Live Nation shakes the Music Industry due to Covid-19

Live Nation, the world’s largest concert and events promoter, and AEG Live, the world’s second-largest such company, control a massive number of artists and music festivals all over the world. In other words, together they practically control the large-scale live music industry. Following a similar document released weeks ago, two days ago Live Nation sent to its talent partners a memo with significant changes regarding festival and shows for 2021 that it's gonna put most of the artists in a critical situation.

Some examples? Well, imagine you are an artist and you have to cancel a show, if that happens in 2021 you will have to pay the promoter twice your fee. Or let's say you have a show that gets cancelled after not selling enough tickets. With the new agreement you will receive only 20% of the guarantee, instead of getting it fully. Some of the clauses of the agreement were already part of the game, but some others will only add more pressure on artists. Find below the full memo released by Live Nation!

Live Nation Memo to Talent Agencies

The global pandemic has changed the world in recent months and with it the dynamics of the music industry. 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. The principle changes for 2021 are outlined below.

Artist Guarantees

Artist guarantees will be adjusted downward 20% from 2020 levels.

Ticket Prices

Ticket prices are set by the promoter, at the promoter’s sole discretion, and are subject to change.

Payment Terms

Artists will receive a deposit of 10% one month before the festival, contingent on an executed agreement and fulfillment of marketing responsibilities. The balance, minus standard deductions for taxes and production costs, will be paid after the performance.

Minimum Marketing Requirements

All artists will be required to assist in marketing of the festival through minimum social media posting requirements outlined in artist offer.

Streaming requirements

All artists will be required to allow their performance to be filmed by the festival for use in a live television broadcast, a live webcast, on-demand streaming, and/or live satellite radio broadcast.

Billing

All decisions regarding “festival billing” are at the sole discretion of the promoter.

Merchandise

Purchaser will retain 30 % of Artist merchandise sales and send 70% to the artist within two weeks following the Festival.

Airfare and Accommodations

These expenses will be the responsibility of the artist.

Sponsorship

The promoter controls all sponsorship at the festival without any restrictions, and artists may not promote brands onstage or in its productions.

Radius Clause

Violation of a radius clause without the festival’s prior authorization in writing will, at the festival’s sole discretion, result in either a reduction of the artist fee or the removal of the artist from the event, with any pre-event deposits returned to the festival immediately.

Insurance

The artist is required to maintain its own cancellation insurance as the promoter is not responsible for the artist fee in the event of a cancellation of the festival due to weather or a force majeure.

Cancellation by Artist

If an artist cancels its performance in breach of the agreement, the artist will pay the promoter two times the artist’s fee.

Cancellation Due to Poor Sales

If a show is cancelled due to poor ticket sales, the artist will receive 25% of the guarantee.

Force Majeure

If the artist’s performance is canceled due to an event of force majeure – including a pandemic similar to Covid-19 – the promoter will not pay the artist its fee. The artist is responsible for obtaining any cancellation insurance for its performance.

Inability to Use Full Capacity of the Venue

If the promoter – either because of orders of the venue or any governmental entity – is not permitted to use the full capacity of the venue, then the promoter may terminate the agreement, and artist will refund any money previously paid.

We are fully aware of the significance of these changes, and we did not make these changes without serious consideration. 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.

Cover photograph by Matias Altbach