by art » Tue Dec 13, 2011 9:55 am
Venues pay a guarantee to the promoter of shows, usually they off set this through sponsorship from media sources. Example, Big Dog 92.7 becomes the "official concert station" of a particular show, they then in turn present the performance and give away tickets, promote the concert as a lead up etc.
All performers have "Riders" which are costs that are paid to the performer,and covers there costs etc. These Riders also include "must have's" for the performers ie. food, drinks, dressing room set-up, venue access, accommodations and so on. These are all worked into the Promoters fee which would be presented to the venue vying for the concert to come to their venue.
Normally the venue has the final say in ticket pricing in order to budget realistically to create a break-even point with out a sell out crowd. Then, anything above and beyond the "budget point" should equal revenue to the venue in association with food, beverage, promotional sponsorship etc. This is obviously very laymen in term and bare bones, but an easy way that how venue/concert negotiations work.