Split Point

What Is a Split Point?

A split point is a net income target for a concert. It is the threshold where revenues from a show start being paid to artists at a specific percentage.

Usually the split point is set to make sure the venue covers its expenses and makes a bit of profit before the artist starts getting their split.

Why Are Split Points Used?

Split points protect the venue or the promoter from losing money.

Putting on a show costs money. The venue has to pay the staff, pay for the sound system, and sometimes pay the artist a guaranteed minimum amount.

The split point makes sure all these expenses, and sometimes the promoter’s profit, are covered first. Only after these costs are paid does the artist get a percentage of the remaining income.

How Does a Split Point Work?

The performance contract will specify how the split point will be calculated. For example, it might say that the artist will get an 80% split of revenues after certain expenses are paid.

Those expenses can include sales tax on ticket sales, staff costs, the venue or promoter’s profit, guarantees paid to performers, and just about any other expense you can think of.

Let’s say that after a show, the settlement is done. All the appropriate expenses are added up according to the contract and the split point is $1,000. The deal says the artist gets 80% of any money made after the split point.

If the show revenues are $800, it did not reach the split point. The artist does not get a percentage.

But if show revenues are $1,500, it passed the split point by $500. The artist will then get 80% of that extra $500.