On tours, producers ask for a guarantee from presenters that usually is enough to cover their running costs for however long they will be there, then some percentage of the profit above that. It's a very complicated formula.
But as costs kept going up and tours kept getting bigger, that guarantee kept going up, which means they could not go into certain markets where the presenter could not afford that. A tour can't survive if it can only play the big cities.
Tiers were a way to lower the costs to try to get back into those towns that could not afford the large guarantee. In the tiers, actors' wages are based on the guarantee. If it's a smaller guarantee, you pay the actors less (thereby lowering your costs and allowing you to survive on the smaller guarantee).
There's probably something about giving the actors a little more if the show does really well and makes a huge profit, but I don't know that part.
Nothing matters but knowing nothing matters. ~ Wicked
Everything in life is only for now. ~ Avenue Q
There is no future, there is no past. I live this moment as my last. ~ Rent
"He's a tramp, but I love him."
