Legal Beat: Pay To Play
Recently, I ran into a musician friend who told me that his band was scheduled to tour Europe opening up for a headlining act. My first question was, “What was the buy in?”
For those who believe that bands are selected to open for the headlining act because of who they know or how good they are, this is only partially true. In fact, how much money a band can pony up can be the deciding factor. And let’s not forget the political muscle your manager has with tour promoters and other bands (which may also play a large part) combined with a promising recent album release.
Not all opening acts pay a buy-in, particularly those that have enough name recognition to headline on their own. Lesser-known acts are therefore more likely to pay a buy-in.
But even if the stars align and you’ve been selected as an opening act, you may still face the buy-in issue. Stated simply, a band pays the headlining act or tour promoter a sum of money that is used to subsidize the tour. Those costs are recouped through ticket and merchandise sales. (I’ll discuss merchandising in a future installment of this column.)
My musician friend’s band paid a mere $10,000 for the privilege of being the opening act on this particular tour, although amounts will vary depending on the relative size of the tour and the costs of supporting the tour. My friend’s band also had a recently released album. However, buy-ins of $500,000 to $1 million are not uncommon.
Be sure to secure and sign a contract stating the exact amount of the buy-in, at which point you will also want to take note of any hidden additional costs. Be sure the contract states the exact dates your band is expected to perform, and that all transportation, food, equipment, roadie, and insurance costs are discussed. Unpleasant surprises can arise if you are forced to lay out additional funds for items not covered in the contract. If a bus is involved, chances are that’s where you will be sleeping. If not, be sure to address sleeping accommodations.
Since you will presumably be collecting a portion of gate receipts and merchandise sales, be sure to receive daily accountings of those receipts and attendance figures. If circumstances permit, send a roadie or another person to actually “count the house,” especially if cover charges are being paid at the door in cash.
The amount and methods of payment can vary widely, so be sure to address every aspect of the tour which is important and even unimportant such as salaries of managers and promotion costs, travel, catering, merchandising, ticket sales, billing, accounting, receipt of payment, etc.
If your band has gotten to the point of headlining or opening act status, it’s advisable to have a manager and attorney review such contracts to avoid the pitfalls of those bands that thereafter disappeared into obscurity.