Concert Economics 

Promotion is not for the faint of heart.

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"I can't tell you how many times artists have asked me, 'Are you making a living doing this?' You can't make a living on ticket sales alone," says Brad Wells, promoter for Innsbrook After Hours.

Dolly Vogt, Richmond Coliseum's general manager, agrees. "At the end of the day," she says, "it is sponsorships and concessions that allow both facilities and events to be profitable."

Wells promoted his first concert in 1994 at a Richmond club via his Sea of Sound production company. In 1997 he presented a concert at Innsbrook After Hours, now Virginia's longest-running midweek concert series (in its 21st year). With grant funding and community/individual support, Wells launched into full-time concert promotion in 2000, subsequently partnering with Laurin Willis in James River Entertainment to produce concerts throughout the Mid-Atlantic region.

Regarding Innsbrook's outdoor venue, he says: "If the weather is good, it works. If the weather is bad, it can be really bad; 2003 and 2004 were tough years due to the weather, but we're still here. If you're afraid of risk, you'd better not be in this business."

There's no way to put on a concert in Central Virginia for less than $15,000, Wells says — excluding the artist's fee. That low-end estimate would include such items as insurance, police and security, sound, lighting, catering, facility rentals, permits, staging, fees associated with ticket sales, stagehands, hotel fees and advertising. Costs can easily rise to $150,000 at the Coliseum, excluding artist fees.

"If you have a full house at the Coliseum, you could easily have 110 [local staff] people working," Vogt says. "People don't understand how much it costs to produce a show — the promoter, the facility and the act are not walking away with as much money as you think. Big acts can have 80 to 100 people [with them] on the road, so artists can still lose money at the end of a big tour."

Some fans blame high ticket prices on radio conglomerate Clear Channel Entertainment, which became the largest live music company in 2000 after purchasing concert promotion company SFX Entertainment. (Clear Channel has since spun off its entertainment division under the name Live Nation, responsible for bringing in the sold-out Tim McGraw-Faith Hill show to the Coliseum June 7). Artist payments were raised, in turn pushing up ticket prices, sometimes beyond what some fans were willing to pay. Since then, the firm has reportedly been taking a hard look at lowering ticket prices.

Wells says sponsorships allow Innsbrook to preserve affordable ticket prices. General admission is still $10, with "Gold Seats" (a guaranteed seating section with the best seats directly in front of the stage) around $30 for acts that include country star Trisha Yearwood in September. In contrast, tickets for the Coliseum's McGraw-Hill show were $65-$85 each.

Artist fees for national acts average $25,000 and can go up to $70,000 or more. Mega-selling hot acts may get $500,000 guaranteed, with traditional contracts stipulating 85 percent/15 percent artist/promoter splits. Promoters pay artists an advance against contracted guarantees, leading one agent to observe that "the promoter gets 15 percent of the upside and 100 percent of the downside."

Wells, a strong artist-advocate, notes that "$20,000 for an artist doesn't go far with million-dollar buses and 18-wheelers [to transport equipment]."

Robert Fleskes, director of marketing for the coliseum, agrees, "When it comes down to it, you've got to do a lot of dates to start making money."

The Coliseum is host to about 150 events a year but only 12 percent of them are concerts. Vogt, who spent nearly 18 years as a promoter and facility manager, including a stint at The House of Blues, says in her previous Atlanta-based facility job sponsorships totaled $1.2 million to $1.8 million annually, and she's in the midst of a sponsorship effort here.

"The corporate community needs to invest in our facility, either via venue signs or a sponsorship," she says. "The city of Richmond has committed to downtown, and I can already see the synergy here. We did very well with [recent concerts] Nine Inch Nails and Motley Crue. Tim and Faith sold out within a week, and we have high hopes [for attendance] with the 'American Idol' tour here July 29."

The bottom line? There's money to be made, but promoters also face the potential of losing tens of thousands of dollars in a single night. Think about that the next time you're enjoying a show by your favorite artist. S

Cost Breakdown for a Typical Show

Style came up with this projected budget for a show the size of the upcoming sold-out Tim McGraw-Faith Hill show at The Richmond Coliseum:

Hall rental and front-of-house expenses such as security, ticket takers, box office, police, etc: $35,000.

Stagehands: $35,000 (the larger a production the more stagehands are needed for setup, tear-down, etc; can run $7,500-$40,000 at the Coliseum).

Back of house (backstage catering, advertising, etc): $45,000.

Liability insurance: $3,500.

Taxes: 7 percent city admission tax; on a show gross of $980,000 that equals $68,600 (plus city business license taxes).

Artist fees: $500,000 or so; these fees are confidential and vary with every artist and venue. The fees also pay their crew/traveling contingent, musical and electronic/sound equipment, salaries for road managers, fees for personal managers, publicists, buses and transport and accompanying fuel cost, airfares, etc.

Estimate of total expenses: $687,100

Projected revenues: $980,000 (estimate based on $65-$85 ticket sales for 12,000 sold-out seats). — A.T.H.

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