Factoids from the latest Billboard Boxscore:

• That weird Kenny Chesney-Keith Urban-Sammy Hagar tour grossed $3.2 million from a single show at LP Field in Nashville. It’s not a small place—50,000 capacity—but the total gross shows that ticket prices for country shows (traditionally reasonable) are heading into the stratosphere. Seventy bucks a ticket for a stadium show for a hat act!
• Tom Petty made $5.5 million from five shows in a twelve-day period, and that doesn’t include two sold-out NYC-area dates, which would have increased the total to $8 million or so. The tour comprises some forty shows in all; you do the math.
• Neil Diamond is raking in $1.2 million a show.
• The decline of the dollar is great for stars touring overseas; Dolly Parton made $1.5 million from two shows in Ireland. And Diamond made almost a million from a single show in a smallish 9000-seat hall in Munich.
• A million dollars a night is just about the norm now for all sorts of acts: R.E.M., Jack Johnson, Barry Manilow, Dave Matthews, Pearl Jam and Iron Maiden (!) among them.

This is part of the reason Live Nation, which was Clear Channel’s concert production arm before splitting off, is making those so-called “360 deals” with artists. This is where the money is!

The economics of a big stadium concert are complicated, but remember that the gross is just the beginning, and the vast part of it goes to the artist*.

Ticketmaster fees (and remember that Live Nation is making moves to supplant that company’s hegemony) can total $5 to $10 a ticket.

Parking is another nice money stream, though some of it goes to the venue.

The promoter or venue typically gets a piece of the merchandise, as well; that’s part of why t-shirts cost $40 in an arena. The money stream here varies wildly depending on a show, but might be $10 to $20 per concertgoer.

Which all means that ancillary spending at a typical concert begins, conservatively, at about 25 percent of the gross and goes up from there—totalling hundreds of thousands of dollars, or perhaps even a million, at certain shows.

So remember that the problems in the music business are affecting the labels, not touring acts and concert promoters.

Here’s the top ten tours from the first half of the year, from Billboard:

1. Bon Jovi, $112.4 million.
   Spice Girls, $70 million
   Police, c. $60 million. (Billboard didn’t give the six-month figure, but said that the band will conclude the 2007-2008 tour in August with grosses of about $360 million, the third-highest-grossing tour of all time.)
   Hannah Montana,  $45.3 million
   Trans-Siberian Orchestra, $44.8 million
   Bruce Springsteen, $42 million
   Van Halen, $40.2 million
   Michael Buble, $36.6 million
   Take That, $32.5 million
   Jay-Z/Mary J. Blige, $30.3 million

Again, with the exception of the Police, there are figures from just a six-month period from November to May.

* I’m always surprised by people who say, “Well, the artist doesn’t get all of that!” The artist gets 90 or 95 percent of it. They can do the math: 17,000 seats times an average ticket price of 80 dollars is $1.36 million. Why should they show up for less?

From the Wall Street Journal and elsewhere, noise that the company holding one of the smaller financial reins on Michael Jackson is trying to persuade him to create some sort of long-running performance or show, à la the Las Vegas residencies of Celine Dion and others.

As usual with Jackson, the story raises more questions than it answers. From the Journal:

Colony Capital, which owns the Las Vegas Hilton and is a major shareholder in closely held Station Casinos, is in discussions with Mr. Jackson to get him back onstage and in the spotlight via a long-term stand in Las Vegas. It also wants the singer to sell his Neverland Ranch, the home of his private amusement park and menagerie and site of his controversial sleepovers with young children.

Colony and its executives aren’t working with Mr. Jackson as managers or personal advisers. But they may nonetheless have a better chance of succeeding with Mr. Jackson than the many figures who have served in those capacities, thanks to Colony’s major leverage with the pop star. The private-equity group in May bought from hedge fund Fortress Investment Group a $23 million loan backed by Neverland, in Los Olivos, Calif. Mr. Jackson, 49 years old, was in default on the loan and Fortress had initiated foreclosure proceedings. After buying the loan, Colony negotiated some short-term breathing room for Mr. Jackson. Under discussion is a scenario in which he would be allowed to put off making payments for a while, in exchange for more money further down the road.

You’ll recall Jackson was on the verge of having the ranch sold on the courthouse steps in March. This embarrassing scene was staved off, apparently by Colony. Besides the disgrace of his little pleasure palace’s being sold to the highest bidder, Jackson also, by some accounts, would have been facing a steep tax bill, as much as $5 million, had it been sold off at a good price. It was also reported at the time that Havenhurst, the Jackson family manse in Encino, had been mortgaged and that Jackson had regularly been faced with default on that loan, said to be $4 million.

Those numbers, however, may just be a sideshow next to the main Jackson money issue. The big debt is said to amount to several hundred millions dollars and is supposedly backed by his music publishing holdings, specifically his half interest in Sony/ATV. The NYT in 2006 reported that Sony, which owns the other half, had agree to advance him $300 million, guaranteed by half of his interest in Sony/ATV.

Nothing further has been heard about this deal, but if in the end it went through successfully, in crude terms it seems that Jackson, rather than living off the income from the holdings, has in effect paid for his crazily profligate lifestyle by selling off the holding itself. (Note that this is all as an alternative to actually working and earning more money as well.) If it did go through and the numbers in the stories were correct, Jackson now holds the equivalent of 25 percent of a company he used to own all of, and which a few years ago was said to be worth $1 billion.

Even that would keep most folks in the necessities, but Jackson’s idea of them is different from that of most people. At the same time, he may have other, unknown debt obligations—there were mentions of multi-million-dollar tax obligations during his trial, for example—that may deplete even that income.

All of which may or may not explain why a guy who settled hundreds of millions of dollars in debts recently is still having trouble dealing with the demands of a couple of smaller ones amounting to just a few percentage points more.

Back to Colony and Jackson and Las Vegas. The question here is why Jackson needs Colony to set him up with a performance situation. He’s a big star, and has performed live in the past and knows how to set up a tour. The Journal story tiptoes around this:

Since Mr. Jackson’s 2005 acquittal on child-molestation charges, various entertainment-industry executives have pursued some kind of splashy comeback for him. For the most part, the singer hasn’t played along. In February he backed out of a planned performance during the Grammy Awards telecast. Around the same time, he also declined a proposal to perform for 10 nights at a London arena. People who have spoken to Mr. Jackson say he has simply not felt up to the rigors of performing after his lengthy legal ordeal.

That’s bullshit, because Jackson stopped making public appearances, with rare exceptions, long ago. During that time, the money available to him from touring has grown extraordinarily. Jackson knows that artists nowhere near his stature have tours grossing in the nine figures.

I think that if Jackson were capable of touring he would have already. As Hitsville has written before:

The touring issue brings up perhaps the saddest factor of all in the Michael Jackson story. As Springsteen, U2, the Eagles and the Stones know, a big-ticket A-level star tour is a tonic for the troops. Jackson could launch a $100M- —or $200M- —grossing tour whenever he wanted to. He could also take home $10M or $15M with just a two week run at MSG or Meadowlands. He’s also had comparable offers from promoters in Las Vegas and London.

Jackson’s history with tours is checkered, of course, but this seems an obvious way to stave off financial problems. (And he could make even more if he kept his ambitions reined in and did a disciplined greatest-hits show with a minimum of spectacle.) The troubling question about Jackson is this: Is a tour or a series of performances the trump card, deep down inside, he knows he can put on the table when the need arises? Or is his mental or physical condition such at this point that it’s out of the question? If it’s the latter, Michael Jackson’s last years may turn out to be truly unpretty.

p.s. : I was just looking up the derivation of the name “Sony/ATV” on Wikipedia and came upon this little bit of internet ineffability on that page, under the heading “Notes”:

As of June 2008 With Michael holding 50% of the Beatles catalog and Sony/ATV investing in new music publishing’s Michael makes a yearly earnings of $350 million dollars a year. Michael owns 50% of Sony/ATV catalog, the only reason Michael is not paying off the loans is because the Sony/ATV company is reinvesting in new music and buying small publishing companys up. like last year Sony/AVT brought the ‘Famous Music’ publishing company for $370 million. This all add to the value and income of the comany. Remember Sony/ATV was value at over $900 million in 1999 (9 years ago), before they brought a Country catolog for $140 million and before they brought the ‘Famous Music’ publishing company for $370 million and before tens of thousands and news track were added to the comany. now Sony/ATV has an estimated value of between $6 to $7 Billion and Michael still owns 50% and the media keep writing how broke he is. As of 2008 Sony/ATV is valued at 6 billion dollars more then any other music Publishing.

Michael will continue to hold on to his 50% share of the company and the company will continue to reinvested and buy other publishing companys up. Michael will continue to extend his loans and give it less than 5 years, Michael will probley have loans of over $500 million and the media will continue to make out he’s close to bankruptcy, but the company then will be worth between $7 to $9 Billion.

Yesterday (“Getting the Stones story wrong”) we saw transcontinental confusion, from London (The Observer) to San Fransisco (Wired News) about rumors that had the Rolling Stones working on a 360 deal with Live Nation.

Today, Reuters has a story saying the Stones are denying the reports. Well, sort of:

“We are not in talks with Live Nation in connection with any record deal,” London-based Rolling Stones spokesman Bernard Doherty said on Monday, reading from a brief statement.

If the denial is to be believed, the Observer was talking through its hat. The story included this assertion: “It is understood that Universal will have a role, with Live Nation licensing new versions of the [Stones’] catalogue to the American label, which would sell them online and as CDs.”

Whether the comment was designed to smooth ruffled feathers at EMI or just to keep attention focused on the band isn’t clear. A touring deal between the Stones and Live Nation will at once be more and less significant than Madonna’s or Jay-Z’s. It certainly won’t be a long-term set-up; Mick Jagger is 65, fifteen years older than Madonna, and sooner or later exhaustion or, sad to say, death is going to catch up with the band.

On the other hand, the Stones’ tour grosses are in a class by themselves; if Live Nation signed the band tomorrow just for touring (not even merchandise) and gave the group an advance equal to the gross of its last tour, that figure ($550 million) would be bigger than that of the Madonna and Jay-Z deals combined.

Meanwhile, Wired corrects itself for a mistake it didn’t make. Originally it repeated the Observer, which said the Stones had been with EMI for 31 years; Wired now says the band had only been with EMI since the conglomerate bought Virgin. But this is true only for U.S. releases; the group did have EMI distribute Rolling Stones Records for the rest of the world since the late 1970s. (My source is Old Gods Almost Dead.)

Wired doesn’t correct its figure for the group’s last tour grosses (”nearly three quarters of a billion dollars”) and displays its unfamiliarity with the concert-ticketing industry as well:

When the company’s contract with TicketMaster runs out next year, it will hopefully bring more competition to the online ticketing market, though we’re not holding our breath.

The company isn’t going to compete with Ticketmaster; it’s going to take the exorbitant and unnecessary fees the company collected for itself!

The Observer reports, and Wired’s Listening Post blog picks up, a story that the the Rolling Stones will soon sign a 360 deal with Clear Channel Live Nation. As is typical in such stories, they are largely promotional, don’t examine the implications of the figures they are reporting, and are contradictory of other recent reportage.

From the Observer:

The Rolling Stones are on the verge of ending their 31-year relationship with EMI, dealing a blow to private equity owner Terra Firma, led by Guy Hands, which acquired the label in a £3.2bn deal last summer.

Sources say the group is close to clinching a deal with Live Nation, the world’s largest concert promotion firm, which would market its back catalogue, depriving EMI of around £3m a year. Live Nation, which last year poached Madonna from Warner, would also take highly profitable merchandising and touring rights for future Stones shows, some of which have grossed as much as £750m.

Note that the “31-year relationship” refers only to sales outside the U.S. Even by the lower standards of UK journalism, this is pretty silly. It’s unclear if the Stones will take its catalog with them; the NYT reported yesterday that “If the Stones left EMI, it would have little impact financially, because the company would still have the rights to the band’s catalog.” One of the two stories is 100 percent wrong. Also, the implication of the next sentence is that Live Nation is also taking the Stones’ touring business away from EMI, which is not true.

The Observer story says the band makes EMI three million pounds a year; Wired reports this as three million dollars a year. Fortunately, the Observer is a British news outlet, and not a Japanese one, so Wired is off only by a factor of two. Its hard to believe, however, even the Observer story is correct. If the Stones earn the company only the equivalent of $6 million (which is roughly what £3 million is) a year, that would mean (assuming, crudely, a $9 wholesale price and $3 per disc to the band) the band sells only perhaps a million CDs a year, total, around the world, which is less than I would have guessed. (I’d be happy to hear if any of those assumptions are significantly off.)

And, finally, Live Nation didn’t poach Madonna from Warner Brothers. Given her declining sales and the fact that no one yet knows if these 360 deals make financial sense, it may be just as accurate to say the company took her off Warner’s hands.

As for the Wired story, it says, “the Rolling Stones are the kings of the touring industry, with some tours grossing nearly three quarters of a billion dollars.” Only the Stones’ most recent tour, by far its biggest, grossed something over $500 million, over some three years.

It also says:

Live Nation,for its part, has already become a major force to be reckoned with. Its focus on all-encompassing, 360 degree deals means it only stands to benefit as touring threatens to unseat recording as the largest sector of the music business.

This breathless reportage is inappropriate. Live Nation, formerly Clear Channel, controls most of the U.S. concert business and has been “a force to be reckoned with” for more than a decade. It already makes a lot of money from acts like Madonna, the Stones and U2. The question, which again will only be answered as the music business continues to shake out, is whether there’s enough extra leverage to be squeezed out of the deals (i.e., some new creative ways to gouge some extra bucks out of sheeplike music fans) to make the high initial outlays worthwhile.

Since those artists make the vast part of their income from touring—and have been doing so for many decades in every case—they are not lambs coming to the benevolent concert industry for a piece of the action. Mick Jagger knows how much any Stones show will generate in ticket and mersh sales, and begins the negotiations assuming it’s all his.

The tensions this chancy strategy has evinced spilled over into the pages of the Wall Street Journal ($) last week:

Having laid out so much cash—an estimated $120 million for Madonna and $150 million for Jay-Z alone—Live Nation Chief Executive Michael Rapino has sought to slow the pace of deal making so he can ascertain that deals already struck are working before entering new ones. But the company’s chairman, concert promoter Michael Cohl, wants to quickly strike deals with as many as 15 more artists.

According to people familiar with the matter, the dispute in recent weeks boiled over into a full-blown feud, with Mr. Cohl threatening to leave Beverly Hills, Calif.-based Live Nation.

All of these characters, by the way, deserve each other. Madonna and the Stones are artistically moribund, and U2 and Jay-Z are merely superior practitioners of the art of not looking that way. If Live Nation succeeds in harvesting even more big live acts for its stable, it truly will remake the industry; the company will be able to plan tours out years in advance, carefully doling out superstar roadshows to maximize box office, reduce scheduling conflicts, and avoid clustering too many big name acts on the road at any one time.

It will be accomplished by the simple expedient of taking actual artistic creation out of the equation altogether.

I find the financial condition of artists endlessly fascinating. From a small item in the WSJ ($):

The longtime ski retreat of singer-songwriter Dan Fogelberg, after three years on and off the market, is in contract.

Mr. Fogelberg, who died in December at age 56 after a prolonged bout with prostate cancer, first listed the 610-acre ranch in 2005 for $17.5 million. Its most recent asking price was $15 million. The planned purchase price couldn’t be learned. Mr. Fogelberg, who rose to fame during the 1970s, custom-built the estate, in Pagosa Springs, Colo., near the Wolf Creek Ski area.

Emphasis added. Fogelberg wasn’t a minor, star, really; he had a half-dozen platinum albums in the 1970s and 1980s. I’m sure he had a long second career as a perennial on soft-rock radio, and having been college roommates with supermanager Irving Azoff couldn’t have hurt his income. Still, the fact that a second-tier star like him had a second or third house worth that sort of money point out the sort of comfort even a temporary celebrity can afford.

See also: The Kravitz Perplex.

A couple of years ago I noticed Lenny Kravitz turning up a lot in stories about… real estate, like this one about a Manhattan townhouse once owned by Doris Duke, on sale for $50 million:

Lenny Kravitz, the rock star and budding designer, has visited the house twice, said Mamdouh Nasr, the owner of an ice cream truck that has parked for 28 years on the corner of 82nd Street and Fifth Avenue, just steps from the mansion’s front door.

To Mr. Nasr, it’s clear evidence that the musician, who enjoys buying and fixing up real estate, is buying the home. “To this guy time is money,” Mr. Nasr said. “So why he comes inside two times?”

He was also in another Times story, in the Style section, about a $38 million piece of real estate in Miami. Neither story remarked upon it, but I wondered, Where does Lenny Kravitz come up with that sort of money?

In the new Billboard, there’s a cover story about how Kravitz and Virgin are trying to repair a supposedly frayed relationship. Why that relationship frayed is skirted in the story, but it can be plainly seen in an accompanying chart, which details how Kravitz’s album sales, which topped out at 3M for “5″ and then 4.5M for a greatest hits set, have been in the toilet since then.

The answer, of course, is touring. Kravitz has had a respectable sales career; he’s plainly in that top 5 percent of artists who have actually made serious money from CD sales. But you could take all his sales royalties and put them in a box and they would be barely enough to make a down payment on a couple of homes like that. I see that Kravitz is a designer now, and has been flipping real estate for some time, so he’s obviously made some money doing that. But as the record industry continues to complain about file-sharing, this is a good example of where the real money is.

Artists like Kravitz, and coevals like Bon Jovi, are in their way footnotes to the 90s music scene. They each sold a lot of records, but they were never critical favorites and left little in the way of an artistic footprint. But as their fans grew older their incomes grew bigger as well, and today it is not unusual for artists whose time had seemingly come and gone to make tens of millions of dollars in just a few months on the road.

While acts like Pink Floyd and the Rolling Stones have long been record-setters when it comes to tour income, in the last decade or two many others have been getting into the mix. The Eagles pioneered this phenomenon in the early 1990s, when the band’s long-awaited first reunion tour boasted a then-groundbreaking $120 a ticket. As ticket prices have increased, tour grosses have gone up too. An average ticket price of $100 leveraged against a mid-sized basketball arena can suddenly produce multi-million-dollar nightly grosses—and that’s before additional sales from merchandise.

On the top level—marquee acts like Simon and Garfunkel and of course the Stones—breathtaking amounts of money can be had. Case in point: The Stones’ two-night stand at that baseball park in downtown San Francisco (the one whose name keeps changing to one or another phone company): 44,000 fans a night paid an average of more than $250 each to see the band, producing a heady $11.2 million gross for the shows.

But, again, here’s the much lesser Bon Jovi at the new Prudential Center in Newark—ten shows with an average $1.6 million a night. For them, and other nostalgia acts on the road like Van Halen, the magic $100-a-seat number produces one- and two-million-dollar paydays, night after night after night.