Understanding Fee Based Performance Revenue Agreements

When it comes to how orchestras structure earned income by way of fee-based performance activity, not all agreements are created equal. Interestingly enough, this is one of the few areas within arts administration that share far more with the artist side of the labor equation than not because in the end, the shared goal is making sure performance-based revenue meets or exceeds minimum revenue goals.

For example, it doesn’t matter if you’re talking about an 82-piece symphonic orchestra or a string quartet, the basic types of deals those groups strike with presenters is nearly identical. The only thing that changes are the number of zeros at the end of the final payout.

Perhaps unsurprisingly, the way these deals get structured can become convoluted.

In fact, it’s one component within the business I’ve always struggled explaining to anyone outside looking in using any sort of concise description. Instead, they invariably turn into an academic lecture.

Fortunately, Joe Patti published what must be one of the most useful resources for how these deals can be structured.

He even provides an example of one structure I use quite often when both presenter and artist need a balanced risk/reward structure: a guarantee plus percentage deal. In addition to a description, he put together a wonderfully accurate visual example that lays out in line-item expense/income fashion how that deal can work for both parties.

I can’t recommend this article strongly enough and it’s an equally wonderful resource for both arts admins and self-employed artists.

Common Deal Structures For Touring Groups

About Drew McManus

"I hear that every time you show up to work with an orchestra, people get fired." Those were the first words out of an executive's mouth after her board chair introduced us. That executive is now a dear colleague and friend but the day that consulting contract began with her orchestra, she was convinced I was a hatchet-man brought in by the board to clean house.

I understand where the trepidation comes from as a great deal of my consulting and technology provider work for arts organizations involves due diligence, separating fact from fiction, interpreting spin, as well as performance review and oversight. So yes, sometimes that work results in one or two individuals "aggressively embracing career change" but far more often than not, it reinforces and clarifies exactly what works and why.

In short, it doesn't matter if you know where all the bodies are buried if you can't keep your own clients out of the ground, and I'm fortunate enough to say that for more than 15 years, I've done exactly that for groups of all budget size from Qatar to Kathmandu.

For fun, I write a daily blog about the orchestra business, provide a platform for arts insiders to speak their mind, keep track of what people in this business get paid, help write a satirical cartoon about orchestra life, hack the arts, and love a good coffee drink.

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