Show Settlement: A Beginner’s Guide to Settling Concerts

How to Settle a Show

Understanding the ins and outs of show settlement is one of the most important parts of being a tour manager.

On mid-level tours, a tour manager is often wearing the tour accountant hat and will settle the show at the end of the night.

As with anything relating to tour management, preparing for settlement begins long before ever arriving at show settlement.

If you’ve never seen a show settlement template, it can feel a bit overwhelming.

In this article, we will help you understand what a show settlement is, identify different terms and deal examples, and explain how to settle a show.

What is a Show Settlement?

A show settlement is the process of reconciling and finalizing all the financial transactions related to a concert.

This includes reviewing revenue, expenses, and payments to all parties involved.

Concert settlements typically occur at the end of the performance, but exceptions do apply.

The tour manager and the promoter representative usually settle the show together.

Once both parties approve and agree on everything, the promoter issues payment.

What is a Deal Memo?

A deal memo outlines the terms of a concert performance between the talent buyer and the artist’s team.

This can include financial agreements, who will supply production elements, and any additional provisions that are material to the show logistics.

It’s the precursor to a contract and identifies the nuts and bolts of what is, or is not, included in the deal.

Reviewing the deal memo is critical in understanding how to settle the show.

Concert Settlement Terminology

Audit

A ticket audit captures a snapshot of tickets sold or unsold at a specific point in time.

Adjusted Gross Potential

This is the gross potential, less any facility fees or charity deductions.

Backend

Backend is additional money that an artist can earn on a hard ticket show that is selling well.

Billing

Headline, Co-Headline, Direct Support, Special Guests, and An Evening With are examples of artist billing.

Breakeven Point

Concert expenses plus artist fee.

Charity/Donation

A charity deduction is typically taken off the top for an organization the artist has aligned with.

Comps

The artist and promoter give complimentary tickets to people on the guest list.

Deductions

A deduction is when there is an artist expense paid out of the guarantee.

These are typically not part of the original deal and are broken out to bring attention to them.

Drop Count

A drop count is how many people actually show up to the event.

1000 tickets may be sold, but say only 900 people show up. 900 would be the drop count.

This is used when calculating variable expenses such as insurance or ASCAP, BMI, and SESAC.

Exchange Rate

An exchange rate is the relative price of a currency expressed in terms of another currency.

This is important when touring internationally.

Expenses (Fixed)

Fixed expenses do not change based on the number of concert attendees.

A promoter will submit expense “bids” for approval, but “actuals” may vary.

A bid is an educated guess, while actuals are what things end up costing.

Any material changes in expenses need to be agreed upon by everyone prior to incurring them.

Expenses (Variable)

Examples of variable expenses include performance rights organizations and insurance.

These are calculated based on the drop count.

Expenses (Show Cost vs Artist Cost)

Expenses are further categorized as either a show cost or an artist cost.

A show cost is an expense the promoter pays for, while an artist cost is paid for by the artist.

Facility Fee

Facility fees are used to help support the upkeep of the venue.

Sometimes there will be a restoration fee for historic venues.

GA Ticket

General admission tickets that will get attendees into an event but do not provide any seating assignments.

Gross Potential

The total amount of revenue an event can generate on paper.

Sometimes an event will be oversold to take into account guests who no-show.

The gross potential could be higher at the final settlement due to the additional tickets being sold.

Guarantee

This is the amount of money that an artist receives as compensation for their performance.

Holds

These are tickets that are held and not initially released for sale.

Inclusive

Sometimes there will be language such as “inclusive of support.”

For example, if you are receiving 60% GBOR inclusive of support, that means that support gets paid out of the 60%.

Kills

These are seats that cannot be sold due to production elements taking up space, or are unsellable seats due to poor sightlines.

Merchandise Rate

Merch rates are percentages that artists pay to the promoter.

There are usually different rates for soft merch and hard merch.

Soft merch consists of t-shirts, hoodies, and anything cloth.

Hard merch is recorded media such as vinyl records.

“Venue sells” means the venue will provide someone to sell your merch.

If it says “artists sells” that means you need to coordinate your own seller.

NBOR (Net Potential)

Net Box Office Receipts. This is the adjusted gross less any taxes and fees.

Origination Fee

Venues will often charge a fee for filming in their venues.

Per Advance

Per advance means that the item in question is determined during the advancing process.

For example, hospitality is typically coordinated “per advance.”

Platinum Lift

Some shows will use dynamic ticket pricing.

Depending on the available ticket inventory, the ticket price will fluctuate.

Production Costs

Costs related to the technical production of the concert, including sound and lighting equipment, stagehands, etc.

Promoter Profit

A promoter’s profit is typically a percentage of the show’s expenses.

For example, a 15% promoter profit on a show with $1000 in expenses would be $150.

This is used to calculate the split point on a promoter profit deal.

Reduction

In rare instances, a promoter may ask for a reduction in the guarantee if ticket sales are doing extremely poorly.

This is something that would be coordinated in advance by the promoter, and not the night of the show.

Rider

The artist rider outlines technical and non-technical requirements for a show day.

Settlement Sheet

This document outlines all of the financial details of the concert, including revenues and expenses.

There are many different versions of settlement spreadsheets.

Split Point

Total expenses, plus artist fee, plus promoter profit. This is when a backend kicks in.

Total Capacity

This is the legal capacity of the venue.

Sellable capacity means the total capacity, less any ticket comps.

Tickets (Advance vs DOS)

Tickets sold in advance are typically sold at a different price point compared to tickets sold day-of-show.

Another name for day-of-show ticket sales is walk-ups.

Ticket Buy

A ticket buy is when the artist’s team (management, booking agent, record label) will purchase tickets to their own show for distribution.

This is very common in cities with a strong music industry presence.

VIP Lift

Sometimes artists will run a VIP activation as part of their tour.

VIP settlement is typically separated from artist settlement and handled by the VIP company.

Withholding

Depending on the region you are performing in will determine if taxes are withheld.

This is very common with international performances and can materially impact cash flow.

Make sure to highlight when creating a tour budget to avoid potential issues.

Some withholdings can be avoided by business management by filing a tax waiver in advance.

Make sure to request tax documents at settlement that shows the money has been withheld.

Hard Tickets vs Soft Tickets

A “hard ticket” event is one where the primary attraction is the specific act or artist performing.

People are buying tickets specifically to see that artist.

The success of the event is heavily dependent on the artist’s draw or popularity.

Hard ticket shows sometimes have a backend component as part of the deal structure.

Backend is a percentage of net revenue after expenses have been covered.

A “soft ticket” event, on the other hand, is one where a specific artist is not the primary draw.

People attend for the overall experience, such as a music festival.

What is a Deposit Report?

A deposit report shows what deposits a recipient has or has not received.

A deal memo normally includes a deposit schedule that explains the amount and due date for the promoter’s deposit.

The relationship between the talent buyer and the booking agent, along with the event history, will determine the deposit amount.

If the advance ever feels odd, review the deposit report to ensure the receipt of everything.

If a deposit has not been sent in, flag it for follow-up.

Different Types of Show Settlements

There are a few different common types of artist deals you will encounter during a show settlement.

Door Deal

A door deal is a percentage of ticket sales the artist receives after the promoter covers basic expenses.

These are very common in smaller venues and when working with a developing artist.

For example, let’s say the deal is 70% of GBOR (Gross Box Office Receipts) after expenses.

Let’s say 100 people purchase a $10 ticket. The total gross is $1000. After a house nut of $300 to cover expenses, we are left with $700.

The artist will receive 70% of the $700, which is $490.

Flat Guarantee

A flat guarantee is a set amount an artist will receive regardless of ticket sales.

It doesn’t matter if the show sells out, or if only one person shows up, the artist will receive the same “flat” guarantee.

These types of deals are very common for soft-ticket festival performances.

Versus Deal

A versus deal is when there is a guarantee versus a percentage of NBOR after expenses.

The artist would receive whichever amount is greater.

Let’s say the guarantee is $1000, but the artist sold the place out, and the percentage of NBOR after expenses comes to $1500.

The artist would receive $1500 instead of the $1000.

Promoter Profit Deal

A promoter profit deal is typically written as a guarantee plus 85% of NBOR after expenses and 15% promoter profit.

Actual percentages used will vary depending on the room and deal structure.

Add up the artist fee, show expenses, and promoter profit on expenses and you reach the split point.

After the split point has been reached, the show would go into “points” or “backend” and the remainder is shared between the tour and promoter.

For example, let’s say the artist guarantee is $1000 and show expenses total $500.

The promoter profit on this show would be $500 x 15% = $75.

The split point is $1575. Broken down, this is a $1000 artist guarantee, plus $500 expenses, plus $75 promoter profit.

Let’s pretend NBOR is $2000.

$2000 NBOR less $1575 equals $425 left to share.

85% of $425 is $361.25. This is the artist’s share.

15% of $425 is $63.75. This is the promoter’s share.

The total artist walkout is $1000 (artist guarantee) + $361.25 (backend) = $1361.25.

Bonus Deal

A bonus deal is when after a certain amount of tickets are sold, a bonus is paid out, or a higher percentage of compensation kicks in.

For example, at 1000 tickets sold, the artist will receive a bonus of $1000.

If they only sold 900 tickets, they would not receive this bonus.

Another way you might see this is at 1000 tickets sold, the artist will receive 70% of NBOR after expenses.

If they only sold 900 tickets, they would receive 65% of NBOR after expenses.

Again, the tickets sold and the percentages used are entirely arbitrary for the sake of an example.

Cross Collateralization 

A cross-collateralization deal is essentially just spreading an offer across multiple dates.

These types of deals have become more and more common with the consolidation of promoters.

These are also very common if you are with an artist touring internationally in a specific region or country.

How to Settle a Show

1. Review the Deal Memo

As you are preparing for the tour, take a good look at deal memos and make sure you understand the deal.

2. Review the Deposit Report

Closer to the show date, review the deposit report sent by the booking agency to confirm if a deposit has or has not been sent in.

3. Advancing

Make sure to send over the artist’s W9, banking details, and wire instructions.

Specify if you want to be paid in cash, check, or wire. If requesting cash, make sure to ask for specific bill types.

During the advancing process, you might realize you can cut the amount of labor you need, or you can reduce the amount of hospitality needed.

Additionally, you may realize you can go ahead and release holds or comps a few days out to get them sold.

Effective communication can lead to expense savings along with increasing revenue.

4. Review Pre-Settlement

Leading into show day you can get ahead by reviewing pre-settlement to have an idea of where things are going to land on show day.

On a hot tour where shows are sold out well in advance, advertising is a key area to keep an eye on.

Reviewing the pre-settlement day-of-show, in the afternoon, can solve so many issues you don’t want to discover at the end of the night.

The booking agent will appreciate this too if you need to call to clarify anything.

5. Decide What Time to Settle

Figuring out when to settle is a skill in and of itself.

This can be done while the artist is on stage, or after the show comes down.

If you’ve done your homework leading into a settlement, this should be a fairly painless process.

Again, it’s important to review pre-settlement to avoid end-of-night complications.

If worse comes to worst, and there is a situation without immediate remedy, you can always leave the show unsettled.

6. Collect Payment

You might be collecting cash, a check, or a combination of the two.

If you’ve requested a wire you’ll want to reconfirm routing and banking details are correct.

You’ll also reconfirm that the correct W9 is on file.

7. Update Road Reports

Get in the habit of updating your road reports as soon as you’ve settled the show.

This is a tenet of good tour accounting.

Sometimes this isn’t always possible, but getting ahead of this can help to solve self-inflicted accounting errors.

8. Send a Detailed Nightly Report

Once everything is updated, send a nightly report to the rest of the team.

This will include the numbers, but also a notes section with a quick run down of how the day went.

Further down, we’ve included a template for nightly reports.

How Do Artists Actually Get Paid

Artists receive payment either in cash, by check, or through wire transfer.

The tour manager will specify their preferred payment method in advance and collect one of these forms of payment at settlement.

Cash is becoming less and less common on the road, but can be useful for issuing per diems, paying for fuel, or other daily production expenses.

When receiving a check, ensure that everything is correct.

Prior to mobile banking, trying to deposit a check could be problematic depending on the availability of branch locations.

Wires are a very common form of issuing large payments for artist settlements.

Domestic wires are normally received within 24 hours of being sent.

Cash Management Tips

Count

When receiving cash, make sure to always count it.

Miscounting does happen and can be a costly mistake.

Record

Going off of the above, when cash enters or exits your road float, it’s crucial to record the transaction.

Make sure you get a proper cash receipt.

Organize

The bank teller will love you if you band the cash with money ties and face bills all the same way.

This is also a time-saving mechanism that prevents you from having to recount cash in your float.

Secure

Money has a habit of walking away if left out in the open, so make sure you properly secure it in a safe.

Some production cases have safes inside, along with buses.

If you don’t have a safe, your best bet is to make a bank deposit, find a tour expense to spend it on or keep the cash on you.

Specify Bill Sizes

When advancing cash, request the specific denominations that you need.

$100 bills are useless when you need $5’s, $10’s, and $20’s for per diem or change making.

Separate Floats

Do not mix personal money with your road float.

Additionally, do not mix merchandise money with your road float.

The same goes for different currencies.

Keep all of those books separate.

Declare It

When crossing international borders, you typically have to declare anything over $10,000 USD.

If you don’t declare it, you are asking for a giant headache.

Sending a Nightly Show Report

After settlement is complete, the tour manager will send a nightly report to the artist’s team.

This normally includes management, booking agent, business manager, and anyone else who needs to be on the nightly report.

You are creating a high-level overview along with a historical entry.

This is another piece of the staying organized tour management puzzle.

Subject Line

Artist Name – Date – City, State – Venue

When

Include the day of the week and the show date.

Labeling both North American and International shows with the same date format will help with organization over time.

Where

City and state name is sufficient.

Venue

The name of the venue.

OTB (On the bill)

Who was performing on the bill with you? Was this a support slot or headlining gig?

If at a festival performance, include the other acts on your stage.

Weather

Important to note as weather can impact turnout.

Attendance

Including the number of tickets sold along with the drop count.

Guarantee

You’ll want to record any deposits, withholding, and what is picked up.

Specify the amount of everything along with the form of payment.

Merchandise

Include a breakdown of cash vs credit sales.

AtVenu is an inventory management system that helps with merchandise settlements.

Notes

You are the eyes and ears of the rest of the artist’s team.

Include a brief run down of how everything went.

Attachments

Include scans of the settlement, checks, withholding documents, and anything else that you need to keep a record of.

Conclusion

As you can see, a lot goes into properly settling a show.

The main thing to remember is that you want to get ahead of things early and effectively communicate.

More often than not, it’s when there is a lack of communication that tour settlements run into issues.

Remember that if you don’t understand something before, during, or after settlement, it’s okay to ask questions.

As a tour manager, one of your main goals is to find ways to maximize revenue for the artist you’re working for.

Everyone has to start somewhere, and with time and practice, you will become fluent in the language of settling shows.