Profile:Genuine living rock legends they may be, but for many people the most interesting thing about the Rolling Stones in 2007 is that they only pay tax at 1.5 per cent, writes Brian Boyd.
A few weeks ago the Rolling Stones were paid $5.4 million (€3.9 million) for an 80-minute gig in Barcelona. They played to just 500 people, all top bankers with Deutsche Bank. At the end of the show, Mick Jagger eyeballed the assembled suits and said: "Thanks for having us. The best part of this is, it's coming out of your bonuses."
All the major acts play corporate shows. If you were celebrating the purchase of a new kettle and wanted Elton John to play in your back garden, he'd turn up if the price was right. What's different about the Rolling Stones is that they don't just trouser the cheque, they go out of their way, as in Barcelona, to find out whose budget their fee is coming out of. Useful information if you're in a position to invest in a bank and want to know who foots the bill for its "socials".
The $5.4 million for 80 minutes' work is an even more impressive figure when you realise that the band will only be paying a 1.5 per cent tax rate on it. This is because, as many entertainers are now learning, the Netherlands is the new Cayman Islands.
The Dutch realised a long time ago that intellectual property was a booming business and set up specially designed tax shelters - all perfectly legal - to attract the very top earners. A band's song-writing royalties qualify as intellectual property, as do incomes earned from recording, performance, trademarks, product endorsements, videos and films. Other beneficiaries of Dutch tax shelters include U2 and David Beckham. But these latter two are very much newcomers - the Stones have been channelling a large proportion of their income through Amsterdam for the last 20 years. According to papers made public by the trade registry of the Netherlands, during this time period the Stones have paid just $7.2 million (€5.2 million) in taxes on earnings of $450 (€325).
Prompted by Keith Richards's near-fatal fall from a tree last year, the band have also just set up special Dutch foundations that will allow them to transfer their assets tax-free to heirs when (or should that be if?) they die.
For many, the financial behaviour of the Stones is the perfect act of revenge wreaked upon a corrupt music industry. As one of the very first rock'n'roll bands to make a multi- million fortune during the 1960s (only Elvis and the Beatles could match them), the band fell foul of music industry contracts they had signed as teenagers, which were very heavily weighted against them.
Despite having sold millions of records during the 1960s, at the end of the decade the band were forced to move to France because they simply couldn't meet their punitive tax bill in Britain. They were near bankrupts, and their earnings were nowhere near what they would have been in today's "get a lawyer to fine-comb that" world.
Whatever about the tax rate in Britain back then, there was also the drink, drugs, court cases, deaths, prison sentences, marriages, break-ups and paternity tests for the Stones to consider - all of which meant that the idea of locating an advantageous tax shelter was somewhere down the agenda.
TWO PEOPLE HAVE been responsible for turning the Stones from relative paupers into rock'n'roll's biggest ever net earners. The first is a "society friend" of Jagger's, Prince Rupert Lowenstein (known as "Rupe" to the band) who, despite objections, persuaded them to ditch their British residency status and pay tax elsewhere. Lowenstein, known as the "human calculator", is now in his 70s and has just stepped down from the day-to-day running of the band's financial affairs, which he has been doing since 1970. It is estimated that the band have grossed $2 billion (€1.4 billion) during his stewardship. To this day, the individual members of the Stones know about as much about how to handle money as they did when they were nearly declared bankrupt.
The second key person for the Stones is the little-known Canadian ex-music promoter Michael Cohl. Before Cohl, all rock tours were done in conjunction with local promoters on a country-to-country basis. For the band's 1989 Steel Wheels tour, Cohl approached the band with what was then a startling proposition. He would guarantee the band €32.5 million if they handed the whole tour over to him. Crucially, Cohl also delivered sponsorship deals with Tommy Hilfiger, Volkswagen and Budweiser.
The Steel Wheels tour brought in more than €203 million from ticket sales, merchandise sales and sponsorship deals. It remains the most successful rock tour - in terms of profit - ever staged. This "one global fee for the band" model is now favoured by U2 and is fast becoming the industry standard for big name draws.
It may seem a tad cruel, but for many it does appear that the most interesting thing about the Rolling Stones in 2007 is that they only pay tax at 1.5 per cent.
The band haven't had a top-10 single since 1981's Start Me Up and haven't released anything of huge musical merit since that same year's Tattoo You album. It is generally agreed upon by critics that the band's creative high point was between the years 1968 and 1972 when they released what are still regarded as four classic albums: Beggars Banquet, Let It Bleed, Sticky Fingers and Exile On Main Street.
Why then are the band still enjoying record-breaking tour receipts when others of their vintage (Dylan, Neil Young) are playing to far smaller crowds. The only band which can match them for selling out an entire global tour in a matter of minutes is U2, but the latter are still charting their new albums at number one, whereas the Stones' new work (and there's still a new album every two to three years) is released to general disinterest.
A possible answer is the conversation this reporter had with a member of their management team during a European concert a few years ago. The band had just played for 2½ hours, they had given it a lot of welly and had dipped judiciously into their sizeable back catalogue. They played with all the ferocity and passion they had displayed at their first ever gig - in London's Marquee club in 1962. The Stones' management team person said she was also working with a well-known girl group - and four shows into a tour that only saw them play for 40 minutes each night (and lip-synching at that) the girls were complaining of "nervous exhaustion".
IN AN AGE when CD sales are in decline, the live show is now paramount, and the Stones have not just the experience but also the weaponry (in terms of the songs they can draw on) to outgun most all of the opposition. A Stones show is an event and Jagger as the whirling dervish front man makes Justin Timberlake and Robbie Williams look like early X Factor rejects.
Because of their cross-generational appeal, they attract the younger demographic, people who may only know them because today's newer stars cite them as an influence, and the older demographic who remember tabloid headlines such as: "Would you let your daughter marry a Rolling Stone?"
And there's a certain comforting certainty about a Stones gig. They've been in the business long enough to know that the audience doesn't want to hear too much (or any) of their newer material. They want the time-honoured hits - and going from what they've played so far on the European leg of this tour, it can be confidently predicted that they'll open next week in Slane with Start Me Up, they'll play Ruby Tuesday, and after Tumbling Dice Jagger will introduce the band and then Keith Richards will get to sing two songs before they move to the second stage (located within the audience) to play Miss You and It's Only Rock'n'Roll before, back on the main stage, they finish with Jumpin' Jack Flash and encore with Brown Sugar.
The VIP enclosure at Slane next Saturday, on the 25th anniversary of the first time they played in Lord Henry Mountcharles's back garden, will be virtually indistinguishable from the Fianna Fáil tent at the Galway Races. The press coverage will be more "who was there" than "what they played".
The show will undoubtedly be a masterclass in rock music performance, and when Keith Richards hits the intro riff to I Can't Get No Satisfaction, who knows, maybe even the prawn sandwiches will go untouched for a few minutes?
TheRollingStonesFile:
Who are they?
The Rolling Stones, or, if you're a headline writer under pressure, "The Strolling Bones", a side-splitting reference to their sexagenarian status.
Why are they in the news?
They're back to play Slane Castle again. They haven't changed that much since 1982 - and neither has the set list.
Most likely to say:
"Can we reclaim the VAT on that?"
Least likely to say:
"Thanks Slane, but we got paid more for the Deutsche Bank gig."
Lyric rewrite for Jagger:
"Thanks to a 1.5 per cent tax rate, I can now get not just satisfaction but financial security as well - a hey, hey, hey."