The Variable Cost of Celebrity Talent
Celebrity Economics 101: A Crash Course in Valuation
Ever wonder how certain acts can command astronomical talent fees, yet someone more talented gets paid pennies on the dollar? Or how one DJ can get paid $100k, while a band of 5 gets paid a fraction the amount?
Previously, there was a list of artist fees released online. Regardless if they were accurate or not at the time, they definitely aren’t now. Rather than discuss exact fees by basing it on a ‘rack rate’, let’s talk how we get to that fee and how to accurately price it out for a corporate endorsement or an event.
I get inquiries about celebrity talent pricing quite often (daily, actually) and it’s such a broad question to answer. The best way to go about it is to understand that there are no flat rates or rack rates in the industry. If you’re quoted a price by a talent buyer or agent, without he/she knowing the workscope, it means it’s priced at a base commission they want. There are exemptions to this of course, but generally, high-profile celebrities go by a ‘market price’. Talent costs fluctuate like stocks or real estate; one day they’re hot, the next they’re not. Let me go through my own personal valuation thought process. The following is not a concrete formula but hopefully it helps in giving you a better perspective.
Who is the celebrity talent and how culturally relevant is he/she at the moment? Have they been nominated for or won awards recently?
Supply/Demand — If the celebrity talent is extremely relevant and on international magazine covers regularly, the availability of the celebrity becomes slim. This may mean the musician/artist is on tour or off promoting a movie. Also, winning awards tend to spike the demand even more for the celebrity talent, since there is more press and publicity on them. This puts their price at a premium. Higher the demand, higher the price.
Where will the celebrity talent be when you need their services? Will he/she be filming for a movie or television series, on tour, on vacation? Will the artist’s staff be on a hiatus or on another tour for a different act (dancers, backup singers, band members)?
For location, it helps to know where the celebrity will be around the time you’ll be needing them. It’s a good way to determine travel costs, logistics, etc. It also helps to know if the artist is on a world tour, on vacation or on a honeymoon (yes, I’ve booked someone during their honeymoon before). All this is tough to find out, but if you have the information, it could help significantly. For instance, there has been a time when a musician had to decline an offer I submitted because he had been on hiatus for some time, and there wasn’t enough time for rehearsals for his band and dancers. Keep in mind that this is an important factor to consider.
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Mike Pio Roda is the founder and managing director of Pinnacle Live Concepts a Hong Kong based celebrity talent buying firm. Outside of talent buying for live events and endorsements, Mike dabbles in festival consultation, brand consultation and live event conceptualization for Southeast Asia. You can contact him through Pinnacle Live Concepts or through Twitter or LinkedIn.
