The TimesTurning 50 and divorcing Guy Ritchie doesn’t seem to have dented Madonna’s fortune — or her bankability. Robert Sandall investigates the business of being a material girl
She flagged herself in her 1985 hit as a material girl, and what a prophetic hook that turned out to be. After last year’s box-office receipts had all been added up, it was revealed that the highest-earning pop star on the planet in 2008 was, yet again, Madonna. She grossed more than £185m, nearly all of it on her Sticky & Sweet world tour — more than twice what Coldplay, the hottest rock band on the road at the time, made from theirs.
This remarkable result went almost unnoticed outside the entertainment trade press. We seem to have got used to the phenomenon that is Madonna Ciccone, now a 50-year-old mother of three who, defying all pop’s laws of obsolescence, is still at the top of the greasy pole after 26 years in the game. We don’t seem to mind paying the eye-watering prices that she charges to watch her perform these days either. The average price of tickets for the next leg of her Sticky & Sweet tour, which kicks off in London’s O2 arena in July, now on sale with Seatwave, is around the £200 mark, and some can fetch up to £500.
If the second leg of Sticky & Sweet repeats the success of the first, it will overtake the Rolling Stones’s Bigger Bang outings to become the biggest-earning concert tour ever.
Anyone hoping to have a word with Madonna about her ticketing policy meets a wall of silence. Not talking money in public is one of the few taboos this canny iconoclast respects. There’s an incident in the fly-on-the-wall documentary movie In Bed with Madonna that memorably makes the point. It’s when the director Alek Keshishian — who’s previously filmed Madonna everywhere bar the bathroom, and called the experience “like being in psychoanalysis and letting the whole world watch” — tries to follow her into the trailer where she is about to have a meeting. “Get out, this is business,” she snaps, and shuts the door in Keshishian’s face.
The viewer is left marvelling at Madonna’s priorities. Here is a woman who, elsewhere in the movie, rolls around on her mother’s grave, fellates a water bottle for the amusement of various gay members of her entourage, strips on stage and generally affects an air of devil-may-care candour — then balks at allowing a micro-glimpse of a business meeting.
There have been a lot of such meetings in these past 26 years. In the manner of a successful corporate brand, Madonna has spread herself far and wide. Aside from her creative output — the 14 albums, eight world tours, 19 feature films, myriad videos and the recent series of children’s books, The English Roses — Madonna has been an indefatigable dealmaker.
In 1992 she set up Maverick, a record label with video, film and publishing interests, which she jointly owned with Time Warner until 2004.
Since 1989, when she accepted $5m from Pepsi for a TV commercial (which got pulled after one showing for its presumed blasphemy), she has been involved in ad campaigns for BMW, Max Factor, Versace and Gap. Last year she put her name to a clothing line for the high-street retailer H&M; this year she’s collaborated with Ed Hardy on a tattoo-inspired range for Christian Audigier.
Then there are the merchandising deals, investments in fine art and property, appearance fees and other income accrued as a result of her being the most famous woman on the planet. Exactly how rich she is is uncertain: valuations of Madonna’s current worth start at the figure quoted in The Sunday Times Rich List 2008 edition , £300m, and go up from there.
A rare glimpse into the idiosyncratic workings of her business mind came during the settlement of her divorce last year from her husband of eight years, the British film director Guy Ritchie. Before the agreement was finalised, Ritchie said “it was never, ever about money”. To seasoned Madge watchers this sounded perfectly scripted — by her — and deeply implausible. “Guy isn’t quite the gentleman,” said one. “You don’t get money from Madonna unless you ask for it,” said another. “And he asked for it.” She herself had been heard in the past year moaning about how Guy never spent his own money. She was said to be peeved at having had to stump up £2.5m to buy Guy’s favourite pub, The Punchbowl, near the family’s West-End home.
Generosity to relatives is not her thing. This was one of the prevailing themes of Life with My Sister Madonna, an unauthorised memoir published last year by her younger brother, Christopher Ciccone. When he came to write it, Madonna and he were scarcely speaking. Originally one of her backing dancers, Christopher went on to become her interior designer and latterly the art director of her live shows. He got the heave-ho in 2003 while overseeing the refurbishment of her $12m home on Sunset Boulevard. She was furious that he had, as she saw it, overcharged her for a light fixture; in his view, he had merely applied the standard mark-up that designers add to materials they source and supply. Events surrounding her divorce suggested that, five years later, Madonna was taking a similarly tough line with her ex.
On December 15, 2008, Madonna’s publicist, Liz Rosenberg — one of the most trusted members of her inner circle, and the only one who has been with her since the beginning — told a news agency that Ritchie would be receiving between £46m and £60m. Later the same day, in a statement Rosenberg issued to the BBC, that figure had mysteriously come down to around £35m. Then, on December 17, Madonna and Ritchie released a final statement recanting all previous reports — “specifically in relation to the sums of money involved” — and insisting that “the financial details of the settlement will remain private, save to say that both of us are happy with our agreement”.
The implication that Rosenberg had been speaking out of turn was left hanging, but it made little sense. Nobody on Madonna’s payroll moves without her say-so. That this fiercely loyal retainer would mouth off on such a delicate matter without prior authorisation seemed highly unlikely. It was Rosenberg who had steadfastly denied all rumours of a divorce right up until the announcement that the Ritchies’ marriage was over. Now she was taking the rap for something that had Madonna’s lipstick traces all over it.
To those who know her well, Madonna was succumbing to a habitual anxiety.
A paranoid conviction that everybody is looking to take financial advantage of her is the dark side of her pin-sharp business instincts. According to brother Christopher, “her concept of being ripped off is checking a balance sheet and freaking out because one of her employees is receiving a high salary, even though she originally greenlighted it”.
Sources close to the divorce negotiation suggest that Madonna was initially stung by media reports that she was playing the big meanie, and that poor Guy would walk away with nothing. Then, after releasing some figures, she was even more troubled at being hailed as the author of the biggest pay-off in British divorce history. Hence the strange case of Guy Ritchie’s shrinking settlement.
The value of what Ritchie finally got, sources suggest, was set at between £25m and £35m, comprising the couple’s 1,200-acre Wiltshire pile, Ashcombe House, and £13m in cash. Even if this whisper is incorrect and the agreement paid him twice that amount, as per the initial news-agency report, there is no mistaking who got the better of the deal. Leaving aside Guy’s personal contribution to the Ritchies’ estate, under British law he was entitled to half of his ex-wife’s earnings during their eight-year marriage.
Since she is estimated to have banked £70m from the Sticky & Sweet tour alone, and a further £10m in 2008 from album sales, Guy Ritchie probably settled for way less than his legal due; and, it is said, he wasn’t happy about it. “There are some myths about this so-called amicable divorce,” one of Madonna’s oldest associates commented. “It wasn’t all that sweet and clear-cut and dried.” The suggestion is not that Madonna persuaded Guy to accept less money in exchange for more access to their sons Rocco, 8, and the adopted David, 3. Just that she applies her skills as a steely negotiator to all areas of her life. “Madonna isn’t a cheapskate, but she’s very practical and pragmatic. She always gets the best bang for her bucks.”
Madonna loves to talk up her work — which she sometimes calls her art — but being famous, successful and rich have always been her primary objectives. As a child growing up in the Detroit suburb of Rochester Hills, she was a fiercely competitive Monopoly player, with one clearly stated ambition. If she didn’t get to acquire Park Place — the equivalent of Mayfair, the most expensive property on the US board — she’d stomp her feet and protest: “But it’s mine!”
Her adolescent commitment to experimental modern dance wilted soon after she moved to New York in 1978 and discovered that the money and attention lay in fashionable discos such as Studio 54. When her brother Christopher, who had also studied serious dance, joined her there in the early 1980s, she was making $1,000 a night for 25-minute “track dates”, jigging about, miming vocals on club stages.
At the time, Christopher said, he “wished she were still a modern dancer”, although he supported her decision. Pop music, Madonna revealed to me in an interview in 1992, was never her passion. While she didn’t quite do a Gerald Ratner and dismiss her records as “crap”, she talked carelessly about them. Her focus was on being seen as a cultural big hitter — in line with her presentation of herself as the saviour of the sanity of the world in In Bed with Madonna.
“My musical career was an accident,” she declared. “I got a record deal and just veered off that way.” This is not how it seemed to the music-biz power brokers Madonna vigorously courted to get onto the first rung of the fame ladder. Seymour Stein, who met and signed her to his Sire label while he was in hospital recovering from heart surgery, was instantly smitten. “She’s very smart and she trusts her instincts,” he later commented. “She’s a great businesswoman.”
In 1983 Stein recommended her to Freddy DeMann, Michael Jackson’s manager. Despite the fact that Madonna was still a virtual unknown while Jackson was then at his zenith — on the way to selling 40m copies of Thriller — DeMann took her on. Her backing-dancer brother, Christopher, remembered how DeMann instantly became “one of the most important people in her life”.
Another key man in her early career, her business manager and accountant Bert Padell, was immediately struck by the beady eye she kept permanently trained on the bottom line. “She is exactly the same way now as she was when she first came into my office without a nickel,” Padell recalled. “It doesn’t matter if it’s a dollar or $10,000, she wants to know about it. We had to fax her a copy of every cheque we wrote, on a daily basis. She would then call us and say that it was okay before we could send it out.” Padell and his firm were eventually fired and sued for $1.5m by Madonna over a tax bill she considered to be too high.
Once her pop career took off, Madonna was quick to convert her celebrity into cash, firstly by demanding $10,000, up front, for her attendance at fashion shows. After she learnt about the $5m the photographer Steven Meisel earned from syndicating some pictures he had taken of her, she insisted on retaining the rights to all future studio shoots — a pioneering move that has been copied since by stars such as Tom Cruise.
Her next big idea was to broaden her recognition via movies such as the screwball comedy Desperately Seeking Susan. Not since Elvis in the early 1960s has a pop star romanced Hollywood so assiduously in the face of mostly indifferent reviews. “Madonna can only play herself,” is a common refrain — but that hasn’t prevented her from earning millions for her film roles. The exception was her part as Breathless Mahoney in the 1990 remake of Dick Tracy. So keen was she to work with her old heartthrob, the film’s director, Warren Beatty, she accepted union-scale rates — less than $30,000.
Madonna soon learnt how to maximise her returns as a recording artist. Her early hits, Holiday, Like a Virgin and Papa Don’t Preach, had been written by professional songwriters, who pocketed a quarter of the monies earned. Since 1986, and despite her limited musical ability, Madonna’s has always been the first name to appear on her song credits.
Her co-writers, meanwhile, have often been talented unknowns, like Pat Leonard, with whom she composed and performed her most successful album, the 24m-seller from 1986, True Blue. As soon as their names have benefited from the connection with her hits — and their asking price has consequently risen — she drops them and hires somebody new, and usually cheaper.
Nor are these fleeting but crucial collaborators allowed near the limelight. In 1993 Pat Leonard, whose credits include Live to Tell, La Isla Bonita and Like a Prayer, told me how angry he used to get “when Madonna would say in an interview ‘music isn’t a concern of mine’. Because I would think, ‘Well it’s a concern of somebody’s, bitch, otherwise you wouldn’t be sitting there.’ Most of the time she’s just playing a game”.
And doesn’t she know it. “Part of the reason I’m successful is because I’m a good businesswoman,” she once said. “But I don’t think it’s necessary for people to know that.” This conspiracy of silence was confirmed in 1992 after Madonna published her soft-porn photo opus Sex. Some senior professors at Harvard Business School approached her to talk to their students and faculty about how she had made Sex sell, shifting 1,5m copies of a £50 coffee-table book in days — a record in the publishing world. Madonna turned the invitation down.
At the time she was preoccupied with setting up Maverick. Such vanity projects were all the rage with the superstars of the 1990s and most of them turned into expensive failures, like Prince’s Paisley Park. Maverick, by contrast, was for a while a great success, yielding one of the biggest-selling albums of the 1990s in America — Alanis Morissette’s Jagged Little Pill. The exec who signed Morissette, Guy Oseary, so impressed Maverick’s owner that she decided to take him on as her manager, in place of Freddy DeMann.
For her, the new arrangement had several advantages: Oseary was in his early twenties and thus in touch with Madonna’s core demographic, the young pop audience. He was also cheaper, less visible and more malleable than an old-school heavyweight like DeMann.
As Maverick’s fortunes waned in the early 21st century — battered like most record labels in the losing battle against online piracy — Madonna conceived a bold exit strategy. She sued Maverick’s distribution company and minority shareholder, Warners, for breach of contract and improper accounting, and demanded $200m in damages. This move led to Warners buying her out to avoid the bad publicity of a protracted lawsuit — and prompted more admiration among the business community. In 2004, Professor Colin Barrow of the Cranfield School of Management singled her out for praise. Madonna, he said, was “America’s smartest businesswoman… who has moved to the top of her industry and stayed there by constantly reinventing herself”. He held up her “planning, personal discipline and constant attention to detail” as models for all aspiring entrepreneurs. He could have also cited her ruthless refusal to allow personal loyalties to interfere with business, and her conversion of herself into Brand Madonna. Sir Tim Rice, co-creator of the musical Evita, which spawned her most successful film role as Eva Peron, found these qualities less admirable: “Sometimes it was as if you were dealing with General Motors.”
Her obsession with a tightly packed schedule would certainly not seem out of place in a corporate boardroom. Her brother Christopher has described Madonna’s typical day: “Up at 9, in bed at 11 with every hour in between planned as rigidly as any military campaign.” While she isn’t renowned for self-mockery, Madonna the martinet can occasionally see the funny side of her mania for timetabling. “I’ll give you 60,” she once told Bert Padell during an early morning phone conversation. As he began to explain the intricacies of a financial issue, the receiver went dead. When he phoned her back, Madonna was giggling. “See? I told you 60 seconds. My time is valuable.”
Her finest hour as a dealmaker came in 2007 when she signed a $120m, 10-year contract with Live Nation, the world’s largest concert-promotion company. This so-called “360- degree” deal placed the exploitation of all of her music-related activities, from touring to recording, under one roof. Her decision to sign with a concert promoter showed her, again, to be ahead of the game. Her experience with Maverick had taught her that, in the 21st century, albums are best seen as a tool to sell concert tickets rather than money-earners in their own right. “The business paradigm has shifted,” she said upon signing. “As a creative artist and a businesswoman I have to acknowledge that.”
Madonna has, as usual, got the better of the deal. Aside from some generous stock options she cashed in last year, she will have pocketed the premium Live Nation paid for a “360-degree” monopoly that, two years on, they no longer want. Dismayed at the near-impossibility of turning a profit from record sales, Live Nation have been talking in private about licensing Madonna’s next studio album back to her old record company, Warners. In contrast to her public image, the material girl has been a cautious investor. In his 2001 biography, Andrew Morton revealed that Madonna had avoided the stock market in favour of low-interest-bearing government bonds — a piggy bank for grown-ups, basically. She blanked new technology to the point that she had to sue for the rights to her internet-domain name, Madonna.com.
More recently she has preferred old-fashioned bricks and mortar. In America she has two homes: the New York apartment on Central Park West that she has owned since 1987 and that has since expanded to take in five surrounding apartments; and a 16,500-square-foot Mediterranean-style villa in Hollywood. After her marriage to Ritchie in 2001, she sank around £40m into the British property market. She currently owns six houses in central London, and the Mayfair pub. Losing Ashcombe House, the Wiltshire mansion she bought for £9m in 2001, which she handed to Guy after their divorce, was no great hardship, say those who know her. “She hated the noise of the aircraft overhead,” says one, who remembers Madonna trying to buy the adjoining Compton Abbas airfield with a view to closing it down.
Buying paintings she used to call her “sin”, but her collection of modern art has proved to be a shrewd investment. Since 1987, when she paid $1m for Léger’s Les Deux Bicyclettes, she has acquired around 300 pictures, including one by Picasso and two by Frida Kahlo. Christopher estimated that by 2008 his sister’s collection’s value had increased by 600%.
Out of all this, two things are certain — Madonna has been watching recent valuations of her assets like a hawk; and she will never talk about the subject outside her business meetings. The only figures she is happy to make public are the sums she gives to charities such as the Kabbalah Centre in Los Angeles, where she is a regular attendee and to which she donated £2.8m in 2007 (on a tax-deductible basis). So keen is this hard-headed businesswoman to be personally renowned more for her mystical kabbalistic faith than her prodigious fortune that she has banished one of her most famous songs from her concert set list. That song is, of course, Material Girl.
Showtime spoils
Madonna’s 2008 Sticky & Sweet tour played to 2.35m fans in 58 cities and grossed $281.6m
Most of the tour’s gross takings came from ticket sales (around $200m), and one quarter, or $70m, from merchandising
The remaining $10m came from film and DVD rights, and the sponsors, Vodafone/Verizon
Though Madge is said to be a stingy employer, her shows never scrimp on the wow factor — which is why she can justify charging as much as $300 a ticket
Her production costs are also higher than average; she’s toured with a retinue of more than 250, including 12 beauticians, 36 clothes designers, 18 dancers and a chiropractor
After paying her manager, Guy Oseary, his percentage (with US acts that’s usually 20% of the gross receipts rather than profit) Madonna came out of Sticky & Sweet with about $105m
Her biggest assets
About one fifth of Madonna’s £300m fortune is in property. She now owns six houses in London, including ones in Marylebone and Belgravia
She also owns an 18th-century Mayfair pub, The Punchbowl, in Farm Street, which is near the £15m townhouse that was her main home while she was married to Guy Ritchie
Madge Central is now a huge apartment on New York’s West 57th Street. Her other home is a 16,500-sq-ft villa on Sunset Boulevard
Her art collection, over 300 paintings including work by Léger, Dali, Man Ray, Damien Hirst and Frida Kahlo (below), was valued at around £80m last year. She paid $5m for Picasso’s Buste de Femme à la Frange
Her other investments — amounting to about half her total worth — are said to be in government bonds. This has protected her from the recent stock-market crash. She owns no boats, private jets or other rock-star toys, apparently subscribing to the old showbiz saying: ‘If it flies, floats or f***s, rent don’t buy’
