Breakeven is one of those calculations that could be defined in a dozen different ways, but Prism's formula has been purpose-built from the ground up to ensure that you always have the most accurate data right at your finger tips.
Breakeven Calculation
Prism takes multiple inputs and variables into account, both for internal and external figures, all at once. Here is a look at how our breakeven formulas work:
Internal Breakeven: [(Total Internal Fixed Costs + Artist Guarantees + Adjustments with "Affects External Settlement Only" toggled off) - Flat Additional Internal Revenue)] / (Adjusted Ticket Price + Per Ticket Additional Revenue - Total Variable Costs Per Ticket )
External Breakeven: [(Total External Fixed Costs + Artist Guarantees + Adjustments with "Affects External Settlement Only" toggled off) + ((Promoter Profit % * (Total External Fixed Costs + Artist Guarantees + Adjustments with "Affects Split Point" on))] / (Adjusted Ticket Price + Per Ticket Additional Revenue Included in Net Gross - Total External Variable Costs Per Ticket including Promoter Profit)
Adjusted Ticket Price in the above calculations is the Ticket Price - Taxes, Facility Fees, and and Pre-settlement Fees.
Budgeted breakeven is based on Estimated/Offer Revenue and Costs and Actual Breakeven is based on Actual/Settlement Revenue and Costs.
Agency customers only have one view of Breakeven in Prism and it uses the External calculation described above.
This video walks breaks down an example so you can see how all the numbers play out:
A few quick notes
Many people only remove tax when calculating Adjusted Ticket Price, but remember that pre-settlement fees and facility fees are also removed in our calculation
If there is an artist Plus deal with a Net Gross % bonus, that % will also count towards Total Variable Costs Per Ticket. For example, let's take a Plus deal with a 50% Net Gross Bonus. In this case, if there was just one ticket tier priced at $20, without any other taxes or fees, $10 per ticket would be subtracted, since half of every ticket is going towards the artist payout. In other words, this 50% Net Gross Bonus is accounted for the same way a 50% of Net Gross Variable Cost would be.
Each ticket tier's breakeven calculation will be based on if all tickets were sold at the price of tickets in that tier.
Many clients choose to use the Ticket Average breakeven when estimating tickets for an event with many different price levels. The Ticket Average price is a weighted calculation (see below).
Per ticket Additional Revenue factors into the Ticket Average breakeven calculation using a weighted average. For example, if there are 3 tiers with an Additional Revenue line item applied to each individual tier, Prism will take the weighted average of those line items.
Dynamic tickets are factored into the Breakeven calculation as flat Additional Revenue
Adjustments factor into the breakeven calculation as follows:
If “Affects External Settlement Only” is off, then the adjustment is included in the External and Internal Breakeven calculations
If “Affects Split Point” toggle is on, then the adjustment is included in the Promoter Profit calculation, which is included in the External Breakeven calculation
We can remove breakeven from displaying on offers! If you'd like us to make this update, please reach out to your Client Success Manager or to clientsuccess@prism.fm (Note: this is an account-wide setting.)
Weighted Ticket Average
Ticket Average on Breakeven calculations will be a weighted calculation based on how many tickets are allocated to each tier and the price of each.
Would you like a more in-depth explanation of how we calculate breakeven? Reach out to your Client Success Manager (or clientsuccess@prism.fm) to learn more.