Building investor %age

[BrotherMysterio]

45% off the top, they do concessions, they take care of the tickets and handle all monies and take 45% of our giftshop!! My wife told them to get bent. She didn't even have the nerve to tell us face to face, or even on the phone and had her husband do it. Told them they wasted a month of our time. I bet what happened is her "friend" said "ohh honey you need to get paid more than that" ... they're line always was "We use to get $800 a night for letting folks do a dance". So we told them "good luck making $10,000 with your redneck junk auction. (they have a ton of crap the want to start auctioning off. Badly stained clothes, old broken toys, etc.) Not meaning to sound so rude about it, but it just ticks me off.

Yeah, that was precisely the eventuality I was going on about before.

Like I said, if you get a deal with a landlord, it is what it is, and if it works out for you, then that's fine. That penultimately proved to be the case at the then agreed upon 30% off the top, per the original contract, which Greg astutely pointed out as a great opportunity.

What I took major umbrage with, which in fact was what 95% of my posts were about, was what ultimately ended up happening, that this lady was suddenly talking up all this "partner talk", using terms and suggesting arrangements and conditions that only an equitable partner with an equal investment should have any right to suggest, or expect. Only someone who treated you as an equal partner in this should ever talk about large precentages and overseeing half of the operation and so on.

To that end, it all sounded fishy from the very start, and, as it happens, it was.

I dont know where your located but did you think about using a tent.

I've priced tents, and I found it cheaper, and more effective, to build a raised deck and a roof. JB outlines that approach very thoroughly in his books.

C.

[BigT]

I agree with a lot of the others here that this is not a good deal for you, but I wanted to add one more thing. This is not an unusual financial model in the concert business. My wife runs such an operation here in NC, and the way it works is the promoter rents the building for a set fee, and brings in the talent. Promoter gets the door, owner gets the rent plus 100% of bar/concession sales, and they try and get 25% of merch. They also get 25% off the taco truck parked in the parking lot.

Promoter is also responsible for things like event insurance (the building owner is as well), security, and production (sound and lights). The production costs for the promoter are not much - usually around $2500 to $3500 since these venues cannot usually support really big tours. They pay around $600 for security and other personnel so their real cost is in the band ($25K for a big name). They can then turn around and sell tickets at $50+ and make a great profit provided they have big ticket sales. Cost is relatively low for them other than the band.

Now look at our (the industries) business model. We spend a lot in production ($75k+), and a lot more in personnel, insurance, and other miscellaneous. Our ticket prices are much lower so we need to run many more nights to recoup our expenses. Rent is our biggest expense.

Business right now is really slow for these venue operators because there are not a lot of bands touring anymore so the years of running 45 to 50 shows a year has dwindled down to very few, and none of them very profitable. This means they have to get creative and find other uses for their buildings, but they do not understand our business model.

[BrotherMysterio]

I agree with a lot of the others here that this is not a good deal for you, but I wanted to add one more thing. This is not an unusual financial model in the concert business . . . This means they have to get creative and find other uses for their buildings, but they do not understand our business model.

Yeah, but this lady doesn't understand business, either. You make an excellent point, and provide an excellent analysis, however, the venue in question is a crappy little dance hall in Nowheresville, Arkansas that hasn't seen a dime, nor a Texas Two-Step, in literally seven years. It's just been sitting there, leaking, rotting, collecting dust and junk, for seven years. Ergo, Frightener and "Dance Hall Lady" were literally godsends to each other. He gets a great building to run his first year, and she gets to turn a profit on a building that could be on it's way to being condemned if she doesn't start taking care of it and doing something with it.

And then she decided to get all podunk and greedy, and start trying to stick him for almost 50% upfront, plus a huge chunk of everything else.

Basically, she did him a huge favor. She pulled these shenanigans while they were still talking, well before they got in bed together. Now he has other options and she is stuck with the same crappy building, and no shot of seeing another dime.

C.

[Frightener]

He's right. We're not moving into our #1 backup building. $2k rent but we pay $1k each month and the other half in a lump sum at end of event, to help us get going.
The property also has a 1,900 sq ft home on it. We can rent to own, with proper papers and all, save 45k from listing price and the lump sums have 0 interest, meaning the lump sum of $12,000 gets taken off the... principle? i think, what we actually owe for the property.

We plan to use the front part of the lot for a "Park and Sell" for vehicles, fixing the house for rent, and all said and done, we only have to pay about $1,200 rent on our building. Of course this is the projected PLAN and we all know how "plans" sometimes go.

We've got 60% of the planning done, trying hard to design rooms w/ no help of animated props to keep costs down and put that money into marketing. We've decided to add to our marketing budget as well.

We should be getting power hooked up in the next week, we'll try to post pics of the place and any progress, if you fellas are interested.