💡✍️ ADN #010: The True Cost Of Touring

Hey Friends -

Welcome to the Artist Development Newsletter.

Every Sunday, I send an email providing actionable tips for artists and industry on one area of the music business.

Last week we talked about how to “fit out, not in.”

You can re-read last week’s newsletter here if you want to refresh.

Today we will break down the true cost of touring.

Let’s jump in.

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Touring is expensive.

It just is.

You can do it cheaply for a while, but once $ starts to come in, most artists want to upgrade their comfort, crew, and show.

And it adds up quickly.

Today let’s break down a hypothetical annual income statement for an artist that grosses 2 million dollars annually.

Show Guarantees + Overages

$1,800,000.00

Shows

100

Average Gross Earnings Per Show

$18,000.00

Merch (Net)

$200,000.00

($2,000.00 average per show)

Total Show Income

$2,000,000.00

Commissions

Booking Agent

10% of gross = $180,000.00

(*note* booking doesn’t commission merch sales)

Management

15% of gross = $300,000.00

Business Manager

5% of gross = $100,000.00

Total Commissions

$580,000.00

Travel

Airfare

$60,000.00

Bus Rental

216,000.00

($18,000/month)

Bus Repairs & Maintenance

$19,500.00

Bus Supplies

$9,500.00

Trailer Rental

$12,200.00

Fuel, Tolls, & Parking

$72,450.00

Hotels

$40,250.00

Per Diem + Meals & Entertainment

$17,500.00

Total Travel

$447,400.00

Production

Lighting

$16,600.00

(40 Weeks @ $415/wk)

Sound

$37,000.00

(40 Weeks @ $925/wk)

Stage/Set/Supplies

$11,500.00

Total Production

$65,100.00

Payroll

Band Wages

$250,000.00

($50,000.00 x 5 band members)

Crew Wages

$190,000.00

($47,500.00 x 4 crew)

Driver Pay

$125,000.00

Payroll Taxes

$31,260.00

Total Payroll

$596,260.00

General Admin Expenses

Equipment Storage, Repairs, & Rentals

$12,500.00

Commercial Insurance & Legal Fees

$15,000.00

Office Expenses

$5,000.00

Rehearsals

$2,500.00

Services

$10,000.00

State Taxes

$18,000.00

(Estimated based on 1% of concert income)

Inflation/Other

$21,000.00

(Estimated based on 2% of gross expenses)

Total General Admin

$84,000.00

Total Expenses

$1,772,760.00

(88.6%)

Net Income

$227,240.00

(11.4%)

As you can see, the money gets spread across many different buckets, and every dollar counts.

In the example above, I’m outlining what it might look like for a solo artist.

They don’t have to split their net income with anyone after all expenses are covered.

So, their net income landing at 11.4% is a pretty healthy cut of the gross.

In another scenario, there might be a band with multiple members.

Imagine having a 4-piece group with additional hired musicians (think the Beatles + hired guns.)

Their net income would be split across 4 people.

That $227,240.00 becomes $56,810.00.

Have you ever seen a successful band playing a sold-out show still in a sprinter or a 15-passenger van?

It’s not because they don’t dream of rolling down the road in a tour bus living out their rock n’ roll fantasy like Stillwater from the movie Almost Famous.

It’s the pain of paying 18k a month for a bus lease and 125k per year for the driver when they are scrapping by on less than half of that themselves.

There is a lot of money to make touring if you are smart about where you spend it.

I encourage artists to be prudent with their expenses.

Remember that every extra hotel room is money out of your pocket at the end of the year.

Here are a couple of other tips:

• If you have a recurring monthly expense (light rentals, gear, monitors, etc.) for more than 12 months, consider buying that item outright.
• Then, rent it out to other artists when you’re off the road.
• If you are in a 12-month bus lease, but you have two weeks off in one month?
• Sub-lease your bus to another artist.

There are many ways to shave a few dollars and, in turn, make a few dollars.

You’ve got to be diligent to make sure you’re making yours.

See you next Sunday!

Neil Mason

Artist Development

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