Mike McGrath has over 30 years of experience on the road. Having held many positions including: Tour Accountant, Tour Manager, and Tour Security and Logistics. He also travels and gives lectures around the country. He has worked with artists including Rascal Flatts, Reba McEntire, The Judds, and Tim McGraw. Currently, McGrath is the Road Manager for Blake Shelton.
I had the opportunity to ask Mike McGrath a few questions about his role with negotiations within the entertainment industry. Here is what he had to say:
NW: "What is your experience working in the industry?"MM: "I've been involved in the concert touring industry for over 30 years. I am tour manager specializing in tour accounting and venue security. Two acts that I worked with early in my career promoted their shows in-house. I therefore learned tour accounting on a deeper level than if I was solely an artist representative."
NW: "What is your experience with negotiating in the entertainment industry?"
MM: "The shows on a concert tour are negotiated between the promoter and the booking agent. Occasionally, I am consulted in the contract phase of the deal, but primarily, my negotiating responsibilities are focused in the actual show settlement.
Present in a typical show settlement are the building/venue manager, the box office manager, a promoter rep and the tour accountant. The first step is to reconcile the box office statement (ticket sales, comp tickets, taxes and fees). Next, we review all building expenses (rent, staffing, stagehands, etc.). Finally, the promoter expenses are added (insurance, performing rights fees, support acts, etc.).
If anything doesn't match up with the original budget, or if the amount appears to be out of line, it gets questioned. If a resolution cannot be quickly reached, we may put the issue aside and continue to see if more questions arise. At the end we discuss and negotiate the discrepancies. The process greatly depends on the financial success of the show. When there is lots of money on the table it's much easier to find a mutually satisfactorily solution."
NW: "What is your most memorable experience with negotiating?"
MM: "My favorite settlement negotiating memory was back in 2003. The terms were unique. It's common for a deal to be "a guarantee versus a percentage after expense, taxes and fees." This tour had a third option - "versus 75% of the gross." This arrangement was considered a test or study so each day, around 5pm, I would do a pre-settlement and call the manager with a forecast.
At this particular show, the promoter was on track to lose about $50,000. I didn't tell the promoter rep right away however. I wanted him to stay motivated to trim the costs.
At the end of the settlement that night, I informed the promoter that the artist would like to give them back $50k. He literally jumped out of his seat with joy and relief. He also promised to immediately book future shows for the artist.
The move created amazing goodwill and the money was most likely recouped over the following years."
NW: "Did you have any tough negotiations?"
MM: "If I think about it, I could come up with many stories of "spirited" negotiations. One that comes to mind was fairly recent and involves bonuses.
All the shows on this particular tour were bundled into one contract. Part of the terms were bonuses to be paid at certain sales marks (for example, an additional $5,000 at 10,000 tickets sold; another $5,000 at 11,000, and so on). I was involved in the discussions with the attorney prior to the tour and asked the question - Is it mathematically possible for a show to hit the bonus sales marks but be a financial loss for the promoter? We all agreed that the wording of the contract stipulated that, yes, we still would be entitled to the bonus payments in that case. Well...that, indeed, did happen and the promoter felt they should not have to pay."
NW: "How did you diffuse that situation?"
MM: "In the case above, we debated the issue to no end that night. We had two paths of recourse. The first was to consult the booking agency and lawyers the following day. The other was to just put the issue aside, along with any future disagreements, and review it all at the end of the tour.
At the headline level the same artist and promoter representative's cross paths many times. So, although disagreements happen often, they rarely get personal."
NW: "Is there any advice that you can give for handling negotiations, or in any other area?"
MM: "If someone stays in the business long enough, they will see the same people over and over. Early in my career there was no online ticketing system, we used "hard" tickets. At the end of the night we had to count the "deadwood" (the unsold tickets) to determine the number of tickets sold. I asked a promoter once if it really mattered if I actually counted them. He advised that I would get a reputation of someone who didn't count and that could matter in the future.
The fact that some rich entertainers end up broke is a testament to the saying "it's not about how much money you make, it's more about how much you keep." If you can save $1,000 a show for 100 shows, that's $100,000, that's significant. If you do that, you can prove that you can pay for yourself. Few positions can do that. If you handle money, keep that in mind.
My point is that you need to build a solid reputation. It follows you through your career and is instrumental in your growth and possibly getting future jobs."
NW: "Are there any tips for success that you might have for succeeding in the industry?"
MM: "In life and work I stress integrity. A solid work ethic and moral character are important. In certain genres, this business can foster an environment of partying. If you're in a position of responsibility, stay healthy and sober.
The strengths of artists and musicians are generally in the creative/artistic realm. The need people like us who are organized. Information and communication are paramount."
To the average person, negotiations can be scary. They have been given such a bad reputation through the media. Mike showed me that while they can be stressful, they can also be fun. Whether it be a disagreement about payments or a miscalculation of funding, it is our jobs and reputation on the line. We need to think about who we work for, what kind of reputation we want to have, and what needs to be communicated. As Mike said, "you need to build a solid reputation. It follows you through your career and is instrumental in your growth and possibly getting future jobs."
References
Blake Shelton. (n.d.). Retrieved July 10, 2016, from http://www.blakeshelton.com/
Full Sail University. (2016, February 03). Tour Management 101: Managing Risk on the Road. Retrieved July 10, 2016, from https://www.youtube.com/watch?v=4gujdJKkeGE
McGrath, M. (n.d.). LinkedIn Profile. Retrieved July 10, 2016, from https://linkedin.com/in/mike-mcgrath-1b473642
McGrath, M. (2016, July 09). Negotiations on the Road [E-mail interview].
Mike Curb College of Entertainment & Music Busines. (2012, February 06). Mike McGrath 02.06.2012 [Photograph found in Mike Curb College of Entertainment & Music Busines]. In Flicker. Retrieved July 10, 2016, from https://www.flickr.com/photos/curbcollege/sets/72157629209038885/comments/
Rascal Flatts. (n.d.). Retrieved July 10, 2016, from http://www.rascalflatts.com/
Reba.com. (n.d.). Retrieved July 10,2016, from http://reba.com/
Speer, D. (2014, February 20). Pollster Live! 2014 Panel - Go Ahead, Make My Day: A Show's Perspective from Back of House. Retrieved July 10, 2016, from http://www.pollstarpro.com/live2014/schedule-makemyday.htm
The Judds. (n.d.). Retrieved July 10, 2016, from https://www.facebook.com/thejudds/
Tim McGraw. (n.d.). Retrieved July 10, 2016, from http://www.timmcgraw.com/
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