Highway Blues

Even as gas costs have virtually doubled during the past two years, the show must go on. Acts, unwilling to relinquish a vital revenue stream, are touring as much and as far as ever. It's just costing them more to do it.

"From our standpoint, we've seen virtually no change," says Trent Hemphill, president/CEO of Hemphill Bros. Coach Co., which has buses out with such tours as Madonna and Tim McGraw/Faith Hill. "We've had a huge first half of the year."

Other tour bus and support companies report similarly strong business. But there is little question that touring is more expensive in 2006.

Most tour buses have a 250-gallon tank, which takes $500-$600 to fill, compared with $250-$300 a couple of years ago. "A full tank will run you about 900 miles," says Wayne Linder, operations manager for Nashville-based Pioneer Coach. "A tour generally averages 7,000-8,000 miles a month."

That's more than $5,000 per month in fuel costs for one bus. And for tours that use more than one bus—as many do—the numbers add up pretty fast.

"We used to budget tours at about 30 cents a mile for gas, and now we're up to about 60 cents a mile," says music business manager Jamie Cheek, CPA at Flood, Bumstead, McCready, McCarthy. "If I have an act that's about to go on a 40-day tour and they've got five trucks and five buses, and a 40-day tour could be over 20,000 miles, that's almost an additional cost of $6,000 a vehicle. So if I have 10 vehicles, that's an additional $60,000."

That money comes directly out of the artist's bottom line, Cheek says. "But the flip side of that is, if it's five trucks and five buses, that's a big tour, and chances are if I look at the overall budget, fuel is maybe 2%-3% of my overall costs," he points out. "If your overall expenses are $5 million for the tour, $60,000—though I don't want it to be there—is not going to stop me from touring."

These increased costs have the greatest impact on the tours of developing acts, for whom every penny counts. "The most material impact would be for a baby act to midlevel artist that got an offer to go out on a tour opening up for somebody," Cheek says. "Maybe the label's supporting it, maybe it's just about breaking even, but it's more of a marketing opportunity. And they're out there with just one bus and a trailer, maybe a truck. If I ran some budgets and it was so tight that we were at break-even and then fuel prices go up 10%, I could have a shortfall of maybe $1,000-$2,000 that I didn't expect to have, depending on how long the tour is.

"For a smaller act, that's a sting, and we'd have to try to make that money up somewhere, maybe go back to the bus company and ask for a reduction in the monthly rent," Cheek says.

Daniel Smith, who leads indie pop/gospel outfit Danielson, just left for a tour in support of his recently released Secretly Canadian effort "Ships." Speaking from a cell phone on his way to Louisville, Ky., he says he looked into purchasing a diesel van for the current tour but opted for a lighter haul instead.

"In the past, we've had a van with a trailer," he says. "This time, we just went with a 15-passenger to save on gas, and it's eating up gas real good. There's very little you can do. You put out a record, and you have to support it, so we're hoping we can make it up on merchandising."

Seattle electro-pop dance outfit U.S.E. spent about $10,000 for gas on its tour last winter—nearly double the cost for a similar-sized 2004 trek, the band's publicist says.

Xander Smith, leader of Los Angeles-based shoegazer act Run Run Run, is plotting his band's first East Coast tour in support of "Endless Winter" (Song and Dance), and says gas has become "an obsession."

"A lot of bands finish shows and chase women, but we're hustling merch and figuring out new places to stay," Smith says, adding that the band's lighting director has taken to sleeping in the van to make sure no one steals the gas.

"The only reason we just completed a West Coast tour was to raise enough money for gas to actually get to New York."

These rising costs have not been passed on to consumers via ticket prices—yet.

"Whether at the end of the day fuel prices have made [acts] ask for more in guarantees, which could ultimately raise ticket prices, I don't know if it's had that effect yet," Cheek says.

With tours planned months—if not a year or more—in advance, including budgeting, guarantees and ticket prices, such increases likely would not be seen until 2007. "A lot of the tours we're doing may have already been in motion when prices jumped," Hemphill says. "Maybe next year we see an effect." ••••



Additional reporting by Todd Martens in Los Angeles.