I would love an inside look on the business of a band. I'm not really a business guy so maybe it's just my love for the music that makes it so interesting to me, but my curiosities spike when we talk about the numbers from a concert and how that translates to profits (or loss) for the band members.
It's interesting stuff. From the outside, without giving it much thought, it is easy to think along the lines of, "Well, if they sell X tickets for a show, and the tickets cost Y, the total is Z, so let's assume the band gets 50% (or whatever number), and the rest just gets split between all the other people who get paid." But that isn't really how it works at all. The model is more like this:
-Band management negotiates with local promoters for their guarantees for particular venues. The promoter then negotiates directly with the venue, local radio stations, vendors, etc.
-Contract is ultimately agreed to that entitles "the Band" (not the band members, but rather the band's corporate entity) to a certain guaranteed amount for playing the show (and there can sometimes be contingencies that cause the guarantee to fluctuate). The contract will also specific how much others get paid (the venue, outside security, the promotion company, local advertisers, ticket sales company, etc.).
-The Band (i.e. the corporate entity) gets paid their guarantee (which is a MUCH smaller amount than you might think) and then has to pay a bunch of other people: their management staff, their crew, the lighting and production company, whoever is moving all the stuff, hospitality (hotels, food, and transportation for everyone), their own security (if applicable), etc. Their are a LOT of people who need to get paid.
-Whatever money is left is held by the Band (the entity again), and the band members usually get a fixed, predetermined salary at regular intervals, and then probably pay out "bonuses" at the end of the tax year so the entity doesn't get taxed on money it is holding, and the band members themselves have to pay for their own health insurance and all that stuff that normal people get from their jobs.
There are variations, and there are lots of other steps and details that are left out, but that is pretty close to how it typically works.