This kind of makes sense, right? Live Nation is all about driving revenue through concert promotion. If they can also make income off of the headliners performing in those concerts, that’s good business.
The way they’ve gotten so big in the artist management field is by acquiring management companies. Read this:
“In the US, these include Roc Nation Management, 24 Artist Management, Blueprint Artist Management, Spalding Entertainment, LMG Management, Mick Artists Management, Three Six Zero Group, Vector Management, Career Artist Management and Philymack Management (home to Demi Lovato and Nick Jonas).”
Now, my only concern as an outsider looking in is this: If I’m the artist and a ticket to my show is sold, the promoter gets a piece of that and my manager gets a piece of that. If Live Nation is ultimately my manager’s parent company, they’re now getting a piece of the percentage I pay my manager. In effect, Live Nation is double-dipping on me.
Or is it? One could state this is more like a different kind of 360 deal; more like a 90 deal, since it just deals with live. But…
Suppose I do have a 360 deal. In theory, my label is getting a piece of my merch and my ticket sales. My manager gets a piece too, of course. But Live Nation is getting two pieces of both since they get their percentage on the front end AND on the back end (since they own my manager’s company).
Isn’t this a conflict of interest at some point? On the live end, my agent (who gets 10%) is negotiating my deal with Live Nation for this tour. Live Nation gets to hedge their bets on me by knowing they have a buffer, since they get part of the 20% my manager gets. If my tour isn’t awesome, they’re in better shape as owner of my manager’s company than if they didn’t own it. So maybe, in this case, they’ll be a little more generous with their offer to me for the tour.
Or, maybe, they don’t need to be as generous because they’re following the market pricing anyway. Maybe artists benefit because Live Nation will book their tours instead of bands/artists in which they don’t own part of the management commission. It’s not simple, is it?
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Professor David Philp is Assistant Professor Music Management & Popular Music Studies at William Paterson University. He is the co-host of the only FREE advice college radio-based music & entertainment industry talk show in America, Music Biz 101 & More, which airs live most Wednesday nights and is available as a podcast HERE every night (days too). Your favorite professor is also co-author (with Dr. Steve Marcone) of Managing Your Band – 6th Edition. Reach him at PhilpD@wpunj.edu or find him on LinkedIn HERE.