Join Richard Stim for an in-depth discussion in this video Touring budgets, part of Music Law: Managing a Band's Business.
- Deciding how and whether to tour comes down to budgeting. Hopefully, you're familiar with the principle, but if not, preparing a budget consists of two columns: incoming, all income predicted for the tour, and outgoing, all expected touring expenses. Your goal is to prevent expenses from exceeding income, and to still have a reasonable touring experience. If your expenses exceeding your income, referred to as a tour shortfall, you obviously need to cut costs or increase income.
If you're assigned to a record label or a music publisher, you may be able to get tour support, which is financial help from the company to supplement the shortfall. Any money you get will probably be deducted from future royalties. Without tour support, you'll need to cut expenses when you can. For example, all touring bands would benefit from having a road manager and tech roadie. A road manager, sometimes referred to as a tour manager, handles the day-to-day tour details, and sometimes drives the van.
But tour manager salaries are often $1,000 or more per week, plus food and hotel rooms. And tech roadies or drivers may charge $500 or more per week. If you forego a tour manager and tech driver, your band could save thousands, but the tour may become more challenging as band members will have to take up the driving and tour details, sometimes resulting in sleep deprivation and frayed nerves. Obviously, more money can be saved if your band owns a van or truck, otherwise expect to pay $100 or more per day for a passenger van rental or a cargo van.
You can determine gas expenses by calculating your total mileage, and dividing it by the van's estimated miles per gallon. You'll find that information at sites like: mpgbuddy.com Rental vans have other costs as well, such as insurance and sales tax. Per diems, which means by the day, are payments to the band and crew for daily living expenses such as food. Expect to spend at least $35 to $100 a day for per diems for each person.
Often, there is not enough tour income to pay band members a salary on the road. If your band plans to use hotels, motels, Airbnb, or BRBO, expect to pay anywhere from $100 to $200 a night for a double room or more, depending on accommodations. Obviously, crashing with friends or sleeping in the van is a major savings, but that, too has its obvious downsides. Other possible expenses include equipment rental costs, air fare and air freight costs, and booking agent commissions.
You should also factor in a cost overrun, a percentage, usually five to ten percent of your expenses, to handle the unexpected. Dealing with tour shortfalls requires creative thinking. For example, some bands travel with a cooler and save the unused backstage refreshments for the next day. Hopefully, as your band's booking value increases, you can abandon some of these austerity measures. By the way, I mentioned booking agents earlier. A booking agent arranges the tour and negotiates payments with the venues.
In return, a booking agent usually receives 10% of your income from live performances, referred to as concert grosses. In some states, booking agents are regulated, and in California, they must be licensed. Normally a band signs an exclusive arrangement with a booking agent. That is, only that booking agent can book the band as long as that agent represents the band. It's recommended that your band limit these arrangements to three years or less.
It starts with what it means to be the manager of a band, and what types of business structures are available for bands. Once you've decided on a business structure, you can create a band partnership agreement that covers voting rights, postbreakup scenarios, new members, and terms for resolving disputes. Richard also exposes potential sources of disputes, like ownership of the band name, songs, equipment, and recordings. He includes advice on negotiating solid band contracts and managing financial basics: taxes, income, cash flow, and bookkeeping. Finally, he'll address how to protect your work, including your copyrights, band name, and songs, and explains how to find a lawyer—and save money on attorney fees.
DISCLAIMER: This course is taught by an attorney (or other instructor) and addresses US law concepts that may not apply in all countries. Neither LinkedIn (including Lynda.com) nor the instructor represents you and they are not giving legal advice. The information conveyed through this course is akin to a college or law school course; it is not intended to give legal advice, but instead to communicate information to help viewers understand the basics of the topic presented. The views (and legal interpretations) presented in this course do not necessarily represent the views of LinkedIn or Lynda.com.
- Putting together a band partnership agreement
- Working out ownership disputes
- Limiting band liability
- Protecting your copyrights and band name
- Hiring a lawyer