Mick Jagger, Profit Maximizer
Today is the birth date of Michael Philip Jagger, known to the world as Mick. As true fans know, Jagger isn’t just the long-tenured front man of the Rolling Stones; he was also a student of finance and accounting at the London School of Economics.
He did not graduate from LSE, however; he attended for just a short time. I have read that he was asked to leave after riding a motorcycle through the library, but I doubt this is true — not just because it seems very unlikely, but because Jagger has never been as wild as his image. I mean this as a compliment.
Notwithstanding his short tenure at LSE, I do believe that Jagger is supremely smart when it comes to running a business. And that is what the Rolling Stones have primarily been for the past 20 or 30 years: a business, and a very well-run one. I have always thought that Jagger’s talents as CEO were overlooked — which probably suits him just fine, considering that when you are a rock singer, there’s some significant value in seeming more reckless and wild than a typical CEO.
The smartest thing about the Rolling Stones under Jagger’s leadership is the band’s workmanlike, corporate approach to touring. The economics of pop music include two main revenue streams: record sales and touring profits. Record sales are a) unpredictable; and b) divided up among many parties. If you learn how to tour efficiently, meanwhile, the profits — including not only ticket sales but also corporate sponsorship, t-shirt sales, etc., — can be staggering. You can essentially control how much you earn by adding more dates, whereas it’s hard to control how many records you sell.
The other thing about touring that’s nice for a band like the Rolling Stones is that it gives the non-songwriters a chance to make some real money. I’m sure that Charlie Watts, Bill Wyman, and Ronnie Wood made nice money from record sales over the years, but probably a lot less than you’d think. Jagger and Keith Richards, meanwhile, earn a lot more because they also earn a songwriting royalty. I have no idea whether Jagger pays Watts, e.g., as much as he pays himself for touring, but if one mark of a good CEO is providing an opportunity for everyone in the company to prosper, then Jagger is indeed a pretty good CEO.