Those ‘Pesky Fees’ Keep Dollars in KC
2015-08-06 CATEGORY: Starlight
Our continuing Q&A series allows Rich Baker, Starlight president and CEO, to share his thoughts and insights about topics related to our Broadway season, venue, industry trends and more.
Q. Why does Starlight add fees onto its ticket prices?
A. I’d like to try to clear up some common misconceptions about fees or, as you might call them, those pesky extra charges that everyone hates. In truth, fees are a necessary part of our business, and I’m happy to have this chance to explain why they are so important to Starlight.
I often hear from our guests, both in person and in our survey, comments like “Why can’t you just include everything in the price of the ticket? Why nickel-and-dime me to death with add-on fees?” Sound familiar?
It actually would be much easier for our accounting staff if Starlight could do it as you request, but the way contracts are negotiated with touring shows makes such a scenario detrimental to Starlight. An “all-in” price would send more of your hard-earned money out of town, rather than keeping it here and using it to make Starlight a better venue each year.
Let me start by explaining a bit about our business and why it works the way it does. Whether we’re discussing a concert or Broadway musical, the process is much the same. To attract shows to play Starlight, we must promise booking agents that we will pay them a fixed amount of money. This is called the “guarantee,” and we must pay it whether we sell one ticket or tens of thousands. This guarantee is designed to cover the costs the producer incurs in bringing the show to Kansas City and putting it on stage at Starlight. In other words, most of the time the touring show has very little or no risk in the deal right from the start.
If the show sells enough tickets to cover the guarantee and still has money remaining, Starlight first gets its out-of-pocket expenses repaid (i.e. stagehand costs, equipment rentals) along with a reasonable venue rental charge. Then, if there is still money left, the show and the venue split the remaining “overage” funds but in a ratio that heavily favors the touring show. The split might be as low as a 60-40 ratio to a high of 90-10 in their favor.
I can almost hear you saying right now, “So what does this have to do with fees?”
Well, the split of monies described in the paragraph above refers to ticket proceeds only. In other words, anything included in the published ticket price is shared with the out-of-town producer of each touring show. Conversely, any fees separate and apart from the ticket price are kept solely by Starlight. If we included our fees in the published price of the ticket, we would often be required to give 60 to 90 percent of those fees to the shows.
So, while you may loathe the add-on fees that Starlight and all others in this industry employ, the practice simply is the best way for Starlight to keep these funds rather than give them to the show. As I said at the start, I wish there was a friendlier way to handle this for our guests, but I hope that now you better understand why we handle pricing this way. Maybe you’ll even cringe a bit less the next time you see a fee added to your ticket or parking pass. I hope you’ll consider it doing your part to help keep more of your dollars in Kansas City, and I, in turn, pledge to use the funds to improve the Starlight venue for you and 250,000 other guests each year.