How to Make a Living from Music
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may wish to take 15 percent of the fee up to a certain level. When that level is reached, the commission will reduce to 10 percent. In return for the commission agreed, the booking agent will find live opportunities, negotiate fees and issue contracts on behalf of the artist. The fee for a performance could be a straight guaranteed fee or it could be a guaranteed fee against a percentage of box office ticket sales. For example, the fee might be US$1000 guaranteed or 70 percent of the gross ticket sales (less any sales tax or VAT), whichever is the greater. If the after tax gross ticket sales were US$1400, the artist would receive the US$1000 guarantee only, as 70 percent of US$1400 is US$980, which is less than the US$1000 guarantee. On the other hand, if the gross ticket sales were US$3000, the artist would receive a fee of US$2100, as 70 percent of US$3000 is US$2100, which is higher than the US$1000 guarantee. The difference between the guarantee and the percentage is often referred to as the ‘overage’. In this example the overage was US$1100.
It is often the case that there will be different booking agents in different territories, but some of the larger booking agencies, such as William Morris, CAA or The Agency can operate on a worldwide basis. Sometimes an artist will have one booking agent in Europe and another in the US. The rest of the world might then be divided between these two agents, depending on who has the best contacts. The US agent may also want to book the other American territories including Canada, Mexico and Latin America, for example, whereas the European agent may have better contacts in Australia and Japan.
As the music industry has evolved, it is unusual for there to be a booking agency agreement with the artist. In some countries it is actually illegal. This means that the booking agent has to work hard to retain successful artists, as they are always free to move on to another agent if they wish.
360 degree recording agreements typically include that a percentage of the gross income on live work (usually 10%) goes to the phonogram producer. Some managers have therefore been insisting that booking agents take a 9% commission rather than the normal 10% in situations where the phonogram producer is taking 10% of the gross, i.e. the booking agent is obliged to take 10% of 90%, which equates to 9% of the gross.