Just what i was about to say in defence of cover bands, thank you George
We play for 3 odd hours, spend a fortune on our own equipment, PA system and transport, rehearse more frequently than many bands (our catalogue is 70 odd songs at present).... Bands playing as entertainment NEED to get paid otherwise they wouldn't do it. Even if they're getting £150 that's only covering costs for most good cover bands, and most pubs would agree that they're a fantastic crowd draw as opposed to a three band bill of local groups.
They should be looked at as different kinds of acts though, it's not really comparable.
Tribute acts piss me off though, they tend to get paid a shitload more simply because they write "tribute" on their ad material. But there you go.