The Business and Salesmanship of Metallica

Speaker: Andy Olen:

Hello, and welcome to the Sales Warrior Within podcast. My name is Andy Olen. Thank you so much, Sales Warriors, for joining and listening in today. If you haven’t already, it would be greatly appreciated, after you listen to this episode, to give a review. Wherever you consume your podcasts, if it’s Apple, if it’s Spotify, if it’s Google, if it’s off of my website, wherever you get those, please go out there. And if you can do a five star rating for it and write a note. On your thoughts comments good bad or indifferent I take all comments because I want this thing to be as good as possible But if you could give a review that would be greatly appreciated team I just read a couple of reviews of a weekend concert series that I was at this past weekend in Montreal With and I’m trying to get something out of my hair as I look at the recording as I have a fuzz in my hair there’s actually a What it is there are cutting some trees down at the house this morning as I was watching the wind was blowing all of the sawdust into Our towards me and it got all over my shirt, and I just pulled some out of my hair as well So thank you for enduring that with me so back to reviews I was at the Metallica M72 tour in Montreal this past weekend, and it was a no repeat weekend tour. So there was a show on Friday, 16, 17 songs, something like that. And then a show on Sunday as well.

And both set lists were absolutely unique. So there wasn’t one song that was repeated from Friday to Sunday, which were a diehard Metallica fan. And that was show number 16 on Friday, 17 on Sunday for me. And I’ve seen them all around the world. France. I’ve seen them in Italy, Canada, the United States, obviously. This is a band I really enjoy. And I got to tell you, looking at the reviews of the show in the Montreal Gazette, the reviews were fantastic. There were 60,000 people at the show. And quite frankly, these were two of the best shows that I’ve seen Metallica put on. There was something about. the stadium set up that many people. French Canadians love their music. They get excited, energized. It was a really diverse group of people, actually, many from Canada who came in, but also from the United States and elsewhere around the world. And it got me thinking a little bit after coming back from this experience. It’s like, all right, let’s talk about the business of Metallica.

And I think that they’re actually really, really good salespeople. And so I want to talk a little bit about their salesmanship. And then the business and maybe the economics of putting on a tour like this as well. Because I added it up and just did a bunch of estimates on how much money each band member made. And there are four in Metallica.

So there’s Lars, the drummer, James, the rhythm guitar lead vocalist, Robert, a trio, the bass player, and Kirk Hammett, the lead guitarist. So there are four in the band. I was trying to figure out like. How much money do they make after this and each show or this tour in 2023? And I built a little income statement. I call it the five line P&L. We can go through that here in a minute, but I wanted just to get a sense of like, hey, man, I enjoyed that so much. How much do they enjoy that economically? Because one thing that I’ve really recognized with Metallica is… And a lot of great artists are like this, too. I certainly see it in Taylor Swift, who my kids, especially my daughters, love and both saw her on the Eras Tour this year, which looks amazing. I would actually definitely go and check out that show. And maybe next year I have to do that just to see the spectacle of it all. And she’s uber talented. But these are great salespeople, too. They know how to manage their brand. They know how to communicate. They know how to perform, obviously. I’m thinking for like Metallica, I think three of the guys are in their early 60s and one is like 58. You know, that’s a lot of energy to get up and perform like that.

Now, when I tell you how much I think they’re making each per show, you’re gonna say, well, come on, if I’m making that much money, I’m gonna be up and ready to go. But it is physically taxing. It is energy taxing for sure. And while they’re up on stage, the salesmanship and the performance is just really cool and really connecting. So I wanted to walk through a couple aspects of just my observations as a salesperson watching the Metallica weekend unfold. So interestingly, and this is a really good business tip for those of you looking to build a business or supporting your customers business as well. Anyone that can sell something and get paid. like a year before they actually deliver the goods. That’s a really fun business to be in. Think about it. That if you’re a musician and your concerts start six months or 12 months from now, and you sell your tickets today, well you’re bringing in all of the top line, all of the revenue for that show, well in advance of ever having to put the show on.

And think about, I saw Rage Against the Machine finally. After multiple cancellations years of cancellation because of COVID. I paid for those tickets in 2019. Saw the show in 2022 and they got paid for that show in 2019. So they put that money in their pocket in 19. Sure. They had the expenses were all waiting. They had to put on the show. They had to do the performance, but they got their money upfront. For all of you out there thinking about businesses, thinking about your customer, the reason why they want long. Uh, payment terms from you, 45 days, 60, 90, 120 days. They want to wait to pay you. They want to hold on to their cash. Think about all of us who are buying concert tickets. We’re paying with our credit card immediately and the company, in this case, Metallica, is getting that money right away. So then they can make investments, they can deploy it, or they can put it in the bank and make interest on it too. So that’s a really good fundamental part of the business model of musicians. And those who put on events, you know, sports teams would be the same. You buy your tickets. I’m paying for my Milwaukee Bucks season tickets, um, one month at a time, but I’m already paying well into, I’m probably 66%, two thirds done paying for the 2023, 24 season already. So the Bucks have the money upfront. They just then have to put on the game and fulfill their obligation for what I’m paying for today.

The same with concerts. So really good business model. and really good to understand sort of the payment cycle and who owns or who has the cash and when do they have it. And if they get it up front, like Metallica does, they can put on the show later on, but they’re enjoying all of the benefit of having that cash in their hand at the time that I, the fan, purchase it. So let me go through a little bit of the weekend setup. So again, the shows here in Montreal were Friday, Sunday, excuse me, day off on Saturday. They probably moved all of their stuff. They were in New York before at MetLife Stadium, or where the Giants and the Jets play football. And they shipped all their stuff, all the set, the lighting, the stage, all the effects, everything. The crew moved from New York up to Montreal, probably started the unpacking and rigging of the Olympic Stadium in Montreal on Tuesday so they probably started paying rent on Monday or Tuesday of the week the shows obviously then later on Friday Sunday and During that week though. There were all kinds of different events in the city of Montreal so for example Metallica has blackened whiskey which I’ve never tried before but it’s their own private label whiskey or bourbon and What they do is that they sponsor you know tastings and showings of the whiskey at different restaurants in Montreal. There were billboards out for all of that. So they’re getting some branding out there. They’re getting hype. They’re getting potentially sales of people buying whiskey.

Well before the first kick drum, Lars’ kick drum, actually is played on Friday night at the show. They opened up a pop-up store, which is really a thoughtful idea for two reasons. One, they can start selling merchandise again in advance of the show. Two, for people like me, I’d rather stand in the merch line at the pop-up store on Friday afternoon and then take all my stuff back to, or stand at my wife’s mom’s house, take it back to her place, and then just choose what I’m gonna wear that night versus going to the stadium and standing in line at the stadium for merchandise. and buying, but this pop-up store was pushing through 500 people an hour. And we walked out of there, each of us got two t-shirts, you know, not high quality t-shirts, at $60 Canadian a t-shirt. So big investment. I don’t usually buy concert t-shirts, but because the pop-up was there, I definitely wanted to check it out and it was really cool because they were playing Metallica music in there as well. But all of that revenue generation is starting again before Metallica ever hits the stage. They do some press. They do some public things out there. They generate hype. People are probably buying their albums along the way and subscribing to their music stations on Spotify or on Apple Music. They’re getting the residual from that.

So again, this is this money-making machine that this huge brand and this entity You get to the show and all of a sudden you have some opening bands. So there’s some expenses there. Pantera opened Friday, along with a couple other supporting acts. Five Finger Death Punch on Sunday, who was really good by the way, opened as well. But I got to thinking, I’m like, alright, I know how much I paid for my seats, and I’m not ashamed as a huge Metallica fan. This is a life luxury of mine. Canadian dollars, the tickets were $375 per seat. So Mel and I went, so that was two seats. So $7.50 for us to go Friday, $7.50 Canadian for us to go Sunday, and then a bunch of fees on there. Just looked at the bill, it was like $1,700 Canadian to go to the show, which at about 74 cents to the dollar, probably looking at $1,200, $1,300. So I’m thinking to myself, Wow, that’s a lot of ticket revenue that’s coming in. How much would it be? And there are probably some cheaper seats. We had pretty decent seats. And then there are all these VIP packages as well that are thousands and thousands of dollars to meet the band, to get to a pre-party, all these different options. Didn’t do those things. But let’s say 60,000 seats when it was full, packed show, 375 a ticket for two shows.

That’s 18 million dollars 18 million dollars of ticket revenue let me just do the math again on this because I think that’s 18 million uh of total ticket no of ticket value 120 000 times 375 45 million dollars for the two shows canadian. Let’s get that into us dollars 33 million 300 divide that by two about 17 million dollars worth of ticket sale revenue, $17 million of ticket revenue, US dollars per show. That’s unbelievable. Then I’ve never seen like a higher percentage of people with concert and band t-shirts on than I did at this show. I would say 50% of the stadium had something that they bought at the pop-up or at the merch counters. I’m going to say on average, each person bought one t-shirt at 60 bucks Canadian. That is $1.8 million of merchandise sales. And then you get all this residual stuff. You can buy the CDs or the downloads from the show. You have all these other things. They probably got a cut of some of the concessions, things like that. I’ll say, hey, five bucks per person. That’s another $300,000. So what it comes out to basically by my math is that in Canadian dollars, about $38 million was made.

At the show that comes out to about 28 million dollars for the weekend So 28 million dollars of top-line revenue show tickets Merchandise and some other residuals. I’m probably missing a hundred things I don’t know all the details of what goes into the income statement for a concert, but let’s say 28.2 million dollars US dollars of revenue for two shows for the weekend Now you obviously got to spend some money to do that. There’s some costs that go along with this. I put down $4 million for the venue. Don’t know, that might be too low, might be too high. Four million bucks for the Olympic Stadium. The crew and all of their expenses, the labor, their housing, their food, their transportation, $4 million for that. Probably the semis that they had to rent. I have lights and rigging. and all the stage setup, which actually you can probably amateurize across an entire tour, but I have it at a million bucks each. Just band expenses, getting the Metallica guys around, moving them around, the catering, whatever else goes into all of their stuff, their personal assistance, million bucks for that, I estimate it. And then you gotta pay the other bands that were with ya. I say, hey, for the weekend, you know, $2 million to pay the other bands as well.

And then you gotta obviously pay the cost to make all the merchandise. So the t-shirts and all that kind of stuff obviously takes a few bucks to build, not again the highest quality, but let’s say a million bucks to manufacture and to build all of the merchandise that was ultimately sold. I come up to about 13 million US in cost to put on the two shows. 28.2 million in revenue. minus 13 million in cost. Let’s round it off. $15 million profit at the end of this weekend is what I came up with. That may be plus or minus 2 million on that. I don’t know, but it’s probably in the ballpark based on these estimates. 15 million, four members of Metallica, 3.75 million per member if it’s split evenly four ways. And by the way, they all perform and what they do on stage together, I hope it is evenly split. That comes out to, for the two shows, 1.875 million per member of Metallica per show. Let’s just round it up. 1.9 million for James, 1.9 for Lars, 1.9 for Robert, 1.9 for Kirk. And as a fan, boy, they earned every penny of that.

I have no issue with them getting paid $1.9 million each per show. because it is such a unique, fun, and enjoyable experience. It puts so many memories into my head and experience into my head. My wife loved it. And those memories pay dividends over time that I get to look back and say, that was an awesome, awesome show. So those are a little bit of the economics that I came up with for my Metallica weekend. Obviously for me to go was the price of the tickets. It was the price of the merchandise. It was some dinners and transportation, getting there back and forth on the metro. It was the flights there. So on top of the tickets, it’s also a big investment for all of us that go. We met some people from New York that we hung out with. They were driving up and back, staying at a hotel. We met other people that drove down from Ottawa that were sitting next to us. So there’s a lot of investment that goes in. And you think about how it’s been said that Taylor Swift has maybe been one of the biggest economic. Recovery engines in the US in terms of propelling forward the local economies where the eras to her goes I get it You know I think about how much we spent and what we did out in the city and enjoyed ourselves And then you have that times, you know 30,000 60,000 more people enjoying the city as well If you do that with Taylor and her being there for four or five shows In a certain city and just sort of all of the energy that goes around with also a ton of economic value as well So obviously you don’t get to that big of a level and earn 1.9, 2 million bucks per show per member unless you’re really good at what you do. And you’re also really good at marketing, selling, and connecting with your customers and reinventing yourself.

I mean, I think about it, it’s like, hey, let’s not do one show. If we get all of our gear there, let’s do two. And that saves us one whole cycle of packing it up and moving it somewhere else just to do one show. Let’s do two. Let’s do it on a weekend so we can maximize how many people would want to say yes to it These are all smart decisions. Let’s get that pop-up store Let’s have other things that we co-brand around too So it’s you know obviously Metallica Taylor Swift you two guns and roses They’re sort of at a different level out there in terms of how big they are and they obviously can do stuff like that But the economics of it are also very compelling, and I’m probably shortchanging how much residual revenue they make through more people subscribing to their music stations, the royalty payments, the purchasing of more of their music. There are also a ton of kids there as well, so almost a next generation getting exposed to Metallica and also over time investing in them as well. Really interesting business, really good salespeople, but their product really sells itself and that’s the great music that they deliver. But the more you can understand about how… the business of what you’re experiencing. If it’s a concert, if it’s sports team, if it’s the customers that you sell to, understanding how their business operates, how they make money, then with your goods and services and your insights, you can also participate and create solutions for them. And as I said on many Sales Warrior Within podcasts, when you know your client’s business.

That gives you this ultimate advantage where you can create unique solutions that really help them out. You can also have discussions about their business where they hopefully will open up to you and talk about, hey, here are the things that are going well financially for us. Here are the things that aren’t going so well. We need some help on productivity, on creating efficiencies, on driving down expenses. What can you do for us? Well, here are two or three ideas that I have. And oh, by the way, I understand your business because I’ve gone through the process of really analyzing it, being curious about it, and also just really making sure that I have a value proposition that can meet your needs as well. So my curiosity led me to do this podcast on Metallica’s business. I’m sort of blown away at how much they make. All worth it. If you have a chance, they’re in Texas this weekend, M72 Tour. It wraps up, I think, in August, September, actually. Few more stops, Phoenix is another one. And then they reboot next year. Same stage, same rig, same lighting, same setup. They know how to do this. They probably have a stage built in Europe that stays out there and moves around. They probably have one in the United States that moves around here, so they don’t have to pay to ship it across the Atlantic Ocean. So all good stuff. And thank you for listening to a fun episode for me, at least, to share with you. One of my passions, heavy music. specifically Metallica shows 16 and 17 in the books and Good for those 60 year old guys still head banging out there And also the business of Metallica is not something to sneeze at all very impressive Sales warriors, my name is Andy Olen always great to talk with you We’ll talk to you soon in the meantime good selling good leading and good living