The 2X/ 4X Guideline

Inevitably, as you try to make money playing live, you will run into the question of what might be a reasonable amount of money for your act to bring in per night. (This question is also tied to what rooms you can expect to work in.)

Now, of course, there are no hard and fast rules. It’s not like everybody in the music business gets together and decides how live music payouts are going to work. However, as someone who has been “behind the scenes” on the money side of small venues and concerts, I can say that there’s some basic math which starts to make sense over time.

I call it “The 2X Net/ 4X Gross Guideline.” Here’s how it works:

A band’s monetary clout is directly proportional to the real value they offer the venue or event organizer. For an act to ask for a specific payout amount, the real value they represent to the venue or event should be 4X their asking price. The exception to this is when the band, in and of itself, is THE draw to the event. In that case, the multiplier is only 2X – but venue or organizer expenses should be factored in.

That probably doesn’t make any sense without examples, so…

Let’s say that you’re booked for a private party. You’re being paid to be entertainment for guests who will (very likely) show up whether you’re there or not. The overall event value, which includes things like space rental, food, decor, etc, is $4000. In such a case, it wouldn’t be out of line for you to ask for $1000 as a payout to the band, as $4000 is 4X $1000.

Or, let’s say that you’re looking to get booked at a club, and you want a guaranteed minimum payout of $750 for the night. The club may or may not charge a cover, but they will definitely be selling drinks and/ or food. For your request to be seen as reasonable, the booker has to be pretty danged sure that bringing you in will generate at least $3000 of revenue for the club. ($3000 is 4X $750.)

Finally, let’s say that a small theater is going to bring you onto a ticketed event. The only major source of revenue will be admissions. If you’re looking to be a $500 act for them, then you need to be able to bring in enough of a crowd to create ticket sales that cover your share of the production expense, plus $1000. ($1000 is 2X $500.)

Now, again, this isn’t some system of rules that everybody will recognize. However, I do think it will put you in the ballpark of what’s reasonable.

There are a couple of keys to using this idea effectively:

1) Remember that, for non-ticketed events, “real value” is something decided entirely by the venue or organizer. For some folks, it’s going to be all about how much food their restaurant can sell if you’re on hand. For other people, all they care about is that you’re really killer at playing tunes they like. It’s up to you to work with the booker in figuring out what “real value” means to them. If you don’t figure it out, there may be a large mismatch in terms of what you consider “real value,” and how the venue sees things…which can lead to real heartburn later.

2) Ticketed events can, on a regular basis, be run fairly lean. This is part of what creates the “push-pull” of the multiplier being lower, but expenses having to be taken into account. Bars and clubs often have high overhead, but they can factor in their overall expenses to the consumables they sell, and also carry a bit of momentum from sales not directly related to your appearance. At the same time, a certain level of “built in” draw can exist (due to the business model being something other than live music), which weakens the bargaining position of musicians. A theater or similar venue, on the other hand, doesn’t generate any income until a show plays in the room – and even then, it can be hard to predict how any particular performance will do. It’s not at all unreasonable for expenses to be a direct part of the payout equation. The flipside is, if you are very definitely THE reason that the patrons showed up, you have much more power and influence over the show’s success – and you should be paid as such!

At all points, a reasonable payout expectation comes from being able to figure out the scale of what you bring to the table.