The debates come and go about the £40 to £50 a night Mobile DJs, but when you delve into the subject a little deeper, some interesting facts turn up that put a slightly different perspective on things….for instance whether you put a simple question to a landlord or manager of a pub “Why do you pay Pub DJs ‘XX’ amount?”, the answer invariably seems different but with a common denominator – they always appreciate the DJs ability – but can not afford to increase the money!
I put the very same and one or two other subtle questions to an ex-regional brewery manager recently on behalf of the DJU community forum and DJ Associates DJ Association expecting the same usual brief answer of sorts but I was given an explanation and ‘enlightenment’ to a perspective of ‘our business’ which I hope you find as interesting.
Example Case I was given a Public House investment ‘case example’ where the particular brewery left no margin for live music or DJ entertainment. The brewery looks upon a Pub as a thriving community focused business. Statistics and changes in trends motivate particular investment opportunities. Many considerations have to be taken onboard before they invest, say £230,000 on extensively refurbishing the interior and exterior of a pub.
Focusing on two key areas, distinguished by fixtures, fittings and layout, good quality bar food is served in an informal, relaxed environment – the important element for a great community / family pub. Including modern kitchen facilities, patio and extensive garden area for the summer months and substantial staff/family accommodation, grounds include ample car parking facility’s, etc, etc The projected turnover of such a pub is realistically in the region of £500,000 per year.
So I asked if ‘this type of pub venue’ would benefit from featured entertainment? Simple answer, not from his point of view, but the brewery would usually leave the end decision to the investor / landlord if they ‘allowed for the investment’. With reference to his position, he would have had the final word in the past! Further, why should a brewery subsidies, for example, £10,000 per year from their profit margin towards entertainment / DJs earnings when they can improve greatly other aspects of the venue?
With the changes to the Licensing Act and meeting the statute requirements, health and safety, fire regulations, inspections, noise limitation, etc – all and a lot more play an important role in whether a Pub remains or is turned into an entertainment venue. It’s not just about throwing money into a venture. Other logistics are taken into consideration and constantly evaluated.
For such a Pub with a projected turnover of £500,000 a year, the brewery would be looking for £100,000 Capital (minimum) investment given their £230,000 investment. He said that any allocation of entertainment would have to come off the bottom line at the end of the day, for example, in explaining some of the requirements of contract with respect to a landlord, the rent is payable monthly in advance by direct debit with a deposit that is one quarter’s rent deposit. The annual rent requirements for his example would be in the region of around £65,000. Responsible for repairs, the Landlord insures building and recharges, fully repairing and insuring lease. Decoration is to be carried out by lessee at least every five years. There is no dilapidation or decorations fund. From the machine income, the lessee will receive 50% of net income after duty, VAT and rent. Investment will include Security Deposit and legal fees, stamp duty and fixtures and fittings (including purchase of existing fixtures and fittings where applicable). Typical Lease terms – 15 year nil premium lease, assignable after 3 years, full beer and machine tie lease.