Why Madonna Isn’t On The Forbes Billionaires List
(Michael Stewart, WireImage)
FORBES released its annual Billionaires issue earlier this month, and the list features plenty of new faces (Tory Burch, Renzo Rosso) alongside the usual suspects (Bill Gates, Warren Buffett).
There are plenty of entertainment moguls on the list (David Geffen, Oprah Winfrey), but there aren’t any billionaires who’ve gained their wealth by working as a musician or actor. Not Diddy or Jay-Z, not Brad Pitt or Angelina Jolie—and not Madonna.
Yet earlier this week, the blogosphere exploded with declarations that the Material Girl had ascended to billionaire status. Most of the stories erroneously cited a WWD story as the source of this revelation (representatives from the publication confirm that no such piece exists), probably because of a New York Post item that initially linked to WWD before shifting its attribution to another site.
There’s a reason Madonna isn’t on our Billionaires list: simply put, she’s not a billionaire.
We estimated the singer’s net worth at $325 million six years ago. Since then, our wealth team has chronicled the scads of cash she’s earned via our Celeb 100 list, and while she’s earned a ton of money, the numbers don’t add up to anything near $1 billion. She earned $72 million in 2007, $40 million in 2008, $110 million in 2009 and $58 million in 2010. With no touring or new albums in 2011, she didn’t earn enough to make our list that year, then pulled in another $30 million through the first half of 2012.
Add it all up (plus whatever she earned in 2011–let’s call it $10 million) and you get $320 million. Lop off 35% for federal income taxes ($112 million), another 10% for state and local taxes ($32 million) and 20% for management, legal and agency fees ($64 million). That leaves $112 million before figuring in any expenses for housing, staff, travel or luxury goods.
What about that big concert tour? Most of the recent reports have mentioned Madonna’s past 12 months as the reason for her ascent into the financial pantheon, citing sales of her MDNA album and a world tour that grossed just over $300 million. They mention perfume sales of $60 million, tour merchandise sales of $75 million, and other branding deals that add up to $30 million.
But the difference between gross ticket sales, gross earnings and net earnings is ignored. Artists typically take home about one-third of gross ticket sales on the road–in Madonna’s case, that means $300 million becomes $100 million.
To gross $75 million in merchandise sales, she would have had to average sales of $34 per head on her tour (or about $10 more than Justin Bieber). And that’s just the gross number. For most artists, we project net earnings of $5 per head for merch; Bieber’s take tops the charts at about $10, according to his touring team. Let’s give Madonna the benefit of the doubt and say that she also nets $10 per head–over the course of a tour that drew 2.2 million fans, that would have added up to $22 million in take-home pay.
Madonna’s record deal guarantees her a base advance of $1 million per album, but MDNA hasn’t likely earned much more than that. It’s been certified gold in the U.S. for sales of over 500,000, and it seems likely the album has sold at least as many copies abroad. Still, that’s only a little more than a million copies sold, resulting in just a few million dollars in her coffers–about the same amount that most A-list entertainers net from perfume deals, regardless of heady gross sales.