Live Nation has already undertaken a number of cost-saving measures since the onset of the coronavirus pandemic, including furloughs and pay cuts, boosts to liquidity and abandoning acquisitions. But now the entertainment titan is implementing further changes to its operations that focuses directly on partnered talent agencies and artists.
The company issued a memo this week to its talent partners detailing new financial policies which will be adopted in 2021. Notable changes include pay cuts to artists’ show guarantee fees, insurance and cancellation procedure updates and protocols for venues which are unable to be filled.
“The global pandemic has changed the world in recent months and with it the dynamics of the music industry,” states the memo, which was obtained and shared by Rolling Stone. “We are in unprecedented times and must adequately account for the shift in market demand, the exponential rise of certain costs and the overall increase of uncertainty that materially affects our mission. In order for us to move forward, we must make certain changes to our agreements with the artists.”
Under the new terms, artists are to receive guaranteed funds at a rate 20 percent lower than in 2020 and would receive a quarter of their guarantee if a show is cancelled due to poor ticket sales. Artists would need to retain their own cancellation insurance for festival appearances should an event be cancelled due to weather or a force majeure such as the coronavirus pandemic.
“We are fully aware of the significance of these changes, and we did not make these changes without serious consideration,” Live Nation added. “We appreciate you – and all artists – understanding the need for us to make these changes in order to allow the festival business to continue not only for the artists and the producers, but also for the fans.”
Among the more extreme measures is a new cancellation policy stating that if artists are to cancel a show in breach of agreement, they are to pay the promoter twice their guarantee fee.
Certain pandemic-related procedures have also been added. Artists performing at festivals are required to allow their set to be filmed for video and/or radio streaming, while artist fees will not be paid if an event is cancelled by way of force majeure. In the new age of social distancing, many venues are cutting their capacity for live events. Live Nation states that they may cancel their agreement if venues are ordered not to be full, in which case an artist will refund any money previously paid.
Last Updated on June 18, 2020 by Kelly Byrnes