Sometimes they aren’t aware of those extra costs, and letting them can help while negotiating.

Long story short: without trying to offer the holy grail of offer calculation, here’s the formula for an accurate fee estimation:

GROSS TICKET REVENUE/3 = (GROSS) FEE OFFER

Use it to your advantage!

More on artisttax in Belgium (Dutch)

This post is also available in: Dutch

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