Performers frequently moan about never seeing a royalty check from their record label, no matter how many discs they sell. But a top concert draw can take home 35 percent of the night's gate and up to 50 percent of the dollar flow from merchandise sold at the show. The labels get none of it.
"The top 10 percent of artists make money selling records. The rest go on tour," says Scott Welch, who manages singers Alanis Morissette and LeAnn Rimes.
Now the music labels, hungry for revenue from any source, are mulling over whether to make a grab for a piece of the tour biz. One company already has: In October EMI Recorded Music signed a deal with Brit singer Robbie Williams that gives the label a cut of the pop star's merchandise, publishing, touring revenue and sponsorship.
Williams, unknown here but huge everywhere else, is a former boy-band star who has sold 26 million records since 1995 and regularly sells out concert crowds. His current European tour includes three nights at England's cavernous Knebworth Stadium, where he will cavort in front of 150,000 people each night. Hence EMI's willingness to pay him an estimated $20 million for a 25 percent stake for his nonmusic revenue, in addition to hefty per-album advances.
EMI officials say they are pursuing similar deals with other musicians, both superstars and new acts. Other label executives are eyeing the idea, albeit less openly. Vivendi's Island Def Jam may create a tour division. At Sony Music, before he left the top job earlier this year, the embattled Tommy Mottola is said to have asked several top acts to share the wealth; they demurred.
For more, go to Forbes.com..