On June 18, Live Nation, the world’s largest live-entertainment company, announced that it plans to make significant changes to its policies, including the possible implementation of reduced pay cuts to artists, for its 2021 tours and festivals. According to a memo circulated to talent agencies, this poses the financial risk over to the artists and agencies instead of the promoter, since it suffered such a loss this year due to the coronavirus pandemic. Last month AEG, the second largest such live entertainment company also issued a similar memo specifying its changes.
The first report of the news was by Rolling Stone and Billboard leaving much to speculation. However, a close source stated that most aspects of touring contract are negotiable and memo was intended to be the first step in official renegotiation of contracts for any post-pandemic events, which will be substantially different from the past.
The company plans to decrease guarantees to artists to 20% from its 2020 levels. Further, if any artist cancels a performance in breach of contract, it will pay the promoter double the artist fee. If an artist’s performance is canceled to “due to an event of force majuere, including a pandemic similar to COVID-19,” the promoter will not pay any of its fee. Instead, the artist is responsible for obtaining any cancellation insurance for its performance. Should the promoter be not permitted to use the full capacity of the venue, either because of orders of the venue or any governmental entity then the promoter may terminate the agreement, and the 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.”– Live Nation