Can MGM Profit After Paying Lady Gaga $1 Million Per Residency Show?

Okay, I'll bite. In your response to the question about the economics of Las Vegas entertainer residencies, you wrote that Lady Gaga's guaranteed million dollars per show is "a whole other story — if anyone cares to submit a follow-up question." Here it is. What's that story?

To review, an article in Variety reported that Lady Gaga will be guaranteed $1 million per show for the 74 shows she’s committed to (initially). This is twice as much as Céline and Britney earn per show.

Variety wrote, “Industry insiders contend that the Gaga numbers don’t add up in a way that makes financial sense for MGM Resorts. At the reported Gaga rate, that means a seat in the 5,200-capacity Park Theater would cost the ticket buyer at least $200 just to clear Gaga’s take-home, a steep price, her production value notwithstanding.”

We’re not sure $200 is all that much for a ticket to see the hottest act in show biz. By comparison, Céline’s average ticket price is a reported $259, with seats going from $100 to $1,500. Even Jennifer Lopez averages $185 per ticket. It’s not hard to imagine that Gaga could match Céline's sell-out attendance — and the Park Theater has 1,100 more seats.

In addition, the VIP packages and meet-and-greets are extremely lucrative. Britney Spears gets up to $2,500 for the top-tier experience. Lady Gaga could probably charge even more and she’d have to sell only 100 per show to cover 25%-35% of her nut.

No doubt MGM will be selling all kinds of room-food-show packages to fans coming from all over the world. She has more than 75 million Twitter followers. And the lure for high rollers will be practically irresistible.

Nearly 400,000 people will be packing Park Theater for the 74 shows; MGM’s additional revenues from those numbers will be the equivalent of a record-setting New Year’s Eve.

Merchandise sales will no doubt go through the roof and MGM and Gaga split those 50-50. Autographed merch? She can probably name her price. And fashion? She could fill a whole store at Park MGM with cross-promotions; she has partnerships with Urban Outfitters, Joanne, and Tiffany, for example. The cross-branding potential for MGM is extremely strong.

All in all, though Variety is the industry-leading publication and we certainly respect its published opinions, we’d have to say that when Lady Gaga’s in residence, all bets are off.

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Comments

Pat Higgins Oct-02-2018

Pat H

Frankly I would not pay $10 to see Lady Gaga.  I am a 77 year male and do not like her music, how she dresses, her tattoos, etc.

Brent Hodgeman Oct-02-2018

Yes, They'll Make Money

I have tickets for one of her shows in January. For the General Admission standing room only tickets, I paid around $350 after taxes fees. Easily the front 2/3 of the theater was priced $350+, and only the very back section was around $200. The very last row was $89. With 2/3 of the tickets going for around $350+, MGM will definitely make money. Of course, the first 5-10 rows of the front section are sold as "Platinum Tickets" at a much higher cost, and word has it that meet and greets are $2500+ and do not even include a ticket to see the show.

Randall Ward Oct-02-2018

i can see it

if her movie does well i can see the dollars coming in. I'm not interested but that level of stardom fascinates me, and the merch will sell.

Ray Oct-02-2018

Make it while you can

MGM will charge whatever they can get for the shows. They wouldn't pay her that much if they didn't think they would profit from it. And to comment on Pat's comment, MGM knows that many of us wouldn't go, but they also know that enough people will go and will pay the price. And they'll make more money with a high profile, expensive act than with an act that he or I would go see.

Jackie Oct-02-2018

I'm only 70 Pat

But I don't even know who this person is.  I've at least heard of Brittany and Celine.  But it all doesn't mater as I would never pay that kind of money to see any of them.

Kevin Lewis Oct-02-2018

Going all Gaga

And let's not forget that people will have to pay $20 to park to see the show!!!
Remember when entertainment was a loss leader for the casinos and they expected to make up the costs of providing it with room sales, gambling revenue, etc.? Now, the corporate mentality means that every single aspect of the operation has to make money. All they had to do, though, it seems, was jack up the price of the tickets so that everyone is paying about $6 a minute to hear her warble (or bleat, or snort, or whatever it is she does--I've never even listened to her music).

Question of the Day - 02 October 2018

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