THE TRUTH ABOUT HIRING A TALENT BUYER VS BUYING IN HOUSE
TALENT BUYER VS BUYING IN HOUSE: WHICH IS CHEAPER?
Are you trying to answer the age-old question of whether or not talent buyers are cheaper than buying in house? Before we help you make that decision and dive into the details below, it is important to note that these are hypothetical figures and situations. It would be impossible to create an apple to apple comparison knowing there are far too many variables to consider. But to simplify things we are going to look at six months of the financial impact of talent buying in house versus with a third party talent buying agency.
AVERAGE MONTHLY SALES & EXPENSES (IN-HOUSE)
TALENT BUYER SALARY
AVERAGE MONTHLY SALES & EXPENSES (3RD PARTY TALENT BUYER)
TALENT BUYER SALARY
HOW DID WE GET HERE?
Historically, a massive portion of Tribal casinos, resorts, and many other venues have outsourced their talent buying. This is so common because the best talent buyers aren’t willing to be tied down.
They know that a full-time desk job at a single venue isn’t nearly as profitable as managing several accounts with production legs attached to them. Experienced talent buyers also know it will also significantly decrease their time/ability to network extensively.
While your working 2,080 or 87 days a year inside your office trying to balance your family – work-life, successful talent buyers are networking at IEBA, APAP, and Pollstar Live while aggressively pursuing more properties.
There are exceptions and some in house talent buyers do get the exact same freedom and wages as an entrepreneur or talent buying agency would. But in general, it is rare that you do stumble across a killer in house talent buyer, are able to hire them for dirt cheap and retain them for any substantial amount of time.
WHAT ARE THE FINANCIAL IMPACTS OF HIRING A TALENT BUYER IN HOUSE
In the PNW region hiring an in-house talent buyer for a 1,000 + seat venue will cost your facility anywhere from $75,000 to $125,000+ a year.
If you are a tribal casino executive, resort entertainment manager or venue rep then you also know HR will add another 40% or so for the cost of training, benefits and overall onboarding with your property.
These examples are based on a $1,800,000 annual entertainment budget for a Tribal Casino.
The case study also excludes all production costs while assuming the in house talent buyer makes a fair $110,000 a year. We are also assuming that he was outperformed by the 3rd party talent buyer during the last six months of the year. Most importantly we have set our expectations very high for the venue and in house talent buyer! Many Tribal Casino properties struggle to make half of their money back on ticket sales and that’s including any hypothetical gaming attached to each show.
6-MONTH CASE STUDY (IN-HOUSE)
As seen below, the in house talent buyer on average booked 3 national acts every 30 days, generated $115,000 in ticket sales and spent about $150,000 on talent fees over the course of six months. You can also see that an in house buyer is, paid the same regardless of how many acts they book or tickets they sell. This is the absolute best-case scenario for a talent buyer working in house (making 75% – 100%) of the artist fee.
6-MONTH CASE STUDY (3RD PARTY TALENT BUYER)
This example below is closer to what Seattle Entertainment Group produces when building an entertainment program. Here our assumptions show the 3rd party talent buyer making an honest 10% on each act they book. The second projection shows the 3rd party talent buyer averaged the same 3 shows every 30 days, but generated over $161,000 in ticket sales and reduced the monthly talent fee expense by about $15,000.
THE TRUTH ABOUT BUYING TALENT IN HOUSE:
- In house talent, buyers are more difficult and to retain and can be expensive to train
- In house talent, buyers have total control over negotiations
- They are paid the same whether the offer gets negotiated lower or not
THE TRUTH ABOUT USING A TALENT BUYER:
- You get what you pay for i.e.negotiations, execution, results, communication, etc.
- The more experienced are usually more expensive (valuable)
- Hiring the wrong vendor can permanently damage your reputation without you knowing
Talent buyers are cheaper than buying in house. Buying in the house is also more difficult to manage. Always make educated decisions based on due diligence and research.