or any other grouping that lets him do intermediate cost-performance analysis.
A deal memo is created, which, like a project charter,
is a summary of the contractual agreement signed by the
promoter, manager and agent. It transfers the authority to
execute the plan to the tour manager but gives business
managers the authority to audit Mr. Merluzzi’s books—a
necessity given how many artists have been ripped off by
their managers in the past.
On the road, Mr. Merluzzi uses a stand-alone digital ledger
for accounting—a tool he created with software specialists
to meet his specific requirements. Documentation includes
the deal memo, price quotes, contracts, personnel files,
communication plans, itineraries and financial logs.
“The main cost drivers and risk factors, especially on a world
tour, are activities related to moving,” Mr. Merluzzi explains.
For instance, the European Union’s trucking laws require
drivers to adhere to strict work and rest schedules. This has a
huge cost impact, as he has to add more drivers to keep the
tour moving. Mr. Merluzzi also does an air versus ground
transportation cost trade-off analysis for many tours.
A 5 percent budget reserve is usually enough to account
for unforeseen expenses—which always occur—on the
road. If more contingency reserve is needed, it’s an indicator that something was overlooked in the planning phase.
Most of the risk is transferred to insurance policies, such as
worker’s compensation, public liability and show cancellation insurance.
V IE WPOIN TS
Mr. Merluzzi has two specific
reporting requirements: a weekly
expense report and a day-by-day
show-settlement report which
lists ticket sales, picked-up cash
Strategic Goals and
For most tours, these are finance-driven. Sometimes, though, the
aim is to increase an artist’s fan
base. In that case, success is measured by an increase in bookings
and/or ticket prices.
At the end of the tour, Mr.
Merluzzi completes the financial
close-out activities with the artist’s business managers, archiving the documents for future
Jan Pol, PMP, is a
a telecom company
in Rijswijk, Netherlands, leading infrastructure projects
for clients in Southwest Asia.
VOICES ON PROJECT MANAGEMENT
Getting the Show on the Road
It never occurred to me that those who manage concert
tours would place so much importance on such project
management best practices as cost, communications,
human resources and risk management.
“Whether it’s dealing with natural disasters, cargo that
takes priority over the band’s gear on an airplane or confronting an abusive band member, being a tour manager
is all about making sure the show goes on,” Mr. Merluzzi
says. “A well-thought-out plan is absolutely essential.” PM
RAISE YOUR VOICE No one knows project management better than you, the prac-
titioners “in the trenches.” So PM Network launched its Voices on Project Management column.
Every month, project managers will share ideas, experiences and opinions on everything from
sustainability to talent management, and all points in between. If you’re interested in contributing,
please send your idea to firstname.lastname@example.org.