Madonna Louise Veronica Ciccone, d.b.a. Madonna, is one shrewd businesswoman. Taking a leaf from the Detroit of old, she restyles herself almost every year. That keeps the fans happy and has earned her at least $125 million over the past five years.
SHE HAS JUST FINISHED a rigorous song and dance routine in Nice, France. Madonna Ciccone, the 32-year-old bleached-blonde pop star, walks across the stage and pretends to rough up her background vocalists. Clad in an ivory-colored bustier and trousers from a business suit, Madonna then looks out at the crowd of 35,000 fans, grabs her crotch, raises her fist and yells, “I’m the boss around here.” The crowd roars.
This routine was repeated at almost every Madonna performance this summer, but it’s more than play-acting. She is the boss. She is the president and sole owner of a multi-million-dollar corporate organization that in peak season has hundreds of employees and operates through nearly half a dozen entities, including Boy Toy Inc., Siren Films and Slutco.
Congratulations, Madonna. The critics may attack you, but you are one heck of a moneymaker. The nation’s top-earning female entertainer for 1990, Madonna brought in an estimated $39 million in pretax earnings. She has staying power, too. While performers like Whitney Houston and Cyndi Lauper rise fast and fade fast, Madonna has stayed near the top for all five years FORBES has compiled its list of America’s highest-earning entertainers. Since 1986 Madonna has earned at least $125 million.
For Time Warner, the giant entertainment firm, Madonna has meant more than a half-billion dollars in record sales. then there are concerts, videos, motion pictures and other merchandise, which added hundreds of millions more for other companies.
People who work with Madonna agree that she is a rarity among entertainers: a star who runs her own business affairs. “She has a very strong hand in dealmaking and financing of her enterprises. Nothing gets done without her participation,” says Jeffrey Katzenberg, the chairman of Disney Studios, who dealt with her during the production of Dick Tracy. He adds that she uses her lawyers and accountants and advisers “as aides in making her own judgment, as opposed to having them run her life.”
Yet if there is one thing that drives Madonna up the wall, it’s being described in print or on the tube as a calculating businesswoman. That’s not the image she sells. She refused to talk to FORBES for this article, and apparently instructed her entire organization to clam up. Managers, accountants, investment advisers, dancers, hairdressers and makeup artists all refused to speak for the record.
A close business associate of Madonna’s made the mistake of speaking to FORBES about the performer without getting her permission. The next day he called back pleading with us not to quote him by name. “I could get into a lot of trouble. I have a family.” He sounded panicky.
Actually the associate had given away no secrets. He had been highly complimentary. He merely confirmed that she was very “business-oriented” and had “an excellent sense of sell.” Is that a sin? No, but Madonna wants rigid control of her own publicity, and being a shrewd businesswoman might be incompatible with the naughty image she has so carefully crafted.
Born on Aug. 16, 1958 in Bay City, Mich., she’s a natural brunette with alabaster skin and blue eyes, one of eight children in a strict middle-class Roman Catholic family. In high school she got mostly A’s. But even then she enjoyed standing out from crowd: As a high school cheerleader she refused to shave her armpits.
This tendency to show off has taken her far. She first came to fame in late 1983 with her premier album, Madonna, which sold nearly 9 million copies. Her look was trampy and punk: She was clad in skimpy black clothes, her navel was exposed and her dyed-blonde hair showed obvious dark roots. Her music was for dancing and her vocal sound was girlish. Her songs were upbeat and oozed sex. She wore lots of bracelets and large crucifix earrings.
By the time her second album, Like a Virgin, hit the stores in 1984, she had switched to a silk wedding dress with a belt buckle that read “Boy Toy.” She also wore her underwear as outerwear, starting a fashion craze. In a video for the song “Material Girl” on that album, Madonna dressed up as Marilyn Monroe and spoofed Monroe’s infamous “Diamonds are a Girl’s Best Friend” number from the movie Gentlemen Prefer Blondes. The album sold 11 million copies.
By 1986 Madonna had completely shed the trampy sex kitten look and sound for a more old-fashioned and feminine appearance. She began singing in a deeper, more serious voice, and in a video from her third album wore honey-blonde hair and a demure flowered dress. In July 1987 she got herself on the cover of Cosmopolitan as a glamorous blonde, and in May 1988 she graced the cover of Harper’s Bazaar as a prim brunette. Her True Blue album of that period sold nearly 17 million copies, and she sold more albums among the over-20 crowd than ever.
Last year it was time for another model changeover. The cover on Madonna’s 1989 album, Like a Prayer, featured her looking like a cross between a gypsy and a hippie. The album sold 11 million copies.
Madonna went for a complete makeover in 1990: a futuristic look, her blonde hair tried back severely, a modern microphone unit strapped to her head, and her body adorned with bustiers that look more like armor than underwear.
“Where Detroit seems to have a difficult time retooling and turning out a new product line every couple of years to stimulate its customers, Madonna does not,” says an entertainment executive who know her well. “She comes out with new lines with all sorts of new gizmos, options and flashing lights.”
She knows, too, the value of controversy: If you make the older generation disapproving enough, the younger generation will pay attention to you. Hence Madonna makes a business of pressing America’s moral hot buttons. She has written songs about Catholicism, censorship and teenage pregnancy.
Her late 1980s breakup with tough-guy actor Sean Penn got almost as much publicity as her marriage to him in August 1985. Later, on TV, she hinted at a lesbian love affair with comedian Sandra Bernhard, but then said she was kidding. On another TV appearance she discussed the sexual pleasure of being spanked.
Madonna’s much reported affair with Dick Tracy costar Warren Beatty hasn’t hurt Dick Tracy’s box office revenues, which surpassed $100 million this summer. Playing the media like a musical instrument, Madonna garnered herself more ink by agreeing to do the movie role of Breathless Mahoney for union scale ($1,440 per week) — she was that anxious to get the part. The tabloids didn’t report that she also negotiated a percentage of gross box office revenues from the film, video and merchandise sales that will probably put $5 million in her pocketbook. On top of that, she will most likely make $14 million from the Dick Tracy soundtrack, which she released as her own album through Time Warner.
Target marketing? Since Madonna’s market includes a substantial number of Hispanic and black teenagers, she sings verses of her songs in Spanish and made a video about racial discrimination.
Judging by accounts of her past, Madonna appears to be skilled at meeting and cultivating people who can advance her career. When she first arrived, almost penniless, in New York City in late 1978 she was a dancer, having trained at, but not graduated from, the University of Michigan. According to those who knew Madonna, she soon realized that there was no money in dancing and that success was easier to achieve in pop music. Before long Madonna became romantically involved with a struggling rock musician who taught her to play guitar and drums.
Her next major friendship was with one of New York City’s best-connected dance-club disc jockeys, John (Jellybean) Benitez. Benitez got her gigs at Manhattan clubs and helped produce her first album.
In 1985, already a star, she married actor Sean Penn. He introduced her to Warren Beatty, who got her the role in Disney’s Dick Tracy. Now Madonna is working with Disney on the movie version of Evita.
Madonna is a workaholic. In both her Hollywood Hills home and her Manhattan apartment, she has offices equipped with facsimile machines and multiline telephones. She spends several hours each day making business calls. She has been quoted as saying she sets time aside each day for creativity, which she says she can turn on and off a at will. Since her physical appearance is crucial to marketing, she has a personal trainer and spends three hours each morning working out.
“What she lacks in formal business education, she more than makes up for with street smarts,” says Harry Scolinos, a Los Angeles lawyer who gained insight into Madonna’s finances two years ago when one of his clients sued Madonna and then-husband Sean Penn on assault charges. “I would take her street-smart business sense over someone with a Harvard M.B.A. any day.”
One key to the durability of Madonna’s popularity is her reluctance to be seen as a corporate shill. Unlike Bill Cosby, Paula Abdul and Michael Jackson, who eagerly hawk products, Madonna refuses to do so. Out of principle? Possibly. More likely she fears it might sully her image as an artist.
The only endorsement Madonna has ever done in the U.S. was for Pepsi in a short-lived deal last year. It was a disaster for Pepsi, but a complete success for Madonna. For $5 million Madonna was to do three commercials for Pepsi and allow Pepsi to sponsor her tour. The cola company spent millions producing the commercial and hyping its premiere, which was to coincide with the debut of Madonna’s new album, Like a Prayer. Never mind that Madonna refused to drink the soft drink in the commercial and is seen holding the can only twice; the commercial was to air in prime time and be seen by 250 million people in 40 countries.
Madonna got the money, but the commercial aired only once in the U.S. Almost immediately after it appeared, Madonna released a video from the new album, showing her kissing a black saint and dancing provocatively in front of burning crosses.
The fans loved it, but thousands of people found it blasphemous. Bottlers lit up the phone lines to Pepsi headquarters. Pepsi canceled the commercial and severed its relationship with Madonna, but paid up. Not only did Madonna pocket the $5 million, but she garnered a few million more in free publicity. As for the people she offended, well, they don’t buy pop records anyhow.
Did Madonna deliberately undermine Pepsi’s effort? It’s hard to say. Roger Mosconi, then senior creative director at BBDO Worldwide advertising agency, worked closely with Madonna filming the commercial. He recalls: “One day Madonna, who liked to joke with me, came up to me and said, ‘Hey Roger, are you going to have the burning cross reflecting in the Pepsi can?’ And I said what burning cross? And she smile and said, ‘You’ll see.'”
Shoemaker Nike, too, ran into trouble with Madonna. Last October Nike began negotiations with Madonna to endorse a new dance shoe. The proffered fee: $4.24 million. The negotiations ended in March, officially because of “scheduling problems.” But people directly involved say that during the negotiations, some of which took place in Madonna’s Los Angeles home, it became increasingly clear that Madonna wanted to keep her endorsement to an absolute minimum. Says one Nike source, “She wouldn’t put them on her feet.”
When Nike balked, Madonna then bombarded Nike Chairman Philip Knight with telephone calls in an effort to revive the deal. When that failed, her lawyers called and threatened to sue Nike for the $ 4.25 million fee, even though no commercial was ever produced. Another deal fell through with Reebok in July.
Like any smart executive, Madonna surrounds herself with capable subordinates. She pays a personal manager up to 10% of her income, her business manager another 5% and her lawyers around 5%, all probably capped at $1 million. And her advisers are top names: Freddy DeMann, her personal manager, handled Michael Jackson during his lucrative Thriller days. Her lawyer, Paul Schindler, of New York’s Grubman, Indursky & Schindler, is considered one of the best in the business. Business manager Bert Padell is known for his solid-gold client base, despite past problems with fraudulent tax shelters.
Besides these advisers, there are dozens of full-time workers when Madonna is touring, plus a tour agent who gets 10% of concert revenues. So even if the tour is a sellout, she may lose money.
Madonna knows there is an easier way for a performer to make big money. It’s called the movies. Madonna is moving into the movie business in a big way. When she’s working on pictures, the studios pick up most of the cost and risk. Movie actors and actresses have fewer people to pay and there is less of a need to come up on your own with a fresh product. In a single movie a performer can make more money than in a year of hard work at concerts. And movies sell just as many record albums as concerts do.
Several of Madonna’s movie efforts have been out-and-out disasters. Her sole Broadway performance, in David Mamet’s Speed-the-Plow, got mixed reviews from the critics. Never mind. Madonna still has the potential to be a major box-office draw. Time Warner’s HBO unit reportedly paid $1 million for the rights to broadcast the final concert of her 1990 Blonde Ambition tour. Aired in early August, the concert was HBO’s most-watched non-sports event ever.
Why wear yourself out in a sting off one-night stands when you can make millions for a single performance? And with the movies you don’t need a model changeover every year.