Labels' Tour Support Slows, But Still a Big Factor

By | June 21, 2004 at 12:00 AM

Record labels have historically invested significant financial resources toward new acts’ touring efforts, whether it be $20,000 for a regional van trek or $200,000 for a national bus outing.

But in today’s world of shrinking revenue and tight budgets, tour support funds – though almost always recoupable against album sales – are becoming harder to come by.

“There’s not as much money at any level, whether it’s signing bonuses, (recording) albums, tour support or anything else,” says Tim DuBois, senior partner of Nashville-based record label Universal South, home of such ascts as Pat Green and Joe Nichols.

“But even in today’s tight-budgeted world, record labels aren’t going to harm a deal for lack of money,” DuBois adds. “If we think something will work, we’ll find the money.”

But that may not happen without an artist manager’s urging.

“Tour support is still there, but I’m seeing it laid out contractually less and less,” says Jamie Cheek, business manager with Nashville-based accounting firm Flood, Bumstead, McCready & McCarthy.

Cheek adds that budgets are now closely monitored. He says a group he works with that is signed to a major originally thought it would receive $75,000 for one month of touring on a bus. Later, the label came back with another offer: $30,000 and a van.

“That’s a sign of the financial times in the label business,” he says. “On the other hand, I had a rock band moving 20,000 units a week that was just approved for $200,000 for touring for two months on a bus.”

Some managers say that even if the dollar amount is diminishing, a lack of tour support would be a deal-breaker.

“If I was to sign a new artist to a major, I would absolutely ask for (tour support), and it would have to be part of the deal,” says Jack Rovner, a partner in the Vector companies, which includes label and management arms.

But, he adds, each circumstance is different. “That kind of generalization can get you in trouble,” he says. “Some acts don’t need to be on the road; they need a video or a record on the radio.”


Label executives are quick to point out that there is more to tour support than just money. Maximizing an artist’s presence at retail and radio when in a market is often part of the deal.

In an effort to make every dollar count, in the wake of the recent Elektra/Atlantic merger, the new Atlantic label has created a field and tour marketing division. The department – essentially a restructured tour marketing division – has “far greater scope and responsibility,” according to Chris Webby, VP of the new department.

Webby says the division encompasses tour, college, and lifestyle marketing; promotional touring; and street teams.

“In restructuring the vision of our new label, we realized we wanted to be much more of a company of road warriors,” Webby says. She adds she is not seeing evidence of recoupable tour support drying up.

“Generally, we address each artist and tour opportunity individually, working closely with managers and agents,” Webby says. “We want to make sure it fits into everyone’s overall vision to develop artists through touring.”

DuBois says that at Universal South, marketing funds can be used wherever appropriate.

“I have a saying that you can only spend a dollar once, and if a tour situation makes sense, it’s not like we won’t hesitate to pull (money) from somewhere else,” he says.

Tour expenses go well beyond transportation; a crew must be hired and sometimes musicians as well. Other details include gear, wardrobe, production elements and meals.


The extent to which touring affects record sales remains debatable even today. But DuBois says a sales spike from touring is not a myth, as it has sometimes been portrayed.

“You definitely see it, especially with a band like Cross Canadian Ragweed,” he says. “You can tell when they’ve been through a market, even without airplay. In mainstream country, you have to have a peak in airplay when (the act) comes through to see a spike.”

Irish artist Damien Rice has toured since well before his debut release in June 2003 on Vector Recordings. “Since the setup of his record, Damien has toured extensively in the U.S., and I’m happy to say his last tour of theaters was completely sold out,” Rovner says.

Sales of Rice’s album “O” spike “every time he goes out, in every market, without fail,” Rovner says.

Webby cites Jason Mraz and Australian rockers Jet as acts that have received and benefited from label tour support.

“When Jet goes back out on the road in July, they’ll be selling enough tickets where they don’t need tour support anymore,” Webby says. “That’s what we call ‘graduation day,’ the day the band is off tour support.”

In one of the more controversial developments of late, labels have made noise about tapping into touring revenue. They say they are entitled to portions of that money, because they have invested heavily in developing a brand that potentially creates revenue that labels never see.

DuBois stops short of voicing support of that concept, but he does say that “the (current label) model has to change. There are some intriguing possibilities out there where record companies become more like managers and managers more like record labels.

“We’re all interested in building a brand that makes a lot of money, and sometimes the lines get blurred,” he adds. “Someone has to protect the artists’ interests.”

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