Lonely Road: Indie Promoters Fight to Survive Amid Rising Talent Costs, Heated Competition With Majors

ISSUE 21 2019 - COMMISSIONED FOR ONE TIME USE ONLY
Illustration by Remie Geoffroi
     

As indies watch their contemporaries drop out of sight, they're also seeing AEG and Live Nation snap up more national club deals.

Earlier in September, longtime independent promoter John Reese filed for bankruptcy on behalf of his company Synergy Global Entertainment (SGE), after what the bankruptcy documents call a "perfect storm of adverse market conditions and a massive drop in ticket sales" led to several event cancellations, including the Mad Decent Block Party scheduled for July at Gillette Stadium near Boston and several dates on the Rockstar Disrupt Tour.

The documents show that Reese ended 2019 with nearly $8.4 million in debt, and over 100 unpaid creditors, including staging companies, concessionaires, ticket companies and talent agencies.

Sources close to Reese say he fell into a trap now common among even established indie promoters: overpaying for talent and hoping to make up the cost by booking grand venues that could pack in more fans, but which turned out to be bigger than they could fill. Take the 12-year-old Mad Decent Block Party, with headliners Major Lazer, Billie Eilish and Miguel: Sources say Reese was able to sell 25,000 tickets, which for most first-year events would be a huge success. But because Gillette Stadium can host up to 60,000 fans for concerts, the number of tickets Reese needed to sell to break even was so high, the event was doomed from the start. The same went for the Disrupt Tour, which featured The Used, Thrice and Sum 41 and would have done solid business in clubs and theaters, but couldn't sell the number of tickets needed to sustain an amphitheater tour.

Reese was planning over 30 events for 2019, with a total attendance of 2 million. But those two flameouts put him out of business, and left several agencies with holes in their books. Records show that SGE owes $180,000 in artist fees to Paradigm; $162,000 to WME; $1.7 million to Frontgate, which had to issue refunds for Reese's canceled events; and $100,000 to Groupon.

Reese is far from the only promoter to take a hit this year. Woodstock 50 suffered the most dramatic collapse, despite the efforts of indies like Superfly and Danny Wimmer Presents to save it. Other indie festivals, like the Bay Area's Treasure Island, Chicago's Mamby on the Beach and the inaugural Roxodus in Edenvale, Ontario, were canceled due to slow ticket sales.

Meanwhile, Live Nation and AEG reported a combined $5.2 billion in ticket sales in 2018, according to Billboard Boxscore; the other 23 companies on Billboard's year-end top promoters list combined to take in just $1.7 billion.

As indie promoters watch their contemporaries drop off or sell out, they're also seeing AEG and Live Nation snap up more national club deals, explains promoter Stephen Chilton of Phoenix-based Psyko Steve Presents.

"It used to be you only saw national tour deals with major acts. Now you're seeing them with acts playing 200- to 500-capacity rooms with little tour history," says Chilton. "If acts are jumping to national tour deals after only one or two plays in a market, it's hard for any indie to build a quality relationship with those acts and their teams."

Live Nation has also quickly grown its ticketing footprint since merging with Ticketmaster in 2010, and today many promoters use its affiliates, like TicketWeb and Frontgate, to fulfill orders. And while many promoters say they avoid competing directly with Live Nation for national tours, they argue that the concert giant's ability to spend lavishly on talent has driven up the cost of booking artists and created an environment where indie promoters feel they have to overpay in order to fill venues.

"The biggest threat indie promoters face is the inability to say no," says Jim Cressman, head of Canadian concert promoter Invictus Entertainment. Cressman is one of the few indies still doing national tour deals for artists like Brett Kissel and Kip Moore, although he says he competes on service and not the guarantee promised to artists. "It's our job to be indispensable, and if we do that properly, we'll secure loyalty as a byproduct of the service we offer," he says.

Cressman has had several offers to sell his company to a major concert promoter, but has turned down multiple bids and diversified his business into consulting and third-party booking to avoid getting upended on a tour deal and ultimately having to sell to Live Nation or AEG.

Others see a different path forward — together, if need be. Stephen Sternschein, who owns Empire Control Room and the Parish in Austin, Texas wants indie promoters to stop seeing themselves as pariahs in an increasingly consolidated live music industry and envision themselves as part of something bigger. Sternschein says indie concert promoters need to start thinking collectively after the recent wave of consolidations, which includes Live Nation buying up indie promoters like Emporium Concerts and L.A.'s Spaceland Presents.

That means more club owners working together to create touring offers for artists to play independent venues and festivals, develop cohesive networks that can include multidate tours and offer marketing support that goes beyond any single show or promoter.

"Being an indie promoter is not a comfortable job most of the time — we bet on bands like gamblers bet on horses," says Sternschein, adding that promoters should act more like venture capitalists who own a piece of the action "and less like track rats."

Several promoters also point to booking agencies as part of the problem, saying that insisting indie promoters overpay for talent to the point of bankruptcy hurts competition and ultimately leaves fewer talent buyers available to make offers for bands.

"Once artists start making national tour deals directly with the promoters, it's kind of hard to argue that a booking agent is needed or should be paid a commission," says one insider who worked on the SGE bankruptcy. "If there's only one or two promoters left, why can't the manager go direct to the promoter and do a deal?"

Some acts, including Taylor Swift and U2, have been doing that already, although the practice of forgoing an agent to deal directly with a promoter is still limited to top artists.

Promoters like Chilton say that sometimes the answer is: If you can't beat 'em, befriend 'em — and hope they don't clobber you.

"Luckily, I have a good relationship with both Live Nation and AEG and have been able to get cut in to quite a few shows," says Chilton. "I know what works in the Phoenix market and know that's valuable to the big promoters. But I also understand there's nothing stopping them from coming into town and competing against me."

This article originally appeared in the Sept. 14 issue of Billboard.


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