VOICES ON PROJECT MANAGEMENT
Keeping a concert tour on track means having a rock star of a project manager.
BY JAN POL, PMP
As a regular concert-goer (and project manager in the telecommunications industry), I have always wondered what goes on behind the scenes to put together a rock tour.
While talking with Pete Merluzzi, owner of Blackbird Management in Sarasota, Florida, USA, I learned exactly how project management can help the music business.
Mr. Merluzzi has toured with some of the most popular rock musicians, including Counting Crows, ZZ Top, Billy Idol and Slash. His job is to get the artists to concert venues on time and on budget. One mistake can make for unhappy musicians, which can make for unhappy fans if the show doesn’t go well.
I was surprised to learn that he used many of the best practices from A Guide to the Project Management Body of Knowledge (PMBOK® Guide):
Mr. Merluzzi’s project team consists of a stage manager, carpentry manager (set builder), lighting manager, sound manager and video manager who run their own “departments.” Each reports to the production manager who, in turn, reports to the tour manager.
Methodologies and Best Practices
In tour management, there aren’t any industry standard processes, according to Mr. Merluzzi. Companies, business managers, artists and their management teams rely more on personal reputation than on process. He has set about to change that.
“Communications management is a huge and important factor in my work. Adapting to personalities, cultures and egos is a true differentiator for any tour manager with aspirations of a long-term career.”
Initiating and Planning
When Mr. Merluzzi plans a tour, he schedules four to six months for planning, which includes detailing requirements. For example, a tour may include 150 shows around the world, with venues that hold 1,500 to 100,000 people.
He starts by looking at his historical records and drafts a budgetary quote for time and cost.
Once the schedule is solidified, he reaches out to an established vendor base to ask for quotes. They are usually firm-fixed prices to mitigate cost swings and include some bottom-up labor estimates.
The data is collected in an Excel spreadsheet, broken down into a budget per continent, specific leg of the tour 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.
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 and taxes.
Strategic Goals and Success Factors
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 projects.
Jan Pol, PMP, is a project manager for Alcatel-Lucent, a telecom company in Rijswijk, Netherlands, leading infrastructure projects for clients in Southwest Asia.
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 practitioners “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 [email protected].
PM NETWORK DECEMBER 2011 WWW.PMI.ORG