HORSESHOW: The Horseshoe Tavern in Toronto is one of the stalwart independent clubs making it known it has never taken a cut of artist merch sales. (Courtesy venue)

A couple of Toronto club owners had a tongue-in-cheek response to the news last week that Live Nation would no longer take a cut of merch sales at the clubs they own and operate and would throw in $1,500 for gas and travel expenses per show to headliners and support acts (on top of their performance compensation).

“BREAKING NEWS: The Garrison, The Baby G and Transmit Presents have never taken a merch cut from bands. We thank Live Nation for joining us in supporting touring artists,” posted Shaun Bowring, owner of the two Toronto music venues and Transmit Presents concert promotion company.

The Garrison is 350-capacity and The Baby G 150-cap.

Jeff Cohen, majority owner/president of two venues and shareholder in promoter Collective Concerts, made a similar post: “BREAKING NEWS: The Horseshoe Tavern and Lee’s Palace, have never taken a merch or recorded music cut from ARTISTS – However good to see LIVE NATION venues joining us in supporting local and touring musicians – Even if it’s for now just a roll out program!” Lee’s Palace is 560-cap and The Horseshoe Tavern 460-cap.

“The Garrison is coming up on 15 years and Baby G’s about nine and we’ve never taken a cut. So it was a little tongue in cheek, a little poke the bear, ‘Hey, breaking news, we’ve always done that,” Bowring laughs. “But I looked up the program. The impact, I think, is positive for bands. I hope in the long run that works out.”

While there is truth to their posts, both Bowring and Cohen are happy that Live Nation is paving the way to hopefully encourage other venues to stop the practice of dipping into an artist’s merch profits.

The move by Live Nation was primarily praised and received a lot of media coverage, even on local television news. The program was created with Willie Nelson and is named after his 1980 single, “On The Road Again.” The 0% merch rate is just one element of the program, which the live entertainment giant says, “Through the end of the year…is expected to deliver tens of millions of dollars in extra earnings to club artists and crew,” and proceeds to list the “how.”

Some independent venues have said that taking a cut of merch is no different than renting shelf space in a store and that they need that extra revenue to survive in these lean times. But, as noted in VenuesNow’s piece on the Biltmore Theatre, The Featured Artists Coalition out of the UK started the 0% merch rate campaign in January, 2022 and it came over to North America that November (in the U.S. via Union of Musicians and Allied Workers and in Canada via rapper Cadence Weapon).

The Live Nation press release states Pollstar’s live music charts indicate there are 4,000 venues in the U.S., and small venues host about 70% of all shows each year.

In Toronto, Live Nation owns small venues Danforth Music Hall, Opera House, Axis (formerly The Mod Club), Velvet Underground, and built the bigger capacity History. About two hours north of Toronto, in Muskoka, it bought the historic Kee To Bala. The other venues it owns in Canada are the Midway Music Hall in Edmonton, Alberta, and Commodore Ballroom in Vancouver.

Bowring, who works with Live Nation and this week had a Transmits Presents show at Opera House with Tangerine Dream, says while his post was tongue-in-cheek, the $1,500 could hurt independent promoters in the long run.

“If everyone is expecting that extra $1,500, the independent promoters like myself would have a difficult time matching it,” he said.

Cohen views the gesture by Live Nation as entirely positive.

“The LN announce, in Canada and specifically in Toronto, in terms of a new program that temporarily waives all artist merch percentages in our local market, is a wonderful wonderful artist friendly initiative, one which not only doesn’t negatively affect non LN venues, and indie operated venues, but actually compliments them, for the majority of non LN club venues in Toronto don’t take artist merch percentages or recorded sales percentages,” Cohen said.

As noted in his social media post, Lee’s Palace and the Horseshoe Tavern have never taken a percentage.

“Thus, my hope is LN’s new merch initiative becomes a local permanent Toronto venue policy, at least in the sub 1500 cap venues, for all touring artists, or at minimum extended to local GTA artists — or Canadian touring artists —moving forward.

“I truly get and respect the venue side, I’ve owned multiple venues in Toronto and Ottawa for now well over 30 years, and if you’re paying $25,000 for a touring artist to play, say, History or the QET [Queen Elizabeth Theatre] or see crazy artist payment for an outdoor festival maybe it shouldn’t apply there,” he reasons. “However, your garden variety touring support artist is maybe making $250, $500, and tops $1,000, and most likely losing money on their support tours, so at that level of compensation, in my opinion, they shouldn’t have to also pay venue merch fees.”

Cohen then recalls a story from back in the mid-’90s as the “primary reason” neither of his venues take a percentage of merch or records.

“One of the very first events we produced circa 1995 was with Mike Watt (Minutemen, Dinosaur Jr., Firehose, Stooges). I had the luxury of sitting backstage with Mike while he reeled off story after story about touring in the early 1980s,” Cohen says.

“One point that stuck in my head forever was that he told me the only way his bands financially survived was taking the merch/record sales money to buy the next tank of gas for the van to get to the next gig. From the next day forward, I instituted a no-artist-merch policy.”