Guarantee

What Is a Guarantee?

A guarantee is a flat fee paid for a performance. The artist gets this amount after playing the show. There is no upside potential if the show is successful. No downside if the show flops.

A guarantee may be the full compensation for a performance or only one part of the total compensation offered. For example, an artist might be offered a guarantee plus a cut of bar sales.

Examples of Deals That Include a Guarantee

A guarantee is often one component of the total compensation offered in a performance contract.

Some compensation structures can be quite complicated. Read Pay Structures for Live Musicians: A Comprehensive Guide for an in depth look at compensation structures.

Guarantee Plus Door Deal

A guarantee plus door deal is a flat fee in addition to a percentage of ticket sales. There may also be a cap involved in a deal like this.

For example, the deal might include a $500 guaranteed payment plus 80% of ticket sales, capped at $1,000 total compensation.

This means the artist will receive at least $500, even if ticket sales are low. If ticket sales are strong, they will earn 80% of the revenue. But their total payment, including the $500 guarantee, cannot exceed $1,000.

Versus Deal

An example of a versus deal would be $500 guarantee or 50% of the door, whichever is higher. In this case, the artist will get at least the $500 guarantee. But they would make more than $500 if 50% of ticket sales exceed $500.

If ticket sales were $1,200, the artist will get $600 instead of the $500 guarantee. If ticket sales are only $900, the artist will get the $500 guarantee because it is higher than 50% of ticket sales.

Split Point Deal

A split point deal can include a guarantee plus a percentage of net income from the show.

For example, the artist gets an 80% split point deal after $500. This means that the artist gets a $500 guarantee plus 80% of net income from the show.

Split point deals are complicated. It’s important to understand which expenses and revenues are going to be taken into account when determining the net income from the show.

Usually the guarantee pay itself is considered an expense in the split point calculation. Hence the phrasing, “80% split after $500.” The artist gets 80% after expenses are deducted from revenue including the $500 guarantee.

What Is the Difference Between a Guarantee and a Buyout?

A guarantee is money paid to the artist for playing the show. A buyout is money paid to the artist in place of providing things like food, accommodation or items on the artist’s rider that the venue is contractually obligated to provide.

It is often easier to give a band a buyout than to have someone physically acquire and provide everything on every band’s rider.

They sound similar but one has to do with payment for performance and the other has to do with covering expenses for the artist.