The Economics of a Band That Won’t Fade Away
Rolling Stones
After an 18-year hiatus, the Rolling Stones on Wednesday announced the imminent release of an all-new studio album. “We were just a bit lazy,” said Mick Jagger (80) by way of explanation. Hackney Diamonds was recorded last December over only a few weeks after the three remaining band members agreed that fans’ patience had been tried enough. Drummer Charlie Watts, who anchored the band with his sober private life and immaculate drum play, passed away in August 2021.
However, the band plays on. The longevity of the Rolling Stones, unmatched by any rock ’n’ roll band of note, is rooted in friendship, genius, and a keen sense of marketing and economics. From the instantly recognisable tongue logo to a burgeoning catalogue of merchandise and periodic releases of live albums and rehashed classics, the band’s cash register runs hot without let up.
The genius of the band – effectively its CEO – is Sir Michael Philip Jagger. In the early 1960s, the lead singer and songwriter was a reasonably promising undergraduate at the London School of Economics and Political Science (LSE). At the time, he considered a career in journalism, law, or politics.
Sir Mick dropped out of school only after his nascent blues band clinched its first record deal with London Records (the British brandname of Decca) in 1963. The label was tipped by George Harrison to have a look at the band after it famously made the costly mistake of declining to onboard the Beatles.
Prince to the Rescue
The Rolling Stones are a corporate group as much as a rock band. Most of their business is conducted through three limited liability companies – bundled into the Promogroup BV holding – domiciled in The Netherlands for tax purposes on the advice of Prince Rupert Löwenstein (1933-2014), a merchant banker and Bavarian aristocrat – and scion of the former royal houses of Wittelsbach and Löwenstein-Wertheim.
Rupie the Groupie, as the prince became affectionately known, was hired by Jagger in the early 1970s when the Rolling Stones moved from the UK to France after it transpired that the band’s business manager Allen Klein (1931-2009) – an American with a reputation for squeezing record companies – had underreported the group’s taxable income.
The four Rolling Stones now owed about a million pounds in back taxes (approx. £20 million in current value1). Not only that, the band’s first manager and producer, the flamboyant Andrew Oldham – who had learned the mischievous tricks of the trade from Phil Spector – had negotiated an atrociously exploitative contract with London Records.
The deal afforded the band royalties of only 4.5 percent over record sales. That, and a top income tax rate of 93 percent, forced the band to move to France and prompted Mick Jagger to take management into his own hands. He turned to Prince Rupert for financial guidance but kept his executive power.
The tax exile proved both financially and artistically fruitful. The band laid down the basic tracks of the Exile on Main St double album in its mobile recording studio – which later saw use by immortal rock greats such as Led Zeppelin, Fleetwood Mac, The Who, and Deep Purple2 amongst many others – and an improv studio in the basement of Keith Richard’s rented villa in Villefranche-sur-Mer.
Libertarian Streak
Whilst the album’s slightly muddled sound initially received mixed reviews, it has since been recognised and acclaimed as the Rolling Stones’ best work and a pivotal event (‘The perfect definition of rock decadence’ according to The New Yorker) in the history of hard rock. Rolling Stone Magazine – ‘All News That Fits’ and no relation to the band – ranks Exile on Main St seventh on its The 500 Greatest Albums of All Time list. The chart is (of course) topped by the Beatles’ Sgt Pepper’s Lonely Hearts Club Band.
A self-confessed disciple of Austrian economist Friedrich von Hayek and sporting an unapologetic libertarian streak, Mick Jagger steered ‘his’ band to untold riches after he took over its reins. The tax debt was paid in full although the Stones never again settled in the UK, splitting their time between continents instead and claiming non-dom status when visiting home.
Last year, Promogroup BV reported a revenue of €30.3 million (£26 million) and an operating result of just €310,000 (£266,000) over which €69,400 (£59,500) in taxes were owed – a testament to smart fiscal planning. According to Forbes magazine the band earned over $98 million (£78.5 million) in the 2021-22 fiscal year from concert receipts and record royalties.
Even after 61 years in the music business, the Rolling Stones remain hip, cool, and indeed very rich. Age does not seem to grab hold of them. Although precise numbers are scarce, the band is estimated to have grossed in excess of $1.5 billion (£1.2 billion) between 1989 and 2002, a period spanning less than a quarter of the group’s career. Sir Mick’s worth is an estimated $360 million (£288.5 million) whilst Keith Richards’ fortune comes in at an equally impressive $340 million (£272 million), not bad for two blokes from Dartford, Kent.
Libertarian Streak
Whilst the album’s slightly muddled sound initially received mixed reviews, it has since been recognised and acclaimed as the Rolling Stones’ best work and a pivotal event (‘The perfect definition of rock decadence’ according to The New Yorker) in the history of hard rock. Rolling Stone Magazine – ‘All News That Fits’ and no relation to the band – ranks Exile on Main St seventh on its The 500 Greatest Albums of All Time list. The chart is (of course) topped by the Beatles’ Sgt Pepper’s Lonely Hearts Club Band.
A self-confessed disciple of Austrian economist Friedrich von Hayek and sporting an unapologetic libertarian streak, Mick Jagger steered ‘his’ band to untold riches after he took over its reins. The tax debt was paid in full although the Stones never again settled in the UK, splitting their time between continents instead and claiming non-dom status when visiting home.
Last year, Promogroup BV reported a revenue of €30.3 million (£26 million) and an operating result of just €310,000 (£266,000) over which €69,400 (£59,500) in taxes were owed – a testament to smart fiscal planning. According to Forbes magazine the band earned over $98 million (£78.5 million) in the 2021-22 fiscal year from concert receipts and record royalties.
Even after 61 years in the music business, the Rolling Stones remain hip, cool, and indeed very rich. Age does not seem to grab hold of them. Although precise numbers are scarce, the band is estimated to have grossed in excess of $1.5 billion (£1.2 billion) between 1989 and 2002, a period spanning less than a quarter of the group’s career. Sir Mick’s worth is an estimated $360 million (£288.5 million) whilst Keith Richards’ fortune comes in at an equally impressive $340 million (£272 million), not bad for two blokes from Dartford, Kent.
- $25 million / €23.3 million
- In 1971, Deep Purple recorded the hit album Machine Head in the Rolling Stones Mobile Studio (RSM) whilst the truck, a DAF F1600 Turbo, was parked next to the lakeside Montreux Casino. The venue caught fire during a matinée performance of Frank Zappa and the Mothers of Invention when a member of the audience fired off a flare. The incident inspired Deep Purple’s iconic hit song Smoke on the Water.
Sir Mick’s 5 Lessons for Business Success
Get the Right Name
The renaming from Little Boy Blue to The Blue Boys and finally Rollin’ Stones has been credited to Brian Jones, the lead guitarist and public face of the band during its first years. Manager Andrew Oldham did away with the apostrophe and gave the group its final name which perfectly conveyed the the style and attitude of the band.
Know Your Market
By the time the Rolling Stones were ready for breakout, the Beatles had already claimed the high ground as wholesome, nonthreatening, and well-behaved. Rather than imitate the Beatles, the Stones went rogue to become loud rebels kicking against convention and upsetting mores. They found their niche and filled it.
Borrow, Steal, Improve
Drawing inspiration from Chicago blues and gospel, Mick Jagger and Keith Richards added their own twists – steel, speed, and raw lyrics – to the style, forging an instantly recognisable brand identity that follows a standard pattern: opening riff, groove, and lowdown on the topic at hand.
Remove Drag Ruthlessly
The Rolling Stones were the original creation of Brian Jones whose guitar play at the Ealing Jazz Club mesmerised Mick Jagger and Keith Richards. Soon a band was formed. However, the road to success proved too hazardous for Jones, who by the late-1960s failed to show up for rehearsals and often disappeared without a trace whilst on the road. In June 1969, his three fellow band members fired him. Jones died a barely month later, laden with alcohol and pills, drowned in his pool.
Adapt and Reinvent
Masters of reinvention, the Rolling Stones effortlessly traversed five distinct styles: blues cover band, 1960s pop, 1960s acid rock, 1970s groove, and 1980s new wave – never failing to impart their own imprint. The Rolling Stones have been reborn numerous times, spanning generations, and always leaving and indelible mark.
