Sarah Beth Tomberlin has built a career in the music industry from nothing.
The 28-year-old singer and songwriter, who performs under the name Tomberlin, crafted her 2018 debut album while supporting herself by working at a Verizon
VZ,
store. She has since recorded and released a second studio album and an EP while touring, building up to opening spots in larger venues for well-known acts such as Tegan and Sara.
In her first five years in the industry, however, Tomberlin said she doesn’t believe she was able to turn an annual profit. As she prepared to go on tour as an opening act for Ray LaMontagne this year, she took steps to cut costs, such as choosing to bring along only one support person instead of a full band.
So when the Filene Center near Washington, D.C., informed her that it was cutting deeply into her main way of making a profit, she took a stand. After being told she would have to hand over more than 40% of the money she collected from selling T-shirts and other items, Tomberlin refused to sell her merchandise at the venue and publicly spoke about a practice she calls robbery — venues taking cuts from bands’ merchandise sales.
“Those were losses [from not selling merchandise], but I also feel it’s more responsible of me to take a stand than to gain a profit, if I even do,” she told MarketWatch. “I think I would more so be paying [the venue] to give people my shirts or my music.”
Musicians have been running into these fees more often in recent years, which has led many to increase prices on the T-shirts and other merchandise they sell at shows — or to choose not to sell their wares at all. Selling “merch” has long been one of the few profit levers musicians can pull as travel costs soak up more of the guaranteed payments they receive for playing shows.
“You make a budget and then you see the possibility of having your funds drained and you don’t know what you’re going to sell each night, so it’s just a real crapshoot,” Tomberlin said. “We can bank on what my guarantee is that night, but the merch is what really is covering your costs and hopefully helping you make, like, an actual profit.”
Other musicians are also speaking out about the practice, and their complaints seem to be having an effect. Industry giant Live Nation Entertainment Inc.
LYV,
announced recently that it would stop collecting merch fees at nearly 80 of the smaller clubs it owns and operates and provide all bands that play at those venues with an additional $1,500 in gas cards and cash.
Musicians who spoke with MarketWatch remain unsatisfied, however. Because of the way the announcement is phrased, many think merch fees at Live Nation clubs are only being paused until the end of the year. The musicians said they also wonder about the roughly 250 other Live Nation concert facilities, as well as the hundreds of venues owned by other companies.
A Live Nation spokesperson told MarketWatch the change is “open-ended.”
Read: Older rockers are canceling shows for health reasons, making ticket purchases risky for fans
Tomberlin said that one other venue on the tour so far has sought a cut from her merchandise and other withholdings that topped 40% — the Chicago Theatre, which is owned by MSG Entertainment Corp.
MSGE,
She also refused to sell merch there. Tomberlin, who switched to higher-quality shirts so they’re “not just something that ends up in a landfill years from now,” figures her profit margin on a shirt is roughly 25% or less when she charges $35.
MSG declined to comment for this article, as did Anschutz Entertainment Group, another large venue operator and promoter mentioned by many musicians with whom MarketWatch spoke. Wolf Trap, the nonprofit organization that operates the 7,000-capacity Filene Center, said it could not confirm the fees Tomberlin was charged because it was “not at liberty to discuss contractual terms publicly.”
“Wolf Trap’s operations, including merchandise rates, are consistent through the summer season. All artists performing at the Filene Center have had the same terms without incident,” a representative for the organization said in an emailed statement.
As Tomberlin continues on her current tour, she wonders if she will be able to make a profitable career in music. Of all her ways of earning money, streaming services like Spotify
SPOT,
and Apple Music
AAPL,
provide “the least amount of money,” she said, and with tours not leaving her with any cash at the end, she feels that even modest ambitions are out of reach.
“My dream would be to have a house, you know. Not have to rent. Pretty small goal, but it feels so impossible sometimes because our industry is set up to just take and take and take and drain and drain and drain,” she said.
‘It’s wage theft’
Jeff Rosenstock offered his own definition of merch cuts.
“It’s a pretty simple thing. We’re literally being stolen from, in plain sight,” he said. “It’s wage theft.”
When Rosenstock’s eponymous punk band was preparing to go on its latest tour last month, they decided to publicly share the merch fees they faced. It was not an attempt to shame Live Nation and other venues and promoters, he said. Instead, the band wanted to make sure fans knew why their T-shirts were more expensive.
“I’ve been 20 years old before, and I know that there’s a big difference between paying $20 for a shirt and paying $30 for a shirt or $35 for a shirt,” he said in an interview. “Because we’re keeping our profit margins low to begin with, and we have to pay for all the shirts — we do all the work, pay for the designs, pay for the shirts, pay for the shipping, pay for the person to sell it, all that s—,” he said, “we have to add in extra money in selling it, and that just trickles down to the fans.”
Fans have long believed that buying T-shirts, records and posters at a concert is the most direct way to get money into the hands of their favorite musicians, and those with whom MarketWatch spoke said that has largely been true. Joey La Neve DeFrancesco, a musician and organizer for the nonprofit United Musicians and Allied Workers, called merch sales “the only thing that’s been economically responsive at all for artists.” Others described the money as a financial lifeline for bands trying to survive on tour and return home with a profit.
“If you have a good show and you make like a couple thousand bucks in merch, that might be the difference between you being able to stay in a hotel instead of on a stranger’s floor one night, if you want to, or you might be able to pay rent when you get home,” Rosenstock said. “That’s big money and it’s being taken by people who don’t have those concerns. Nobody who is taking that money is like, ‘If I don’t get this merch cut, I will have to sleep on the floor tonight.’”
See also: ‘You’re either Beyoncé or you’re working class’ — Concerts have a record year, but most musicians are struggling
Beyond the costs of making and transporting the merchandise, bands typically pay a person to sell and manage their merch on a tour. While some of the venues taking cuts sell through their own employees, touring bands still have responsibilities to their own employees, who will be necessary for the majority of shows.
“I’m responsible for the merch person’s payroll, I pay their per diem, I pay for their hotel at night, I cover the insurance too, their workers comp insurance, everything like that,” musician Laura Jane Grace said.
“Do you want to know why your favorite band you saw play in a basement, now that they’re playing on a bigger tour, they’re charging much more for their shirts? It’s because the venue is taking a huge cut of it, not because they’re just capitalist f—ing bastards. I think it’s important for the audience to know that,” Grace said in a telephone interview.
‘There’s no justification’
Grace remembers first encountering merch cuts early in her career as a lead singer for the punk band Against Me. She told MarketWatch they were introduced at all-ages punk shows many years ago because those venues could not sell alcohol with minors present, which cut off the venue’s main way of making money.
“You have to understand that back in the day, punk bands or indie bands, there wasn’t a market — the amount of business being done in those really early days compared to what it is 1696886229, it’s completely different. Now, there’s just no justification for that,” she said.
Rusty Sutton says that merch fees have been included in most contracts he has seen in the past couple of decades, but were rarely enforced previously. Sutton moved from working at concert venues to being a tour manager, and he now negotiates contracts for artists as an artist manager for management company the Glow. Along the way, he’s seen concerts and their business deals from all angles.
“It was just a copy/paste for making the contract, but back then, nobody would say a thing about it. You just bag up the merch and go home,” Sutton said. “Now, the thing that has changed in the last five to 10 years is a lot of those corporate venues that used to own amphitheaters, used to own the big, big theaters, suddenly started buying up 1,000-capacity clubs.”
Live Nation owned 15 “clubs” — venues with capacity of less than 1,000 people, which were the target of the company’s recent change to merch fees — at the end of 2012, but that number had more than quadrupled to 63 by the end of 2022, according to disclosures with the Securities and Exchange Commission. The company also owns House of Blues locations and other spaces that can hold up to 2,000 people, though a Live Nation spokesperson said the new policy was aimed at clubs with a capacity of up to 1,000.
Read more: Are concert tickets too cheap? Ticketmaster thinks so.
“In my experience, it’s something that began at these really large, more monopolized corporate venues,” said DeFrancesco, who performs with a band called Downtown Boys.
But the practice has spread much farther, he said.
“They’ve bought up so much of the industry, and as smaller venues are struggling to stay afloat and copying their business practices in many places, you’ve kinda seen it continually spread, where certainly we’re hearing about it now more than we ever have, and it seems like especially post-COVID, more and more venues are adopting the practice.”
The resistance
DeFrancesco’s organization, UMAW, launched a campaign nearly a year ago that asks venues to voluntarily promise not to take cuts of merchandise sales from artists. Almost 170 venues have signed on to that pledge, more than double the number included in Live Nation’s announcement, but DeFrancesco said that the pressure to end the practice must continue, especially since Live Nation did not promise that its change would be permanent.
“They will continue this precisely as long as we can keep the pressure on them,” he told MarketWatch in a telephone interview, “because of course with a giant corporate monopoly like this, that is our power — not just hoping that they’re going to be nice.”
Sutton and Grace have both launched online petitions seeking to maintain pressure and give fans a voice. Grace, who posted a petition on MoveOn.org, is also one of more than 150 artists who cosigned Sutton’s letter with a more specific target: The National Independent Venue Association.
NIVA, a lobbying organization, released a long statement after Live Nation ditched merch fees at smaller clubs, describing Live Nation’s move as “a calculated attempt to use a publicly traded conglomerate’s immeasurable resources to divert artists from independent venues and further consolidate control over the live-entertainment sector.”
Sutton, whose petition challenges NIVA to end merch fees or defend the practice publicly, said the group’s statement “created this false binary choice — either you’re on the side of independent venues or you’re on the side of deep-pocketed corporate promoters. But I’m like, ‘Guys, neither of you are on the side of the artists on this,’” said.
NIVA has not responded to a request for comment.
The artists with whom MarketWatch spoke said they hope that fans and others take advantage of the current momentum and publicly encourage a permanent end to merch cuts — and that they continue to attend concerts and buy merch.
Tomberlin hopes that some of her more famous colleagues in the music industry join the chorus seeking a complete end to the practice.
MarketWatch asked if she meant someone like Taylor Swift.
“I would love it from Ms. Swift. She does seem to have more power than the White House these days,” Tomberlin said. “All in love and respect.”
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