Research how many times the artist has been in your market. This can be achieved by either searching professional websites that aggregate this type of information, researching an artist's website or social networking site, or by asking the artist's agent for a list of past tour dates that cover your market. For developing artists, repetition in a market typically improves concert attendance. For top-selling artists, repetition may decrease attendance.
Evaluate the artist's box office receipts -- the amount of people who paid to see the artist and the price per ticket -- based on visits to your market. This can be done through professional websites that aggregate this type of information. These types of sites require a membership fee, typically on an annual basis. The box office data will give you a good starting point for your negotiation.
Review the total box office receipt information against the frequency of visits to the market. For example, if a particular band released a new album and then sold 300 tickets at $15 each, then four months later sold 200 tickets at $15 each, then a few months later sold 100 tickets at $15 each, you can deduce that their box office receipts are decreasing and prepare your offer accordingly. Note that for most artists, concert attendance increases around the time that new albums or radio singles are released and wanes slowly thereafter until another new album or single comes out.
Take the capacity of your venue and multiply it times the artist's average ticket price to determine the total amount that you can bring in from ticket sales. For example, if your venue capacity is 300 and the artist's average ticket price is $15 per ticket, then at a sold out show you would gross $4,500 on ticket sales.
Review the artist's attendance trend against your capacity to determine the most likely attendance rate at your show. Taking the example in Step 3, if you are going to book a band on their fourth visit to the market before they release another album or radio single, you can assume that they will sell around 100 tickets or less and should prepare your offer accordingly.
Determine, based on artist value, if you will offer a guarantee, percentage of sales or guarantee plus percentage of sales. If the artist is extremely popular you may have to offer a guarantee to be competitive, whereas unknown acts may bite on a percentage deal just to get their name in the market.
Draft a contract that includes contact information for both the venue and the artist. Include band details like performance name, number of performers and requirements. Also include the details the artist will need to promote the show, such as venue address, website, social networking sites, and information on how to purchase tickets. Add a section about the performance itself that includes the date, set-up time, sound-check time, stage time and set length. Include a section with your offer. If you are offering any type of percentage deal you will need to structure your offer to reflect the total possible gross, your predetermined production costs and the total possible net. Include a cancellation clause that determines which party has the right to cancel, under what conditions, and how they will be compensated. Also include a section that outlines both venue and artist obligations.
Submit the contract to the artist's agent and provide a brief explanation of how you arrived at your current offer, referencing data related to the artist's current market value, as necessary. The agent may accept your offer or return a counter offer for your review. An artist is only considered "under contract" once signatures have been obtained from both parties.