A Tour Accountant takes care of all things financial on the road — assisting in putting together a tour budget before the tour hits the road, per diem, settling shows, settling with hotels, bus and truck drivers, assisting with tax issues, etc.
Is this a role that is often combined with other touring functions or does it ever stand alone?
On smaller to mid-sized tours, this position is usually combined with the Tour Manager role. On tours where I’m Production Manager, I usually do this role as well. I love numbers!
OK – so let’s start from the very beginning. And I know that this may sound like a silly question but bear with me. How do tours make money? What are all the touring revenue streams?
With record labels now being streamlined and with the advent of digital music downloads, many acts are going the “doing everything in-house” route and cutting out record labels altogether. Some examples would be Prince, Ani DiFranco, Radiohead and many others. They’re doing everything on their own and are only responsible to themselves thus giving them more creative freedom as well as thinking out of the box to promote themselves. With record sales dwindling severely over the past few years along with pirated music, record companies will soon be dinosaurs and the way that many artists make money is by touring. With record label support all but non-existent, acts touring now are finding that touring is the ONLY way to make money now and they’re finding ways to do that.
The smart tours make money by streamlining personnel, having touring crew doing multiple jobs thus saving on extra per diem, hotels, flights and salaries. Acts are now routing their tours in a more efficient manner thus saving on trucking and bus fuel costs (with gas prices being astronomical now, this is one of the best cost saving ways on a tour). These same acts are now no longer touring the huge 10 – 20 trucks as this is no longer financially feasible.
Some touring revenue streams now come by digital downloads (Itunes and the like). VIP ticketing is now the new rage and you now see many acts doing this. Selling the premium experience of having front row seats, getting to come backstage, meet the artist, take a photo with the artist and some acts now are having dinner with the VIP’s who are buying these packages. It’s a HUGE revenue income.
And does the artist get all of that upfront or are those all split with different vendors? How’s that work?
Out of an artist’s guarantee, he has to pay touring staff, trucks, buses, lighting, video, audio, staging, catering, security, local stagehands, taxes and on and on.
So going into a tour, you have an idea of how much the tour should gross even before you start selling the tickets, no?
Correct, but you should always some padding in your tour budget for the unexpected things that happen on the road.
Ahh. And if you can estimate how much a tour can make, then can you also estimate how much a tour will spend?
So is that how you make a touring budget? Is that where you start from?
Then what? How do you decide on who to hire and for how much?
Many acts already have a tour and production managers in place. The Production Manager will see what the routing is and based on the size of the production will know which positions will need to be filled (i.e. stage manager, FOH engineer, monitor engineer, etc.). Management will set the guidelines on how much they’re willing to pay for each position based on the guarantee and what the artist would like to gross at the end of the tour after all expenses.
What other things come up that you constantly have to keep you eye on as a tour accountant?
Local taxes in each city, state and country. Getting tax waivers in advance definitely helps the artist in the long run. I’ve found that other things I keep my eye on are additional hotel rooms, flights and ground transportation (i.e. family members coming out on the road, wives /girlfriends /boyfriends /husbands, etc.).
How similar is this to me keeping my own personal budget for my family?
I’d say very similar!
And does the tour accountant handle other financial decisions for the band or is that the realm of the business manager or general manager?
That’s usually the business manager’s role as they tend to keep an eye on the tour overall. The really good ones give you heads up and feedback when you’re putting together your tour budget.
Lastly – what makes or breaks a tour financially speaking? And what is an average profit margin that a tour will net? Is that relatively constant or does it really vary act by act?
In talking to other tour accountants and in my own experience, I’ve found that it’s the production (too many trucks, buses, touring personnel, etc.) and artists being too unrealistic and wanting to have every gag known to man — which leads you back to too many trucks, buses, etc.!
The average profit margin varies from act to act. Everyone is different on what they want to get out of the tour.
Thank you David!
DAVID ’5-1′ NORMAN is a veteran Tour Manager, Tour Director, Production Manager and Tour Accountant. He has over 25 years of international tour experience with some of music’s top acts. He is currently Tour Manager and Tour Accountant for John Legend, a role he has enjoyed since late 2008.
In addition to experience with specific artists, David has also worked on special projects including The Grammy Awards, The Latin Grammy Awards, Soul Train Music Awards, Latin Billboard Awards, The British Music Awards, Live 8, The Presidential Inauguration Gala, Fashion Rocks Awards, CNN Heroes and many others tv shows and festivals.
This interview was originally posted at: The Economics of Touring | Ultimate Ears