Madonna & Argentina

Back in June, I blogged about Madonna skipping a potential tour date in Lima, Peru due to the economics of the deal. I noted that Madonna usually requires a $4 million price tag for each concert that she does, regardless of location. The largest stadium in Peru seats 45,574 people which would have required an average ticket price of $88, quite high for a country where most people in their 20′s are happy to bring home $300 a month.

Apparently, Madonna has covered her $4 million and then some for her upcoming December 6th date in Buenos Aires, Argentina. In fact, ticket sales have been so overwhelming that a second date, Dec. 7th, has been added to the lineup. The concert on the 6th sold out in 3 hours.

So why is Madonna going to Argentina but skipping out on Peru? I think there are 4 main reasons for this:

1. Basic population and financial considerations. 40 million people live in Argentina. 29 million people live in Peru. Within the metro areas of Buenos Aires and Lima, there are 13 million and 9 million people, respectively. Average wages per person in US$ equivalents, per year, across the board are $13,300 in Argentina and $7,800 in Peru. For some perspective, they are $45,800 in the USA.
2. The size of the stadium where Madonna will perform. In Peru, the largest stadium where Madonna could have performed would have been the Estadio Nacional (National Stadium) with a mere 45,574 seats. Argentina on the other hand has the River Plate Stadium that seats 70,000 people. For Madonna to make her $4 million, tickets in Peru would have needed to average $88 a pop, but just $57 a pop in Argentina.
3. The Live Nation & Time For Fun Argentina partnership. Recently, Live Nation secured a strategic partnership with Time for Fun for concert promotion. Time for Fun also operates in Lima, but it appears that the partnership is stronger in countries such as Brazil and Argentina. Live Nation has signed Madonna exclusively to a large 360 deal where they capture revenues from a number of different streams. Live Nation’s CEO has stated he expects to bank $240 million just from this tour alone. Live Nation is paying Madonna $120 million over 10 years for the privilege.
4. Evita. Honestly. Madonna starred in a movie about an iconic figure in Argentinian history. I’m sure a large part of the fan connection is due to that movie.

There are other factors as well. It was reported that Peru lacked the necessary equipment for such a major production. There are also a number of considerations with managers, promoters, venue availability, etc that are never seen by the public as well. This will be Madonna’s first Argentinian tour since 1993. When tickets went on sale for this Dec. 6th date, they reportedly sold for between 110 – 700 Argentinian Pesos (US$ equivalency of $33 – $230). The best seats are now selling on Argentina’s version of ebay for US$1500!

The economics and outlying reasons an artist chooses one location over another are fascinating to me. In Madonna’s case, she will be beloved anywhere she goes, except perhaps for a concert at the Vatican. So for her and Live Nation, it comes down to simple economics. I would venture to say that 45,000 people would turn out for her concert in Peru, but Madonna might not leave the country with the type of money she needs to support her tour.

Stay tuned,
Erik
erikrostad.com