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Archive for the ‘Settlement’ Category

Two options with blank road signs

Greetings after a bit of a hiatus, and welcome to the 2014-2015 touring season!

Actually, the season pretty much started back in September, so we’re in the thick of it now!

But how did we get to this point? Hundreds of touring engagements will make their way across North America this season, as they do every season. What are the basic mechanics of the business that make that happen year after year? What’s the timeline?

Well, aren’t you glad you found The Road 101, because it is here where you’ll find out how that wholllle process works! A process that is a long, complex, ongoing cycle. There are many places I could begin, but for this post, I am going to begin discussing this cycle with the Tony Awards Nominations as a starting point, which typically take place at the end of April.

There are many types of shows that are out on The Road in a season and it is often a foregone conclusion that many of these will be back out there — the blockbuster, the second and third year tour, the non-Equity tour, the special attraction, and the smaller Off Broadway type show that has built its brand over many years, are just some examples.

Then, there are the new shows coming from Broadway in the current season. So, in this case, we’re talking the 2014-2015 Broadway season. These shows are the touring question marks. Which ones will make it out on The Road in 2016-2017? That’s right. Wrap your head around that for a second so you can follow along. The shows running on Broadway in 2014-2015 are being considered for touring in 2016-2017.

The Broadway 2014-2015 season is still evolving as I write this post, and booking agents (some already representing some of these shows) and presenters are watching closely which Broadway shows will make it through the season and rise to the top. When the Tony nominations come out in April 2015, that is a moment when certain shows could get a key boost, especially those shows nominated for Best Musical. Though agents and presenters are seeing shows throughout the entire season, it is typically during Tony Awards season when many in the industry check out Broadway to see which are most likely to end up being viable touring properties. A lot of this theatre-going happens during the annual Spring Road Conference, which typically takes place between the Tony nominations and the Tony Awards. Now, winning a Tony Award this season does not necessarily guarantee that a show will go out on tour for the 2016-2017 season. There are many factors that a producer and a general manager need to take into consideration before deciding if their show is viable enough for a tour:

  1. Did the show make it through Tony season in good shape both from an awards standpoint and a box office standpoint?
  2. Did the show make a good impression on enough presenters?
  3. Can the show offer a deal that presenters can work with?

Okay, so, the 2015 Tony Awards have happened and we are now in summer 2015. The blockbusters, second year tours and non-Equity tours are largely routed and slotted in for the 2016-2017 touring season. The booking agents are also more clear at this point regarding which of the new 2014-2015 Broadway shows they represent will likely make it out on The Road in 2016-2017, and which will fall by the wayside. The final part of the 2016-2017 touring season programming process is now in full swing as booking agents and presenters work through final deals and tour routing. Again, these interactions happen throughout the year, but it is during the summer and into the early fall where all programming MUST be finalized.

Why must programming be finalized by fall 2015? Because it is at this point that presenters need to then begin figuring out how they want these shows to be priced. It is important to be thoughtful about all the details that go into pricing and to consider all data and history available to maximize profit. If an engagement is not priced and discounted correctly at the outset, there is the chance that the engagement could lose money, or, conversely, it may make money, but if it was underpriced and over-discounted at the outset there is a chance of “leaving money on the table,” meaning even more money could have been made. The opportunity to maximize profit is then further exploited via dynamic pricing.

So, once the presenter decides on the pricing for a show, which includes prices for singles, subscribers and groups, the presenter then sends this pricing to the show’s booking agent for consideration, which oftentimes ends up turning into a back and forth negotiation. Again, multiply this step by many, many engagements that need to go through this detailed process. For a large company like Broadway Across America with numerous markets, the ticket pricing process takes several months to complete. During the pricing process, things move fast and timing is everything, as prices need to be agreed to by the show and the presenter and locked in quickly so the marketing teams can then get to work on creating the brochures, which will include these prices and discounts, and which need to go into the mail to subscribers by certain established deadlines.

The time is now winter of 2015-2016. The 2016-2017 pricing process is beginning to wind down as we move into March. The booking agents and presenters are making any final little programming and deal tweaks to the 2016-2017 season while at the same time are also in the process of booking the 2017-2018 touring season. Meanwhile, as all this is happening, don’t forget, the 2015-2016 engagements are currently out on the road on tour requiring constant management through the end of their tours in May or June, each engagement culminating in its own final bravo – settlement.

And now, it’s Tony Awards season again. Which brings us back to where we started.

Pfew. Did you follow all that? Yeah, I’m still learning to wrap my head around it, too, and I WORK in the business!

In the end, this is just a broad overview of how the booking and pricing cycle works as I have come to understand it. It is likely that others in the industry would have other details to add, but this should give you a pretty good sense of the general timing of it all.

If you have questions, feel free to email me anytime at robin@theroad101.com. If I don’t get back to you immediately, please forgive me. I’m probably swamped in pricing for 2015-2016.

woman-tearing-hair-out

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concert-promoter-settlement-sheet

I tend to keep things pretty simple here at THE ROAD 101. This blog is designed to give basic insights into the business of commercial theatre touring without being overally technical. That said, I found a useful link at Actors’ Equity Association called TOURING 102 that presents a few hypotheticals showing how a producer’s and presenter’s bottom lines are affected depending on different guarantee and gross revenue scenarios. It’s a little more advanced than what I typically get into here, but, hey, it’s good to exercise those brain cells once in a while! The Touring 102 post also gives some good, general insight into the risks and profit requirements a producer needs to consider when building and booking a tour, as well as what a presenter might generally take into consideration when creating a season.

If the lexicon is unfamiliar, you should be able to find all the tools you need right here at THE ROAD 101 to help you! Be sure to check out THE ROAD 101 Glossary for a solid list of definitions. Also, be sure to input terms into THE ROAD 101 search field, and you will likely find related posts containing the answer you are seeking.

The graphic above is a blank settlement that is actually for concerts rather than theatre, and includes some line items that are not applicable to this discussion, but does share some basic similarities with a theatre settlement and may be a helpful visual to get a sense of what a settlement looks like.

I recommend you have a calculator handy! It will help you understand better how the Touring 102 author arrived at his or her various numbers.

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Amy Polan Clarke

Amy Polan Clarke

There’s a lot going on behind the scenes before, during, and after an engagement takes place in each and every market. And in this case, when I say “behind the scenes” I don’t mean the backstage area before, during and after a performance. The behind the scenes action I’m referring to is related to all the complex operational details that need to be hammered out and continuously managed — deal points, contracts, technical riders, estimated engagement expenses, gross advertising budgets, ticket pricing, ticket discount strategies, and settlements, just to name a few —  and it is the theatrical booking agency that is right in the center, literally. Theatrical booking agencies solely represent the producer of a tour, but they are also the main liaison between the producer and the presenters licensing the show. So, booking agency engagement managers need to find just the right strategic balance of negotiation and diplomacy skills, and also be able to stay on top of a lot of information related to all the different shows they are booking from their roster, and all the vastly different presenters, markets and venues they are dealing with on a daily basis.

I’m lucky to know one of THE best theatrical engagement managers and Director of Operations in the business — Amy Polan Clarke. I got the chance to catch up with Amy recently over email and ask her some questions about the work she has done in the touring industry, her perspective with regard to the current state of The Road, and how producers and artists out there might connect with a booking agency and potentially get agents interested in their projects.

THE ROAD 101: Thanks so much for taking the time to answer my questions, Amy. Can you describe in broad strokes what a theatrical booking agency does, and what your function has been as a Director of Operations?

AMY POLAN CLARKE: A theatrical booking agency is hired by a Producer and/or General Manager to sell, within a specified territory, performances of the Producer’s production of a theatrical show. After the agent would negotiate the dates and financial terms with Presenters in various markets, it was my job to create an analysis of the offers and submit them to the Producer, looking at the financial terms, ticket prices, history in the market, estimated expenses, Producer’s income potential and the buyer’s break even. We would go back and forth between the producer and the buyer negotiating the deal points and once they were acceptable to all, I would negotiate and create contracts outlining and formalizing the deal. I also kept a running tally of the Producer’s total estimated income for the tour to ensure that they would meet their weekly nut and updated agents as to the status. Once the tour actually began, I acted as the liaison among the agents, Producers, marketing reps, and tour personnel to keep it running smoothly. I also verified settlements and maintained summaries of grosses, expenses, income, and commissions for all performances.  We did not have a database system, so I created spreadsheet after spreadsheet for all the data.  In fact, some producers insisted that other agencies use my formats (this happened to me in the concert industry also – to this day, people are using settlement forms I created years ago). I also did operational tasks for the company such as dealing with new hires, vacation days, maintaining the website and creating the company’s annual roster brochure.

TR101: I see you’ve also been an Associate General Manager. How does that role differ from an operations role?

APC: As an Associate GM, I did similar tasks with negotiations, contracts and settlements, however also auditioned and hired talent; hired road crew, coordinated marketing and publicity campaigns and materials, secured visas and insurance for cast and crew, and handled all financial aspects of the production – budgets, cash flows, royalty statements, and P & L reports to investors. I also approved all tour expenditures and oversaw the sales and inventory of merchandise on the tour. It was much more hands-on to the actual production than being at an agency.

TR101: Wow, you certainly know your stuff!  How did you first get into the theatrical booking industry?

APC: I was the Senior VP of Touring for a concert promotion/producer/management firm where I worked for 30 years (started at age 20). I booked tours and went on the road with shows as a Tour Manager/Tour Accountant (similar to Company Manager). But in 2002 the company was bought and closed down.  I then worked as the Associate GM for an off-Broadway producer (until the show went bust), and I discovered I liked the theatrical business better than the music business so I pursued it.  Simma Levine of On the Road Booking and I had some business friends in common and she needed help.

TR101: A lot of artists and producers consider attending booking conferences in order to meet booking agents, and network. Do you have any opinions about the various booking conferences out there, i.e., WAA, Midwest Arts Conference, PAE, APAP, etc. as far as their usefulness to bookers, and to producers, or artists, looking for bookers?

APC: I think it’s important for agents to get out and meet the people you talk to on the phone all the time. That being said, I’m not sure that all that many new bookings actually come out of it. But for artists, they present a great opportunity to show your stuff to agents and/or producers who might potentially represent you. Getting them to actually come to your showcase is a whole other thing. It’s all very hectic.

TR101: From your perspective, what are some of the biggest challenges facing a tour’s ability to turn a profit these days?

APC: Same thing as everyone else’s challenges in making a profit these days – you want to put out a quality project, but expenses are too high, sales are too low, and you have to keep the ticket prices low outside of the larger cities. And touring also has to deal with transportation costs, over which they have very little control. Sponsorships have also fallen by the wayside due to the economy. One thing I think the theatrical industry does better than the concert industry is offering so many varying ticket prices – subscriptions, groups, students, promotions, dynamic pricing, etc. The concert industry does very little of this. On the other hand, it makes it really difficult for the producer to know what his income might be. Theatre also doesn’t seem to have the scalping issues that concerts have, which is one of the reasons some concert ticket prices are so high (the theory being that the scalpers will get this price, so the band might as well get it).

TR101: Do you have any suggestions as to how a theatre producer, or theatre artist, might get their project noticed by a booking agency?

APC: Find a way to get them excited about the show. Of course everyone wants/needs to make money, but if someone is passionate about what they’ve seen, they just might invest their time in you and try to build you into a money maker.  You’ve got to have something that moves them, though.

 

*  *  *

Amy Polan Clarke is a veteran of the live entertainment industry, having worked all sides of the spectrum in both the theatrical and concert worlds – for venues, promoters, producers, performers, and agencies. She has toured as Business/Tour Manager for musical performers from the Grateful Dead to Sarah Brightman and has worked on theatrical touring shows such as Hairspray, Movin’ Out, The Producers, and Spring Awakening.

Email Amy: amyclarke@comcast.net

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The Road to Commerce

The Gammage BO2

ASU Gammage Box Office

Greetings from Tempe, AZ! I’m here settling the third week of a four week engagement of the National Tour of PHANTOM OF THE OPERA at The Gammage Auditorium. I was fortunate to get in to see the performance last night. The run has been going well, and last night appeared to be sold out, or nearly so. This reminded me of how much The Road contributes to local economies. The Gammage has nearly 3,000 seats, and when shows come through town, especially popular shows like “Phantom,” the economy here benefits — the restaurants, the parking lots, the local merchants, the hotels, etc. Jobs are also created. This, of course, isn’t news, but I think sometimes we forget that the arts are also very much a viable business, contributing more than just to the local culture. This may not be so noticeable in boom times, but it is especially clear now as businesses around the country continue to struggle.

In fact, here’s a recent article on just this very topic.

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RENT in Pittsburgh at The Benedum

RENT in Pittsburgh at The Benedum

Greetings from Pittsburgh where I’m settling this weekend. No, I’m not relocating to Pittsburgh, I’m settling the Pittsburgh engagement of the First Class National Tour of RENT, featuring Adam Rapp and Adam Pascal.

When an engagement of a show ends its run in a market there must be a settlement, or what you might think of as a “closing of the books.”

THE SETTLEMENT IN BROAD STROKES

The Presenter of any engagement holds the income generated from the ticket sales. This income will be used to cover the following:

  • Any taxes and facility fees
  • Ticketing commissions
  • The payments to the Company
  • The Presenter’s fixed expenses
  • The engagement’s documented expenses

GROSS BOX OFFICE RECEIPTS (GBOR)

The gross income for an engagement, including any taxes and facility fees, are called the Gross Box Office Receipts (GBOR).

To begin, any taxes and facility fees are deducted from these gross monies. Also all box office commissions come out of the GBOR. The Presenter receives a specific commission percentage for tickets purchased via different points of sale — subscription, groups, internet, box office, etc. (These commissions will cover the ticketing commissions the Presenter must pay to the credit card companies, etc.) All of this information is included on the settlement.

NET ADJUSTED GROSS BOX OFFICE RECEIPTS (NAGBOR)

Once all these deductions have been made, the remaining monies are now the Net Adjust Box Office Receipts (NAGBOR.) 

From this NAGBOR — the net monies — the Presenter hopes there is enough left to completely cover any payments to the Company (ie: the Guarantee), and all documented expenses and fixed expenses. Documented expenses are the expenses directly related to the engagement and require receipts and back-up, all of which must be given to the Company Manager in time for settlement. 

IN A NUTSHELL…

Settlement takes place “behind the scenes” during the final performance. The Presenter and the Company Manager are plugging in all the aforementioned data into their respective documents and work toward coming up with equal numbers.

All sounds pretty simple, right? Just plugging numbers in? It can be, but it can also be a long process if numbers aren’t matching up, and one or both sides can’t figure out where the discrepency is hiding. Also, there can be disagreements about certain charges called direct company charges. Direct company charges are charges the Company pays that are not covered in the Presenter’s fixed package. A Presenter may charge the Company directly for things like internet access, rehearsal space rental, if any damage was done to the theater, etc. Sometimes a Presenter will charge the Company for something that the Company doesn’t feel it should pay, and if this is not resolved to one side’s satisfaction, chances are the disgruntled side will sign the final settlement documents “under protest.”

Settlement is the final step in the long process that has involved many, many players — producers, booking agents, contract managers, presenters, marketing companies, press agents, operations teams, ticketing managers, and ultimately, yes, the weary settler, who’s hoping she gets out tonight at a decent hour so she doesn’t have to go to sleep at midnight again on the Tap Room’s delicious, but bulky cheeseburger.

Burp.

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