This week, Billboard (along with a litany of other music publications) reported: “Live Nation to Drop Merch Fees, Pay $1,500 Stipend to All Club Acts.” That stipend is effective only through the remainder of the year, but still: $1,500 per show for the remainder of the year is quite significant. And so is the revenue to bands that will come from Live Nation’s waiving of merch cuts.
This announcement happened amid backlash from independent artists, from Jeff Rosenstock to Car Seat Headrest, against the corporate concert industry for the long-normalized practice of promoters taking cuts of merch sales. (Ever notice that at arena shows T-shirts go for a minimum of $45? That’s why.)
The dirty secret is that this has been business as usual in the concert business for years, perhaps decades. And while talent agents don’t exactly rejoice in it, it would be inaccurate to say that they have systematically put up a tooth-and-nail fight against it (as Steve Albini correctly pointed out in a recent tweet). It’s understandably hard for artists to find leverage against a corporate standard when only two companies in the U.S. (Live Nation and AEG Presents) have the capacity and infrastructure to organize shows and tours for the A-listers.
Not often admitted, but merch cuts are 100% negotiable, to the extent that my bands over 40+ years have never, not once, ever paid them. When agents make deals, they don’t care about ticket surcharges, merch cut or other leaks; they don’t affect their cut. The band has to insist. https://t.co/EoX5fHiz5J
— steve albini (@electricalWSOP) September 5, 2023
Live Nation’s temporary stipend program was presented in partnership with the Red Headed Stranger himself, and the initiative is even called “On the Road Again.” In addition to the stipend and waived merch rate, Live Nation also announced bonuses for crew members and a $5 million donation to Crew Nation, a self-proclaimed “global relief fund for live music crews.” Venues in North Texas participating in this include House of Blues and The Echo Lounge.
On one hand, it’s great that crews and touring artists playing mid-sized venues at best are getting a lucky break for the next few months. Whatever the motives, this practice is already working some potent magic: In a world of inflationary pressures and increased costs of living and traveling, touring acts are able to get out more and actually get a fairer shot at making profit this year. (That kind of thinking may not be punk rock, but find us a landlord who accepts rent payments in germs burns, and then we’ll talk.)
On the other hand, we can’t sit here and assume this move was made without any strategy. Live Nation is a fine company that has made itself essential in the music industry, and while we think “On the Road Again” is a net positive that will increase standards of living for a great number of touring acts and crew members, the world’s largest concert promoter isn’t exactly a charity. Press releases announcing acts of benevolence are frequent in our line of work, and we would be abrogating our professional duties if we just parroted every press release without a morsel of critical thought. Accordingly, it behooves us to look beneath that surface and find out what advantages will accrue to Live Nation.
For one, whether intentional or not, it was effective crisis management. Music press can be a barren wasteland of tour-announcement news, so when acts such as Jeff Rosenstock and Bad Omens first tweeted about merch cuts and expressed their disapproval, publications such as Paste, Stereogum and Loudwire all covered it. The social media engagement those tweets and accompanying stories got created a negative image of Live Nation, and while it probably wasn’t enough to affect the company’s stock price, the concert promotion business is one that runs rather strongly on cultivating good will from artists. So if an act with a sizeable following says that you’re nickel-and-diming them, that just isn’t good for business.
But now Live Nation’s image is seemingly repaired. And look, it’s hard to see someone give your favorite acts a $1,500 bonus just for coming to Dallas (a market that is often skipped) and be upset. Again, net positive.
But there’s another benefit conferred to Live Nation that few publications are considering thus far: this is devastating news to independent promoters.
Think about it. Live Nation gets much of its money through arena shows from the Taylor Swifts and Paul McCartneys. Club and theater shows can be quite profitable for them, but a House of Blues show drawing a modest 500 people is a small blip on the radar compared to an arena show underperforming. Nobody bats an eye when a theater show proves to be a miscalculation of an artist’s draw, but when Roxy Music’s comeback tour bombed, even The Washington Post talked about it.
So, yeah, if Live Nation has to break a few eggs to make an omelet, it won’t be the most devastating thing for those eggs to be broken at The Echo Lounge. There are other revenue streams afforded to Live Nation to offset any loss from a miscalculated theater or club show, so for Live Nation, the name of the game in those circumstances is getting as many people into the venue as possible (even if you have to give away tickets for free) just so the artist plays to a full house and more alcohol is sold.
But revenue streams of this sort aren’t nearly as diverse for independent promoters. Moreover, mid-size theater shows are to independent promoters what arena shows are to corporate promoters. So if Live Nation can entice artists and their agents into accepting offers from them instead of their competitors, that will starve independent promoters of much-needed shows, especially the more profitable ones.
Was this their calculation? We’re not in the business of speculating as to a multitiered company’s true intent. But let’s face it: this was an effective crisis management move, and it doubled as a knockout punch against competing independent promoters. However you feel about the stipend program, it’s obviously great for touring artists while simultaneously being cause for intense trepidation for other promoters and mid-size venues.
And beyond that, Willie Nelson is involved. You can’t infer nefariousness from a 90-year-old stoner who wrote Faron Young’s “Hello Walls.”