Amid the intensifying war for the supply of goods in the venues: 'The complexes are becoming entrenched'

Artists at the level of popularity of country singer-songwriter Ashley McBryde can sell $16,000 to $20,000 worth of T-shirts and hoodies when they play venues with a capacity of $1,500. Lane Weber, director of merchandising and fan engagement for McBryde's management company, Q Prime, says some venues saw sales of her merchandise drop 20% to 25% during her spring tour — which is typical in the industry but, he says, too much for the services provided in many clubs. “I went to a show the other night and the merch table was next to the bar,” says Weber. “The merch seller had to compete with the bartender trying to sell the drinks. This was a place that took 20% of the sales.”

Weber's complaints, which are shared by many artists and their representatives, are at the heart of a long-running live industry debate over commodity rates. For decades, artists, venues and promoters have haggled backstage over rates as part of every broadcast contract, but they argue the stakes are now much higher. “Since we've come back from COVID, merch numbers have gone through the roof for all genres of music,” he says Crom Tidwell, owner of Crom Tidwell Merchandising in Nashville. And with so much money at stake, artists want a bigger share of their own profits.

“Bands are destroyed,” he says Barry Drinkwater, executive chairman of Global Merchandising Services, which manages merchandise for top metal acts such as Iron Maiden and Guns N' Roses. He adds that the cutback in space is particularly hurting small acts, which tour on smaller margins and often operate their own merch tables. “They need the money that gives them food, gets them to the next show,” he says. “Then the promoter wants to charge them 20% of the gross.”

Live Nation has expressed sympathy for this view. Last fall, trumpeting an endorsement from Willie Nelson, the world's largest concert promoter unveiled its On the Road Again program, which eliminates merchandising fees for artists at its clubs and provides $1,500 a day in gas and cash for the artists. other benefits. Earlier this year, president/CEO of Live Nation Michael Rapino he said Advertising sign that the program had “already helped support 3,000 emerging artists,” and a statement released by Live Nation on May 22 said, “We're incredibly proud of how On the Road Again supports thousands of artists and their crews, with 100% merchandise earnings, $1,500 cash a night for gas and travel expenses and more. Developing artists are the future of live music and we are proud to keep this program going.”

However, complaints about merchandise charges are not limited to clubs. At arenas, stadiums and other large venues, the inside concessions staff handles merchandise sales, and the 20% to 25% cut goes largely to those services. And at least one space gets an even bigger chunk. Drinkwater says New York's Madison Square Garden (MSG) charges artists 30% of their merchandise sales, plus credit card fees. He also notes that rates may be higher in the UK. (A representative for the Garden declined to comment.)

Whether artists operate their own merch boards or rely on in-house staff, managers say they are often dissatisfied with the service they receive, given the cost.

“I don't think they deserve 25% of the revenue,” he says Rick Sales, who manages Slayer, Ghost, Mastodon and more. “Not good value for the money spent.”

Venue representatives counter that long before fans enter their buildings, they negotiate deals with artists, including percentages of merchandise. Not surprisingly, those with leverage get favorable terms. “Every live show is a negotiation,” says a concert-business source. “The band doesn't like the merch rate, find somewhere else to play.” Space consultant Brock Jones, the former GM of Nashville's Bridgestone Arena, adds, “At the end of the day, venues have to make money, too — electricity isn't free, this whole venue isn't free. Venues must recover these costs. An 80/20 merchandise deal is perfectly fair when the venue sells.”

Tidwell agrees that it's a different story in arenas, which are often required to staff union employees on fixed wages. “You have to have a crew to facilitate sales,” he says. “Somebody has to pay for the help.” But he also argues that artists who complain about high percentages of spaces in small venues have a point: “What do you do with your 20%? Just provide a lobby and a table.”

Some small venues, still reeling from the pandemic, have expressed concern that Live Nation's On the Road Again program could force them to follow suit and give up a critical source of revenue. “Temporary measures may appear to help artists in the short term, but in reality they can crowd out independent venues, which provide the livelihoods of many artists on thin margins,” the National Independent Venue Association said in a statement in September.

Arenas and stadiums are where the big money is. On her “The Eras” tour last year, Taylor Swift earned $200 million in T-shirts and other merchandise sold at shows. In its 2023 financial report, Live Nation claimed “double-digit growth” in merchandise and concessions at venues it owns or operates, such as the Moody Center in Austin. Note that the On the Road Again program does not apply to large venues. Drinkwater says a standard cut of 20% to 25% applies and, like MSG, venues sometimes charge the artist credit card fees (usually 5%). “We try with our artists to overcome that,” he says. “Sometimes we get a cut if we can make big sales.”