Offers & Settlements Terminology
Spark's Offers & Settlements tool is a simple solution for cutting a deal with an Artist or their Agent in order to book a show. Once you send out and confirm an offer, you can start promoting the event and selling tickets online. As soon as ticket sales have closed, your settlement will be generated for you based on your online and box-office ticket sales.
Before you get started, you'll need to understand some terminology. Use this doc for reference as you put together your offer in Spark.
The Agent
The agent is the party representing the talent you want to book. In some cases it's the artist themselves, but large-profile artists will have booking agents who make agreements on their behalf.
Consider yourself the talent-buyer - the promoter, venue owner, or events coordinator. You are the party communicating with the agent to put together an agreement for the band to perform.
Base Payment: Guarantee, Deposit & Tax
Guarantee: This is the minimum amount you will pay the talent. The Guarantee, as well as any fixed income or expenses, are the only non-variable non-hypothetical amounts in the offer. All other amounts are determined by ticket sales. See Deal Types below to see how the artist is paid out in relation to the Guarantee.
Deposit: An amount of the Guarantee to be paid to the artist upfront. The remainder of the Guarantee is paid during or after the event takes place.
Sales Tax: Tax to be deducted from income before the artist's payout, regardless of Deal Type.
Deal Types
Sparks's Offers & Settlements tool is built for hard-ticket bookings. In this type of agreement the artist's payment is determined by ticket sales. Other payment factors include additional income (see Income below) and expenses of the event promotion and production (see Expenses below).
Gross deals account for ticket sales plus other income, after taxes, and before expenses. Net deals account for ticket sales plus other income, after taxes, and after expenses.
In each of these deals, the artist and the talent buyer collect a percentage cut of the sales. The cut varies based on the contribution of the promoter or venue (such as promotions and accommodations to the artist) and whether a Net or Gross deal is on the table. Here are the deal types explained:
PLUS GROSS: The artist receives their percentage cut of Gross sales (ticket sales PLUS additional income MINUS taxes) in addition to the Guarantee.
PLUS NET: The artist receives their percentage cut of Net sales (ticket sales PLUS additional income MINUS taxes MINUS expenses) in addition to the Guarantee.
VS GROSS: The artist's cut of Gross sales (ticket sales PLUS additional income MINUS taxes) is weighed against the Guarantee. The artist receives the higher value.
VS NET: The artist's cut of Net sales (ticket sales PLUS additional income MINUS taxes MINUS expenses) is weighed against the Guarantee. The artist receives the higher value.
Scroll down to the bottom of this doc to see sample settlement calculations for all deal types.
Income
Tickets: These are the types of tickets, their prices, and amounts available that need to be agreed upon for this event. The final offer will calculate a hypothetical sold-out show, where it projects the final ticket sales as (Dollar value) x (Amount available). *Only the face value of tickets are accounted for in ticket sales. Ticketing service fees are not included.
Other Income: Income in addition to tickets; this may be merchandise or bar and concession sales.
Expenses
Expenses of any type may be allocated a fixed amount or a percentage of the income from ticket sales, as they may vary based on attendance.
Expenses: These are fixed or variable expenses before or during the event, such as paid promotions (fixed) or parking fees (variable).
Support Expenses: This is supporting talent to be paid, such as an opener or host.
Offer Status
Once crafted and saved, your Offer will undergo status changes during the negotiation, event promotion, and production process.
Pending: This offer is still in draft-mode. It can be edited, deleted, and emailed to an agent for review. An offer stays in draft mode until it is either confirmed or declined.
Confirmed by Agent: When an agent is emailed an offer from Spark, they receive a link to confirm the deal. Once confirmed by the agent, the offer can not be changed or deleted; at that point it may only be confirmed or declined by you. The offer must be confirmed by you for you to create an event and begin ticket sales.
Confirmed By You: The offer wouldn't necessarily have to have been confirmed by the agent through their email, but if confirmed by you, it is assumed that it has also been reviewed and agreed upon by the agent. Events can only be created from this status.
Declined: Offers can be declined from a Pending or Confirmed by Agent state. A declined offer can not be edited, confirmed or deleted.
Deal Type Samples
See below the calculations for each deal type based on an example settlement. The final Income, Tax, Expenses, and Deal Split used in the example are as follows:
| Example Settlement Amounts: | |
|---|---|
| Ticket Sales | $10,000 |
| Other Income | $1,000 |
| Tax | 7.31% |
| Expenses | $1,000 |
| Support Expenses | $500 |
| Split | 85% / 15% |
| Guarantee | $500 |
PLUS GROSS
The artist receives their cut of the gross income plus the guarantee.
PLUS NET
The artist receives their cut of the net income plus the guarantee.
VS GROSS
The artist's cut of the gross income is higher than the guarantee. In this case the artist receives their cut of the gross income only.
VS NET
The artist's cut of the net income is higher than the guarantee. In this case the artist receives their cut of the net income only.
Click here for an overview of Offers & Settlements in SPARK Event Manager.