Even so, why would a venue pay him as much as $60 million for only two years?\u00a0Sammataro, who has represented artists such as Enrique Iglesias and large studios such as Sony and Warner Brothers, explains that economics in Las Vegas differs \u201cfrom a traditional analysis conducted by a venue\/promoter in pricing a concert.\u201d<\/p>\n
Sammataro said the \u201cvenues generally hold capacities between 3,000 to 5,000 concert-goers. The successful hotels can nonetheless pay arena prices, i.e., capacities of 14,000-plus, because the concerts drive people to the hotel, as well as the hotel\u2019s restaurants, bars and casinos.\u201d<\/p>\n
For The Palms, signing Marshmello to \u201can industry-shaking reported $60 million deal was presumably about more than attracting concert-goers and filling up the biggest party space in Vegas,\u201d Sammataro explained. \u201cIt was the ultimate headline to punctuate its $690 million reinvention.\u201d<\/p>\n
He said that Marshmello was part of The Palms \u201cre-brand, and its promise to \u2018redefine the daylife and nightlife experience in Las Vegas.\u2019 Kaos\u2019 goal was not to beat other clubs. It was to compete with festivals by having DJs and other artists play to indoor and outdoor crowds simultaneously, while filling its 39 cabanas, bars, and selling food and booze packages,\u201d Sammataro added.<\/p>\n
Marshmello\u2019s deal also signaled that the market for resident DJ\u2019s was \u201cstill robust,\u201d Sammataro said.<\/p>\n
At some point, there had to be a ceiling on the highest-paying residencies, as the price tags had been inching up steadily until Marshmello\u2019s industry-rattling deal,\u201d Sammataro explained. \u201cWe\u2019ll see if this exit is an outlier, or if it will mark a downtrend in what is a cyclical business.\u201d<\/p><\/blockquote>\n
On a related front, electronic dance music (EDM) artists, such as Calvin Harris, David Guetta, and previously Avicii, \u201chold particular appeal in that they do not require the expensive staging necessary for other acts,\u201d Sammataro said. \u201cFrom a production cost perspective, it\u2019s one guy and a laptop. It also marked a departure from what had been a trend towards smaller, more intimate, and customized experiences, marked by the Jewel at Aria, Intrigue at Wynn, and Park MGM\u2019s On the Record.\u201d<\/p>\n
Contract Specifics<\/h2>\n
As far as a contract for a DJ like Marshmello, \u201ca smartly-drafted contract contains built-in outs,\u201d Sammataro advises. \u201cThis should be a front-end negotiation, with out-clauses scheduled at designed intervals — i.e., every six months — and tethered to specific performance or revenue-based thresholds.<\/p>\n
\u201cThe ability for a venue to secure this downside protection is dependent upon negotiation leverage. High-powered talent will insist upon true guarantees or a \u2018no cut\u2019 provision,\u201d he added. Sammataro said that, \u201cTo the extent that there are not expressed contractual provisions allotting for a buy-out and specifying the precise economic terms of the buy-out, it all comes down to, what else, money.\u201d<\/p>\n