What The !*&$! is a Percentage Deal and How Does it Work?

It’s called ‘A guarantee against a box office split.’

You want to book an artist to play at your venue – let’s call him Lawrence of Arabia, Laurie A for short – and you ask me what his fee is. I tell you it’s three hundred pounds against 80%  of the nett ‘door’ and your brain goes into overload. Am I offering you a good deal? Am I trying to blind you with science. What the blooming heck is a percentage deal anyway? What’s a box office split? What’s a guarantee?

Well, first off, it’s nothing to worry about. It’s a pretty good way of ensuring that there’s a bit of flexibility built into the deal which means both the artist and the booker get the fairest deal at the end of the night, based on how many seats were sold at the gig and for what price.

It’s customary when negotiating a percentage deal for the ticket price to be agreed in advance so the artist knows that there’s every chance of  ending up with more than the basic agreed amount. I don’t insist on a minimum ticket price for every artist, though some insist on it for themselves. I generally hope that we can come to a sensible figure based on your hstorical precedent and the artist’s usual expectations.

Terminolgy

The ‘door’ is just shorthand for ‘box office revenue’. Americans and Canadians refer to it as the ‘gate’.)

What does £300 against 80% of the nett door actually mean?
It means you guarantee to pay Laurie A a minimum of £300 but when you’ve counted your box office revenue, and deducted the direct costs of putting on the gig, if eighty percent of the amount you have left comes to more than £300, you pay Laurie A the higher figure. Legitimate expenses include: hall hire, Laurie A’s bed and breakfast bill, the PA hire and any direct advertising for the one show. The list of legitimate expenses is usually agreed in advance. Note if you advertise ten gigs in the same ad you can’t deduct the amount of the whole ad before calulating the expenses, only one tenth of it.

Obviously the ticket price enters in to the calculation, so ticket prices are agreed in advance too. It’s important for everyone to know at the time of the booking what the potential revenue is from the gig. If the hall seats 100 and you are only charging £3 per ticket, there’s no way a percentage deal can kick in. But if the hall seats 100 and ticket prices are £10 then there’s every chance of smiling faces at the end of the night.

An example.

You book Laurie A for £300 against 80% of the nett door.
You sell 80 tickets at £10 each meaning your gross box office take is £800.
You hire a hall for £100 and pay another £100 for a PA system, but Laurie A stays in your granny’s spare room so you don’t pay for B&B on this occasion. You take out an ad in the local folk magazine, but it advertises 6 artists and only costs £20 so you write that off. Therefore your total direct costs are £200

Deduct your direct costs of £200 from your gross box office of £800 and your nett box office is £600
80% of £600 is £480
You pay Laurie A £480 instead of the £300 guarantee.
This means that you keep a clear £120 for your club/venue/pocket, in addition to the £200 for expenses. (You also keep the proceeds of the raffle if you have one, that doesn’t enter into this calculation).

BUT
Say you only charged £7 for tickets and all your expenses and Laurie A’s fee remained the same the figures would look like this:

Gross box office take (80 x £7) = £560
Nett box office (after deductions of £200) = £360
80% of £360 = £288
You pay Laurie A the minimum guarnatee of £300 as agreed.

Let’s try that again

You book Tinkerbelle Tailor for a fee of £200 against 90% of the nett door.
Your folk club room costs nothing and you don’t use a PA. Your only expense is £20 for the local folk magazine advert which you took out just for Tink (as you didn’t have any other guests that quarter).

You charge £6 on the door and get 47 bums on seats, but you let 2 of them in free because they are the support act. So 45 tickets at £6 each equals £270. Deduct your expenses of £20. The nett is £250.

90% of £250 = £225.
You pay Tink £225

BUT if you only get 30 paying people in at £6 per ticket, your gross is £180, yet you have still guaranteed to pay Tink £200, so you still have to do that on the night as agreed.

I hope that helps. If you are booking an artist through my agency and you are still puzzled call me on 01484 606230 and I’ll explain it all again.

About Jacey Bedford

Jacey Bedford maintains this blog. She is a writer of science fiction and fantasy (www.jaceybedford.co.uk), the secretary of Milford SF Writers (www.milfordSF.co.uk), a singer (www.artisan-harmony.com) and a music agent booking UK tours and concerts for folk performers (www.jacey-bedford.com). She's also a Home Office / UK Visas and Immigration department licensed sponsor processing UK work permits (Certificates of Sponsorship).
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