Live Nation and AEG want to move toward a deal structure more like in clubs, where acts receive a percentage of tickets sold, with less guarantees.
Like record labels, concert promoters have long operated on a model in which they offer advance payments against a percentage of sales — with artists getting paid more when shows do well and often keeping the guarantee when they don't. In addition to bankrolling the business, in other words, they bear most of the risk. But the concert business that's expected to return at some point in 2021 won't only look different, due to having at least some coronavirus precautions in place — it will almost certainly operate in some new ways as well. There will be fewer venues and more negotiating leverage in the hands of giants Live Nation and AEG — and a major push on the part of promoters to shift risk toward artists.
Restarting a concert business that has been dark for about a year will be complicated: Artists are eager to get back on the road, desirable dates will be in short supply, and competition will be brutal. The risks will be both harsher and harder to assess — especially in the event of another outbreak. Understandably, the promoters bankrolling big shows will be cautious. There's also a widespread sense that they're using this crisis to make structural adjustments in what many believe has become an increasingly unsustainable business model.
"All deals in 2020 will be renegotiated regardless if they went on sale before the start of the crisis," wrote AEG Presents president for North America Rick Mueller in an April staff memo detailing how AEG would handle rescheduled club and theater shows. It said that artists could be offered lower guarantees, with earnings tied more closely to ticket sales. The memo also said its deals would be "all-in," meaning all expenses, from artists' costs to payments to opening acts, would come out of the offer. Also on the chopping block: support for album bundles, which added music, and costs, to ticket purchases. (Since then, Billboard has changed its chart rules; it now only counts albums purchased as paid add-ons to tickets.)