The Fillmore Will Stop Taking a Cut of Artists’ Merch Sales

Over 75 clubs operated by Live Nation in the United States and Canada will stop taking a percentage of artist merch sales, and will pay performers an additional $1,500 travel stipend per concert, through an initiative called On the Road Again, the company announced Tuesday.

In the Bay Area, only one Live Nation venue is included in the program: The Fillmore, the historic, 1,315-capacity concert hall. For over 30 years, artists playing at The Fillmore “counted in” their T-shirts, albums and other merch, and, at the end of the show, “counted out” so the club could tally the night’s income and calculate the amount of profit to take.

United Musicians and Allied Workers (UMAW), an artist advocacy group, says it’s common for venues to take 15%-35% of merch sales, and some artists have reported fees as high as 40% at recent shows.

On the Road Again also promises bonuses for tour staff and local promoters, and will contribute $5 million to Crew Nation, a global relief fund for live music crews facing hardship. Additional Live Nation venues in the Bay Area, including the Masonic, are not listed as participants. Statewide, 14 similarly sized clubs are included in the program, including The Wiltern in Los Angeles and Ace of Spades in Sacramento.

The initiative arrives at a challenging time for artists in today’s music industry, where visibility and acclaim do not translate to financial success. While Spotify and other streaming services pay fractions of pennies per stream, touring and merch sales have become the primary source of income for emerging and mid-level musicians. After a pandemic that decimated live concerts, artists have struggled to rebound due to inflation and high gas prices.

“It’s almost impossible to even break even as a touring artist at this level,” says San Francisco singer and multi-instrumentalist La Doña, whose upcoming tour includes a hometown show at The Fillmore on Nov. 9, as well as shows at participating clubs in Los Angeles and Santa Ana. She says her expenses include hiring a live band, merch handler and photographer, and paying for gas, touring vehicles and lodging. While La Doña handles many business aspects of her tour herself, it’s common for artists to pay booking agents, tour managers and publicists.

“Oftentimes you can’t really get an offer that will support all of that,” she says. “Most artists — I know I do — usually end up paying out of pocket to go on tour, which is why you don’t do it very much.”

For La Doña, merch sales are critical, and can account for up to a third of the money made each night. She hopes that On the Road Again will inspire more venues to let artists keep the profits from their merch tables, which would allow more diverse acts to succeed in the industry. “You don’t really get to see some of the best and most interesting musicians live because it’s tough to be on the road,” she notes.

Some artists say that the economics of the industry have brought them close to quitting altogether. “You are either losing money, breaking even or coming home with such a little amount of money for such a big amount of work,” said Bethany Cosentino of Best Coast in a TikTok video posted on Sept. 12. “Most days I wake up and I question why I’m still even in this industry. There is no stability.”

In 2022, UMAW launched a campaign called #MyMerch, through which 160 venues have so far pledged to stop charging artists for merch sales. Many of the venues who signed up for UMAW’s campaign are small businesses also struggling in the post-pandemic economy, such as the Mystic Theatre in Petaluma, Cornerstone in Berkeley and Bottom of the Hill in San Francisco.

Meanwhile, Live Nation — a global conglomerate that owns Ticketmaster, whose ticket fees have ballooned to record levels — reported in July that its revenue is up 27% this year, reaching $5.6 billion at the end of the most recent financial quarter.

“This was our strongest second quarter ever, with 2023 on pace to be a record year, and early indicators for 2024 giving us confidence in continued growth,” said Live Nation Entertainment CEO and President Michael Rapino in a report to investors. (Rapino’s own total compensation for 2022 totaled $139 million.)

In other words, live music is clearly profitable — but artists aren’t seeing the payoff. New policies at clubs like the Fillmore could be the start of a change small musicians are asking for. “We hope that more [Live Nation] venues (especially small ones) will join the On the Road Again program,” UMAW wrote in an Instagram post on Tuesday.