According to Tom Alexander, a contract administrator for AEG, the industry is seeing a revolutionary practice: promoters amending venue contracts. It was something that was unheard of as recently as 10 years ago – but then again, nothing is new.
Confusing? Not really. Alexander says, until recently, it was common for promoters to accept a venue contract as written, evidenced by his initial contact with arenas when he joined AEG about six years ago.
"A lot of these venues had language in their original contracts that pretty much said, ‘By you promoting a show in our building, you are responsible for everything under the sun that happens in this building, regardless of who does what," Alexander told Pollstar.
"When I started calling buildings to get a contract in a Microsoft Word format so I could insert changes in red line, everyone said, ‘No one has ever marked up our agreement. Everyone has always signed it.’"
But venue contracts, as written, made promoters responsible for everything from the slip-and-fall on the third-tier balcony to possible defects in the building to the fight in the parking lot to even the behavior of the venue’s employees.
"I was amazed when I heard that nobody was marking up the contracts," Alexander said. "Are people out there really that dumb? I was finding for years that was the case."
Now it’s common for AEG, Live Nation and independent promoters to mark up the contracts, Alexander said.
Yet, after all of these years, with so many markets and so many promoters, somebody must have marked up a contract somewhere.
"We’ve been amending our contracts for over 30 years," Jerry Mickelson of Chicago-based Jam Productions told Pollstar. "If you call any of the venues where we work, they’d tell you that. It’s standard operating procedure around here. Not just for taking care of our people and the venue taking care of their people, but other clauses, too."
He could not speak on behalf of other promoters – some of whom presumably follow the same procedure – but was happy to say that "our loss/reserve ratio with our insurance company is lower because we’re not taking the claims of a venue, which is responsible for their own personnel."
Likewise, AEG, Live Nation and others have started digging into the indemnity and insurance clauses of the contracts.
Alexander said that AEG created a contract template for every building it works with. The venue e-mails a Word doc version of the AEG contract to the promoter. Because AEG knows its own contract, a tertiary review is usually all it takes before it is signed, scanned, and e-mailed back. Sometimes the deal points are amended, but most reviews take about 15 minutes.
Now, Live Nation also has template agreements with practically all of their buildings, and the practice is common with independent promoters. Alexander contended that any legit promoter could – and should – mirror this policy.
"The small-sized promoter has the ability to bring programming to those buildings too. It should be valued just as much as any other promoter," he said. "They should have no hesitation in marking up the indemnity and insurance provisions of a contract. And they should be given an opportunity to create a template."
Following the age-old practice of establishing ties with baby bands, big-time promoters also book club shows. Alexander stressed that working with clubs is a positive experience, but it could mean dealing with less-experienced management and employees.
"More often than not, clubs don’t have a rental agreement," he said. "They don’t have any paperwork. You want to make sure they’re taking responsibility for the staffing they hire. It’s key. It’s huge."
Concertgoers have been known to break their necks while moshing or crowd surfing so, even if the promoter is not hiring the security, it’s still important that the club has a professional security operation, Alexander said. Ticket accountability is also key – a Ticketmaster audit should be part of the agreement rather than "some guy at the door, telling you there’s 150 people when you see 500."
Bucking tradition, AEG has been known to create rental agreements for clubs. Of course, the agreement makes each party responsible for their own people, rather than making the promoter responsible for everything.
Alexander held a roundtable discussion on reading contracts at the Concert Industry Consortium in February. Along with the marketing roundtable, it was one of the best-attended discussions at the event, proving one doesn’t need an exciting topic to attract a crowd.
Yet, many of the visitors to Alexander’s table were not interested in venue agreements.
"’How literally do you take an artist rider?’ That was a pretty common question," he said. "Riders have pretty high expectations and they are not willing to adjust anything – at least not until a week out from the show and they say, ‘We’re actually just flying in. We don’t need any catering so go ahead and throw away the rider.’
"It all boils down to communication. You’ve got to get on the phone to the production manager and not just the agent. The agent often just has stacks of these Xeroxed riders in their drawer. They may be from 2006, last year, whatever. A production manager will often say, ‘Hey, I’m glad you called. I just updated it last night. Here’s the newest copy.’
"That will save you a world of trouble and possibly huge costs in buying unnecessary catering and production not relevant to that leg of the tour."
Alexander and his office review, draft and edit venue, artist, co-promotion, sponsorship and vendor service agreements.