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Live Nation Plans to Shift Cancelation Risk to Artists in 2021

Due to COVID-19, changes are being made to practically everything in our world today. We’ve all been living different lifestyles for several months now and are looking forward to it all to end. One of the things many of us are looking forward to the most are concerts and festivals. It’s going to be some time until large gatherings like these can commence but there’s already some revisions in place.

Rolling Stone recently obtained a memo from Live Nation outlining the major changes. The memo begins by addressing how the music industry has changed over the last several months. Because of these changes, Live Nations states that they “must adequately account for the shift in market demand“. Live Nation then set out their new policies that will mostly affect artists. These include ticket prices that are controlled entirely by the promoter and penalties for canceled performances.

One of the most shocking policies stated in the memo has to do with artist cancellations. For example, if an artist cancels a performance and breaches the contract with the promoter, the artist must pay the promoter two times the artist’s fee. Another interesting requirement is artists must consent to recording of their performances for streaming or live radio broadcasts. We can already think of several artists who will not like that. In addition, if an event is canceled due to weak ticket sales, artists will only receive 25% of the guarantee instead of 100%.

Luckily for fans, all of these policies will affect artists starting in 2021. Still, it seems like a heavy burden to all the artists who just want to get back on stage. Nevertheless, we’ll continue to support our favorite performers as we have, even before the virus.

Read the memo in its entirety below:

Live Nation Changes for 2021

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.

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