Versus deals: guarantee vs percentage

How a versus deal works

The promoter guarantees a floor. If the show does well enough, the artist’s percentage overtakes the floor and they take the percentage instead. It is never both: the guarantee is not paid and then a percentage on top. That is a plus-backend deal, and it is a different formula.

artist earnings  =  max( guarantee ,  basis × vs% )

Ties go to the guarantee. If the percentage lands on exactly the guarantee, the artist is paid the guarantee and the settlement says so. In money that is no difference at all. On paper it is: a settlement that says “guarantee” and one that says “percentage” tell the agent different things about the next offer.

The three bases

“$25,000 vs 85%” is not a deal until you know 85% of what. Three bases are in use, and the same percentage on each gives three very different cheques.

• Gross. The face value of every ticket sold, before anything comes off. Rare at a high percentage, common at a low one.
• NGBOR — net gross box office receipts. Gross less facility fee, tax, ticket fees and card fees. This is what “net” means on most paper, and the default in Showforma.
• Net after documented expenses. NGBOR less the show costs the promoter has documented and the agent has accepted. This is where 80% and 85% deals live: the percentage is high because the base is small.

The base of an artist’s percentage is always the expense book the artist can see — the documented figure on the offer, never the promoter’s own sheet — or one show yields two artist cheques. That is why the base is printed in figures wherever a split appears.

A worked example

Room                  2,000 capacity · 1,800 sold at $45.00
Gross                 1,800 × $45.00               =  $81,000.00
Facility fee          $3.00 × 1,800                −   $5,400.00
After facility                                     =  $75,600.00
Tax (8%, inclusive)   $75,600 × 8 ÷ 108            −   $5,600.00
After tax                                          =  $70,000.00
Card fees (3%)        $70,000 × 3%                 −   $2,100.00
NGBOR                                              =  $67,900.00
Documented expenses                                −  $30,000.00
Net after expenses                                 =  $37,900.00

Percentage side       $37,900 × 85%                =  $32,215.00
Guarantee                                             $25,000.00
Artist earns          max($25,000, $32,215)        =  $32,215.00

The percentage won by $7,215. Now the same show and the same 85%, on the other two bases:

85% of gross                  $81,000 × 85%   =  $68,850.00
85% of NGBOR                  $67,900 × 85%   =  $57,715.00
85% of net after expenses     $37,900 × 85%   =  $32,215.00

Thirty-six thousand dollars between the top line and the bottom one, from the word after “of”.

Where the percentage overtakes

On this scaling the percentage side passes $25,000 at 1,575 tickets sold — 79% of the room. Below that the show pays the guarantee and the versus clause is decoration. Above it every further ticket is worth 85% of its net to the artist and 15% to you.

1,574 sold   net after expenses $29,374.78 × 85% = $24,968.56  →  guarantee,  $25,000.00
1,575 sold   net after expenses $29,412.50 × 85% = $25,000.63  →  percentage, $25,000.63

What to watch

• The base decides more than the percentage. Negotiate the base first, then the number.
• A documented-expense base makes the expense list part of the deal. What is not documented does not come off.
• A walk-out cap sits on top of all of this: earnings are capped at the larger of the cap and the guarantee, so a cap can never cut into the floor.
• A bonus is added after the versus is resolved, on every deal type, once gross clears its threshold.