Article
Start with the compensation formula
A flat guarantee sets an agreed performance fee. A percentage-only deal calculates compensation from a defined revenue or profit base. A guarantee-versus-percentage deal compares the guaranteed fee with the percentage result and pays the greater amount.
A guarantee-plus arrangement adds a contract-defined amount to the guarantee. 'Plus' and 'versus' are not interchangeable. The signed terms must explain the calculation.
One fictional show, three different deals
Assume the parties have already agreed that the amount subject to the artist's percentage is $6,000. For illustration only, compare a $2,500 flat guarantee, a 70% percentage-only deal and $2,500 versus 70%.
Flat guarantee: artist compensation is $2,500.
Percentage only: $6,000 × 70% = $4,200.
Guarantee versus percentage: the greater of $2,500 and $4,200 is $4,200.
Now change the sales outcome
If the agreed percentage base is only $2,000, the percentage result becomes $1,400. The illustrative flat guarantee still pays $2,500; the percentage-only deal pays $1,400; the versus deal pays $2,500.
These figures compare compensation structures. They do not address cancellation, breach, withholding or other provisions that may affect an actual payment.
The percentage needs a definition
What receipts enter the calculation?
Which taxes, fees or expenses may be deducted?
Are expenses capped or subject to written approval?
How are complimentary admissions, refunds and different ticket prices handled?
Which box-office records can each party inspect?
Keep compensation separate from the balance due
In the first example, $4,200 is total artist compensation. If a verified $1,000 deposit has already been paid toward it, the remaining balance is $3,200. The deposit is not an extra $1,000 on top.
Use Ternwheel's How Tour Settlements Work guide for the document review and reconciliation process. Percentages and deductions here are hypothetical, not recommended market rates.
Examples and sample wording on this page are original, fictional teaching aids, not records of actual shows or agreements.
Related guides: What Is a Deal Memo in Live Entertainment?; Gross vs. net box office: follow the money to the right subtotal; How Tour Settlements Work.