Beckham was wasted on his sport. Most of the money made out of him in his career probably went to the player himself, his boot company and other sponsors, who are cleverer than the people who run football clubs.
—Simon Kuper and Stefan Szymanski, Soccernomics
It seemed like Christmas in July when I landed on the guest list for Jeff Koons’s Popeye Series private opening at the Serpentine Gallery (a friend high up in London’s art world managed to finagle an invitation for me). London had, by some extraordinary aberration, been experiencing gorgeous sunny days and blue skies. In that part of the world, if the rain’s not pouring down, the summer sky remains light until nine p.m., which makes evenings seemingly last forever. The Serpentine Gallery is located in the heart of Hyde Park, a public space so glorious that a summer evening wandering through it is a sublime pleasure that even Londoners don’t take for granted. The Serpentine Gallery is about as innovative and cutting-edge as the institutionalized art world gets, and attending an opening there is like scoring a ticket to the Marc Jacobs show at New York Fashion Week. The Serpentine is one of a few pivotal art institutions around the world that set the stage for who and what to care about. And, of course, not to bury the headline, Jeff Koons is about as iconic and interesting as a living artist can get. Even if one doesn’t like his blend of the banal and the fantastic, and his sensationalist high-art-meets-hard-core-porn aesthetic, experiencing the Koons phenomenon in person is a rarified experience. Koons’s July 2009 opening at the Serpentine was also a first: Despite worldwide acclaim, he had never had a solo exhibition in London, which is pretty surprising given the city’s position at the center of the art world and Koons’s position as one of the most important artists in history.
The event was swarming with the beautiful people set, paparazzi and cameras out in full force filming ad hoc interviews with celebrity attendees. Koons’s artist dinner the night before had been awash with celebrities, from socialites and models to the photographer David Bailey and Koons’s art dealer Larry Gagosian, to other art stars like Tracey Emin and the Chapman brothers. All of these details had been splashed on the pages of the London Evening Standard and Vogue online. On the warm and lovely evening of the opening, Koons stood in the middle of it all, oddly not heckled by the milling fans (I suppose in Celebrity World, celebrities treat one another with equality). A very large and and very tan chiseled man stood next to the rather slight Koons (both men wearing smart suits, no ties), which might also have explained the general lack of frenzy around Koons. Despite his easygoing stance, Koons’s Ken doll sidekick was definitely a bodyguard, ready to become intimidating at any minute.
One might think it strange that an artist would need a bodyguard, but Koons’s opening was more like a celebrity birthday party than a highbrow art event. The people swirling about were not stuffy art critics stroking their chins and using words like “postmodernity.” Instead, the girls were wearing tiny dresses and sky-high stilettos, and the guys were stylishly disheveled. Most art openings are scenes, but Koons’s managed to trump even the best of those: More people were outside sipping cocktails than inside the gallery looking at the exhibit. But don’t think this demonstrates some lack of appreciation for the art. This heady, glamorous scene is exactly the thing that has made Koons go from artist to art star, leaving broken auction records in his wake. Koons is emblematic of modern celebrity economics: We are always paying a premium for star power.
Jeff Koons is a curious and remarkable person. An American artist who has worked primarily in New York City, by the mid-1980s (when he was in his late twenties), Koons had begun to build quite a name for himself. His method of employing factorylike production techniques is often compared to Andy Warhol’s. But that’s about where the normal “artist story” ends. In 1988, Koons solidified his position in the art world with his now famous Michael Jackson and Bubbles: an enormous statue of Jackson and his chimp done in delicate porcelain and gold plated, resembling a magnified version of those tiny collectible figurines that little old ladies place on side tables next to the jelly bean jar. There is no irony lost in the fact that this faux kitsch depiction of an iconic celebrity is partially what launched Koons’s own star status.1
In the last two decades, Koons has continued to make outrageous and fun art that has been either reviled or adored by the community, a paradoxically powerful method for success. In 1992, he created Puppy, a forty-foot-tall flower sculpture of a…puppy. In 2006, Koons showed his five nine-foot-tall metallic Hanging Heart sculptures (a part of his Celebration series), their vividness and size fully appreciable only in real life. He has done several other pieces in bright metallic colors, including a balloon dog and his enormous Balloon Flower.
Koons’s Popeye Series, exhibited at the Serpentine, is a mixture of sculpture and painting: The sculptures are made of aluminum and have the appearance of children’s plastic swimming pool toys. The paintings (an art form he has also practiced throughout his career) depict montages of conflicting images from popular culture: The exhibit as a whole is composed of both the sculptures and silk screen mosaics of semi-naked women, pool toys, and, of course, the cartoon character Popeye. Koons’s signature contribution to the art world is taking what seems boring, banal, and pedestrian and making it fantastic by employing large size, outlandish color, and ironic juxtaposition. While some might say Warhol did this too, Koons’s creations are far splashier and far bigger: Many of his sculptures tower tens of feet tall.
Koons is possibly the most celebrated living artist, with only the British artist Damien Hirst as his real competition. And his position as the art star is reflected in a tangible way: His work appears in every major art institution worth its salt and he is one of the richest living artists, second only to Hirst. To be clear, I mean rich in a global sense, not relative to the average starving artist. In 2001, Michael Jackson and Bubbles sold for $5.6 million. Six years later, one of his Hanging Heart sculptures sold for $23.4 million at Sotheby’s to the celebrated art dealer Larry Gagosian, making it at the time the most expensive piece of art by a living artist. Less than a year later, Balloon Flower (Magenta/Gold) sold for $25.7 million.2
There are plenty of art critics who think Koons is a snake oil salesman and a trickster, creating works for the “tacky rich,” in the words of one commentator. Michael Kimmelman of the New York Times called Koons’s work “boring,” remarking that “the hollowness the artist reveals seems fundamentally his own.”3 But, frankly, when you’re Jeff Koons laughing all the way to the bank with a $25 million check, or when star maker Larry Gagosian buys your art like candy and thinks you’re a genius and celebrities line up to attend your dinners and openings, who cares? The art devotees who think Koons is making a mockery of them and of art might be right. Koons himself claims his work means nothing more than what it appears to be on the surface, once commenting, “My work has no aesthetic values.”4
Koons’s 1991 Made in Heaven series featured Koons and his then-wife, Ilona Staller (aka Cicciolina, the Hungarian-born porn star who went on to become a member of the Italian parliament), and consisted of graphic close-range depictions of him and Cicciolina having very raunchy sex. It’s unnecessary to go into all the details; a pithy description from art critic Kimmelman suffices: “Artificial and cheap in their settings and emotions, they are not fundamentally different from what one might see in Hustler magazine, translated almost to the scale of a movie screen.” I haven’t had the opportunity to see the work in real life, but recently I saw the collection in a book of Koons’s work and I admit that one can appreciate Kimmelman’s outrage. Koons and Cicciolina were certainly not in the business of discretion, and one would be hard-pressed to call the series high art in the conventional sense. “Cheap” isn’t the word I would use to describe the images, but my first glimpse of them was jaw-dropping.
But that is precisely the point. There is a subplot throughout Koons’s art career that should not be ignored. Koons is no run-of-the-mill talented artist. His events are attended by the who’s who of the art world and the world at large. His work is bought by Hollywood stars. His sculptures break auction house records. Even people who don’t care a fig about art know Jeff Koons’s name and find his persona interesting and his work accessible. But Koons wants that to be the case; he is not an art star by accident. What drives the critics crazy is that Koons cultivates his celebrity. As one art critic observed, “In an era when artists were not regarded as ‘stars,’ Koons went to great lengths to cultivate his public persona by employing an image consultant.”5 Consequently, Koons set up a massive ad campaign complete with bikini-clad girls in international art magazines, touting his great success.6 In interviews and public appearances, he began “referring to himself in the third person.”7 He even held autograph signings. And of course there was the marriage with the porn star/MP, Cicciolina, and its spectacular demise in 1992.
These days, Koons remains a fixture on the gossip circuit, with Koons sightings—from an appearance at the Chanel party to hanging out with rock star Lou Reed—appearing in boldface in the New York Post’s Page Six, which dubbed him “bad boy emeritus.” His celebrity has inspired a backlash of sorts (possibly one that Koons relishes). “Jeff Koons has provided one last, pathetic gasp of the sort of self-promoting hype and sensationalism that characterized the worst of the decade,” Kimmelman remarked, concluding that Koons was “self-destructive,” with nowhere to go but down. That was back in 1991, though, before the giant pink flower sold for $25 million.
Despite the criticism, Koons’s celebrity is actually part and parcel of his influence in the art world and position in art history. If the market price and Larry Gagosian association are any indication of success, then Koons has blazed to the very top. In a world so subjective and devoid of objective measures of value, Koons has dominated the stage, front and center.8 As the University of Chicago economist David Galenson found in his study of living artists, those artists who have sold their work for the highest auction prices are also those who end up in art history textbooks. “Art scholars and critics often claim that markets for art are irrational,” Galenson writes, “and that the value an artist’s work brings at auction is unrelated to the real importance of that artist’s work. These claims are wrong…Auction outcomes can systematically identify today’s greatest living artists.”9 Koons is second only to Damien Hirst in this respect. To be sure, Koons’s work is innovative and deserves to be recognized and rewarded. But rewarded is one thing and being paid $25 million for a metal sculpture of a flower is entirely another. Koons’s celebrity has reconstructed the art market—even Jasper Johns couldn’t compete—and paved the way for Damien Hirst, who first became famous in the 1990s for his dead shark suspended in an enormous fish tank. Renowned art collector Charles Saatchi purchased Hirst’s 1990 work A Thousand Years (a large sealed glass container with a cow’s head and maggots) and then bankrolled him £50,000 to make the shark piece, which Hirst titled The Physical Impossibility of Death in the Mind of Someone Living. At the time, the commission price was considered so absurdly high that the Sun ran the headline “50,000 for Fish Without Chips.”10 Despite the outcry, the shark became the iconic symbol of 1990s Britart and the rise of the Young British Artists (YBAs) in the global art world.11 In 2005, the artwork was sold for $8 million to the American hedge fund manager Steven Cohen.12 In August 2007, Hirst reportedly sold his diamond-encrusted skull, For the Love of God, for $100 million (the date of sale has been disputed by critics).13 “If anyone but Hirst had made this curious object, we would be struck by its vulgarity. It looks like the kind of thing Asprey or Harrods might sell to credulous visitors from the oil states with unlimited amounts of money to spend, little taste, and no knowledge of art,” the art critic Richard Dorment commented on the work. “I can imagine it gracing the drawing room of some African dictator or Colombian drug baron. But not just anyone made it—Hirst did. Knowing this, we look at it in a different way.”14 A few months later Hirst went on to break auction house records with his work Beautiful Inside My Head Forever, the very same week that Lehman Brothers and the world economy fell apart.
Koons and Hirst exemplify an important part of celebrity: There is money to be made hand over fist if you can cultivate a public interest in yourself that equals or exceeds interest in your work. “Hirst is as much or more known for his lifestyle as for his art,” remarks the art historian Julian Stallabrass, “and he takes care to ensure that the two are thoroughly entangled.”15 Certainly talent is important, insofar as we can realistically compare it among artists. But creating a persona that people care about is sine qua non for going from artist to art star. Like any other cultural product that cannot be evaluated with complete objectivity, the value of a particular song, actress, or, in this case, artist comes from the public collectively agreeing on who’s hot and who’s not. Much of that collective concurrence lies in our relating to that person and being fascinated with him or her: This is the fundamental attribute of celebrity. And, of course, celebrity can be turned into big bucks.
Galenson has devoted much of the last decade to looking at the relationship between art price and an artist’s importance, which is well illustrated in the cultivation of people like Hirst and Koons. Galenson explains that Picasso and Marcel Duchamp are the early examples of artists as stars.16 Rather than limiting their work to commissioned portraits for kings and religious leaders, they began doing portraits of art dealers themselves. Consequently, these artists were able to create a market for their work that circumvented the traditional channels of patronage that artists had to go through to establish their careers.
Part of establishing this new market was creating signature art styles that were synonymous with them as individuals. Picasso’s cubism and Duchamp’s readymades were so associated with them that the styles became something more like personality traits in the eyes of the public. “The real payoff is that certain artists appear to have personalities that if not trump, certainly complement their work,” Galenson remarks. Further, they challenged traditional definitions of “talent”: Duchamp’s most famous work is a urinal that he flipped 90 degrees and called Fountain, submitting it to an art show under the pseudonym R. Mutt. Clever, yes, but how does one measure the skill in it? “Using talent becomes impossible in the 20th century,” Galenson explains. “How good a draftsman are they? How good a painter? Well, how do you measure Duchamp’s talent? The urinal?” This conundrum, he believes, is precisely the point: In the twentieth-century art world, talent became increasingly ambiguous, and the personalities associated with the artwork became more important. As Galenson put it to me, “See, Picasso created a persona, and Duchamp did even more so. If you’re trying to explain a piece of ready-made, you can’t explain it simply through the work. You need to explain it by reference to a particular artist.”
This inextricable link between personality and art has driven the popularity of many of the great art stars of the twentieth century. Duchamp put a fake name on a urinal and submitted it to an art show that claimed it would accept anything. When it rejected the urinal, Duchamp had essentially proved the show’s elitism; in light of this, the piece was as much publicity stunt as artistic creation. The public was as intrigued and perplexed by Duchamp as by the artwork. “Is he serious or is he joking?” Galenson questioned. “Can’t he be both? Duchamp always avoided the question. [Yet] as long as the debate goes on, Duchamp is immortal.”
Decades later, Andy Warhol took the lessons of Picasso and Duchamp to heart, cultivating public interest in himself and creating art that the public could not interpret without attempting to interpret him. We can’t understand Warhol’s work without his endless interviews that revealed his “deep superficiality,” as he termed it. Artists were not supposed to strive—at least not openly—for fame and money. But not only did Warhol care about money, he had the gall to paint dollar bills. Warhol’s strange public behavior made him a figure of interest. He was always odd and unemotional, hung out with socialites and rock stars, and never stepped out of character. (Like Koons, he held autograph signings.) He made silk screens of Campbell soup cans and called them “art.” And as with Duchamp, the public and art world asked, “Is he serious or is he joking?”
Jeff Koons fits this model perfectly. We are as fascinated with him as a person as we are with the stuff he puts on art gallery walls, and we cannot separate the two. His persona, which never wavers, is part of his innovation as an artist. Julia Peyton-Jones, director of the Serpentine Gallery, is the genius behind the summer 2009 Koons exhibit. When I spoke with her about the Koons phenomenon, she explained that the worth of an artist and his importance in art history are also based on his larger contribution. The way the world and society view the artist is just as important as his skill as a painter. “I think that the word ‘talent’ just doesn’t come up in that sense,” Peyton-Jones explained. “I would never say, ‘Jeff Koons is a very talented artist.’ One talks about the work and its influence, but talent is implicit. But talent in doing what? What are the constituencies that make someone talented? Talent is not a theme or word that is helpful; it’s really about an artist’s contribution; it comes down from their work. You can’t separate art from its artist.”
This contribution is precisely the reason Jeff Koons, whether you like his art or not, has become one of the most important art figures of the twentieth and twenty-first centuries. Koons, his personality, and his impact on the world transcend his art. Jeffrey Deitch, formerly an international art dealer and gallery owner and current director of Los Angeles’s Museum of Contemporary Art (who financially supported Koons in the past), explains that talent is essential, but the art star is an individual who becomes bigger than his work. The art star is the person with the colorful personality who bothers to go out to the parties. “There is a whole class of people who ‘go out’ [and their] profile is much higher than that person who does not,” Deitch explains. “Life has become more interesting. We [the public] have more interesting information. Artists who have a consistent image of the way they dress and make provocative statements might be seen in the company of famous people. This will give them higher profile than if they did the same work [but didn’t go out].”
Koons’s art openings, though they may appear to be thinly disguised parties for celebrities, are all to a very important end: These accoutrements are actually essential to maintaining his place in the art firmament. What Koons has recognized and successfully executed is that the market will pay a premium for his celebrity. Sure, over 99 percent of us cannot afford a Jeff Koons piece. But the less than 1 percent who can are making their purchases based on more than just the art itself. There is a collective buzz about Koons.17 People line up around the block to get into his exhibitions. His Michael Jackson and Bubbles is high art (it’s in the Los Angeles County Museum of Art, after all) but has also made it into popular culture. People talk about Koons and his work synonymously. And Koons actively proclaims that he’s the artist we should pay attention to. “The seriousness with which a work of art is taken is interrelated to the value that it has,” Koons told critic Anthony Haden-Guest. “The market is the greatest critic.”18
So, by virtue of fame and fortune, is Koons better than all the other living artists who have won awards and been deemed great by the aficionados? Many industry insiders certainly believe art stars like Koons and Damien Hirst are extraordinarily talented: After all, Hirst was awarded the prestigious Turner Prize given annually to a young English artist. Koons is considered a great influence on much of the contemporary conceptual art that came after him, including the work of Hirst and other YBAs. Art experts have a long list of stars who they think are in the same talent league as Koons, but these others have not gotten nearly the press or buzz. Sandy Nairne, director of London’s National Portrait Gallery, points to the “Saatchi effect” (of which both Koons and Hirst have been recipients). When Charles Saatchi invests in a particular artist, he influences the broader international market and creates celebrities. Saatchi is good not only at picking talent, he’s good at picking artists whose personalities, antics, and lifestyles are interesting to a mainstream public. His artists tend to be real characters, individuals who have more going on than just their art. The same style of picking art stars is attributed to art dealer Larry Gagosian (who has also invested in both Hirst and Koons).
Many artists are deeply respected yet never become mainstream stars. Even artists who do have a wide following and art world recognition may never become known to the wider public. Gerhard Richter is a favorite among art aficionados, he gets major exhibitions, and anyone who knows art knows him. Richter is undoubtedly a full-fledged relative celebrity, an individual obsessed about within his particular world. Despite his talent, however, Richter isn’t a flashy art star to a wider public, even if his work is considered some of the best of the twentieth and twenty-first centuries.19 His most expensive piece of work sold for nearly $15 million, which is a lot of money, to be sure, but $10 million less than a Koons heart and $85 million less than Hirst’s skull.20 “Richter has not created a persona,” Galenson explains. “Koons and Hirst wanted to be celebrities and they worked on it.” It’s impossible to say whether Koons and Hirst are “better” than Richter. As Peyton-Jones put it, “What do we really mean by an art star? Artists who go far beyond the art world? Or do we mean the far greater number of artists who are not known except among the art world? Within the art world, it would not generally be seen that ‘talent’ is what separates the two: Andy Warhol is a household name and Gerhard Richter is not, but no one in the art world would claim that Warhol is more talented than Richter.”
Economists have a term for the Koons and Hirst phenomenon; they call it the “superstar effect.” Sherwin Rosen, the economist who first introduced the concept, explains it this way: “Small differences in talent at the top of the distribution will translate into large differences in revenue.”21 But other economists argue that marginal talent is not necessary; just getting more people to pay attention, whether buying one’s artwork or following one’s name in the tabloids, is what generates the superstar effect. From this perspective, superstars are not significantly more talented, but a substitution of someone else would not produce a better consumer experience. Thus, these superstars are able to generate the masses of consumers, fans, and audiences that aggregately reward them much more than everyone else, even others just as good as them. And such superstar effects are getting greater: The economist Alan Krueger found that in 1981 the top 1 percent of artists took in 26 percent of concert revenue. By 2003, the top 1 percent brought in 56 percent.22 Are these few individuals really better than everyone else? Even if they are marginally better (taking into account Rosen’s theory), are they so much better as to deserve 56 percent of concert revenue? Surely not. Robert Frank and Philip Cook call this the “winner-take-all” society. But what might explain why such a phenomenon occurs? One of the most obvious reasons superstars exist is that cultural goods, whether art or film or sports, require buzz and people talking about them and debating them, going to the movies and baseball games together, and getting excited when a particular song is played on the radio. The Princeton sociologist Paul DiMaggio makes the point that people want to consume cultural goods together because sharing interests enables people to make friends, establish taste, and extend their social networks.23 Harvard professor of marketing Anita Elberse corroborates this theory with an empirical analysis of music and home video sales. In her critique of Chris Anderson’s “long tail” (whereby he argued that in the future the market will be filled with niche demands and suppliers rather than blockbusters), Elberse found that while companies like Amazon and Netflix cultivate niche product demand, people are still buying the same movies and books in droves; blockbusters still exist. Why is this? We are social folks, Elberse argues, and we like to consume and form tastes about art, music, and other cultural goods together.24
Part of Koons’s and Hirst’s success lies in certain social phenomena: We like collective experiences, whether showing up at an art opening in a pack or talking about the show at brunch. People tend to get enjoyment out of sharing cultural experiences, which is why everyone listens to Britney Spears and reads Dan Brown—because they can then talk about the experiences with one another. Economists call these relationships “network externalities”: The benefit of consuming something increases with each additional person who also participates.25 Another explanation for the superstar effect is that it enables us to pick a musician to listen to or book to read with relative ease. The reason we don’t go trolling iTunes for another blond pop star to listen to is that Britney Spears is already ranked number one on the chart. There is only a slim chance that the time we would spend looking for a similar type of musician would result in a significantly better musician. Superstars limit our search costs for what to read, watch, listen to, wear, eat, or hang on our walls. Superstars like Hirst and Koons are beneficiaries of the bandwagon effect: We tend to like what everyone else likes and we look for signals that tell us what is “good art” because we are not necessarily sure of our own judgment.26 Even if we love art, most of us don’t have art history degrees or regularly read exhibition reviews. When a collective mass of people are drawn to a particular artist, we tend to assume that we ought to be as well.27
Some art critics have publicly disdained the massive fortunes that Koons and Hirst have made due to the superstar and bandwagon effects. In an editorial about Hirst and the celebrity-driven contemporary art market, Financial Times arts writer Peter Aspden remarked, “If art is nothing more than a reflection of national values, then…what better characterises the 21st century than the lust for celebrity, and the rapid dissemination of triviality?” Aspden went on to point out the similarities between the current art market and the narcissism of the reality TV show X Factor, putting Hirst front and center as emblematic of the problem. As Aspden and other art critics have pointed out, Hirst (and Koons, to be sure) is “more highly regarded for his business accomplishments than his artistic endeavors.”28 Hirst’s business acumen is so admired it has even been the topic of a London Business School course (much to the chagrin of many art critics and aficionados).29
Of course other great artists exist; Koons’s and Hirst’s star power does not imply that they are the only relevant artists of the day. People like Richter and Kara Walker and Brice Marden certainly create excitement, and when they exhibit at a major museum or gallery, lots of people show up. But having a coterie of art-friendly fans and being revered among art experts isn’t the same as having celebrity status with the mainstream public and having the popular press obsess over you for things that transcend your art.30 Art stars are different from artists because they supply personae to their public. They give it up to the camera and the gossip columns with all the ostentatiousness of Paris Hilton or Britney Spears. Quite simply, Koons, just like Hollywood starlets and M, gives us more to work with.
Consider Tracey Emin, the troubled and provocative British artist. Emin’s prominence came only partially out of her talent. In 1997, she was filmed behaving drunk and crazily on a serious Channel 4 program discussing the Turner Prize.31 Then there was her glorious breakup with fellow artist Billy Childish, whose Stuckism art movement was created in opposition to the YBAs like Emin and Hirst. In 1999, Emin herself was short-listed for the Turner Prize. Although she didn’t win, everyone was talking about My Bed, which was featured shortly afterward at the Tate. My Bed was in fact her bed, unmade and littered with old condoms and underwear.
Emin’s signature style is her oversharing of her private life. In My Bed, Everyone I Have Ever Slept With 1963–1995, and My Major Retrospective—to name only a few—she has actively used her personal life to cultivate her art career. And she has succeeded. We are very interested indeed. Despite it being quite literally just her unmade bed, Emin sold My Bed for £150,000 to Charles Saatchi, whom, prior to the sale, she publicly disliked. Saatchi has devoted an entire room in his house to displaying the piece of art, which was widely viewed, like Hirst’s work, to be sold at an inflated price.32 “Charles Saatchi has been called a modern-day Medici,” one art critic observed. “But had he been living in Florence in its heyday he could have bought four versions of Michelangelo’s statue of David for the price he paid for Tracey Emin’s dirty bed—even allowing for inflation since 1499.”33 Emin doesn’t generate the kind of multimillion-dollar sales that Koons does, but she has managed to consistently sell work in the tens and hundreds of thousands of dollars, almost all of which is inextricably linked to her personal life, including I Promise to Love You (a neon heart with those words written in cursive inside) that sold for $200,000 in 2008 and Fantastic to Feel Beautiful Again (another neon cursive scrawl of the title) that sold for $70,000 in 2009. Emin now has a new problem: Her credibility as the vulnerable and poor young girl is challenged by her new life as a rich and successful woman. The documentation of Emin’s new life of flashing camera lights and copious champagne is not nearly as interesting as her early, pre–art star life. “Emin’s celebrity is a problem for her work because it might compromise her authentic primitive self,” the art historian Julian Stallabrass writes, “thus her continued mining of her childhood…thus her neglect of later events.” Emin, however, has a response for those critics who consider her work inauthentic now that she has riches and fame: “People think that because my life has become more comfortable, my work will get insipid, but inside my heart is still in turmoil…I still go to bed crying, I still pray to God for a better life, I still curl up in a small fetal shape…those feelings never change.”34
The Economics of the Celebrity Residual
We see the economic impact of celebrity everywhere: art, sports, Hollywood, music, even politics. As Koons and Hirst demonstrate, the celebrity residual pays real economic dividends to those able to cultivate it. Celebrity clearly does not imply talentless. Quite the contrary. Most stars possess some measure of talent, but no one of them is necessarily more talented than his or her peers. And, after all, how do we define and put a value on talent in such subjective industries? Is Koons really $15 million better than Richter? Is Hirst over $75 million better than Koons? The stars of an industry may be very good, but they are disproportionately economically rewarded because of their celebrity. Talent, in other words, buys you only a seat at the poker table. Celebrities don’t have to win the most Oscars or make the most touchdowns. In all types of industries where there is an element of ambiguity in how to measure talent there is a chance for money to be made on the celebrity residual.
We pay for the celebrity residual everywhere, but to what extent varies dramatically by industry. In sports, no athlete keeps his day job if he is not really good. Aside from skill, however, some athletes are simply able to capture their audience more than others and they are financially rewarded for their ability to drum up ticket sales and sell merchandise. There are many, many soccer players who have statistics as good as if not better than David Beckham, but those players are not stars. This is not to say Beckham isn’t a truly talented player. Anyone who cares about soccer can remember his famous last-minute free kick in a 2001 game in the run-up to the World Cup, and he is known for being a great sportsman, runner-up to the FIFA World Player of the Year award twice. He was also the highest-paid footballer in the world until 2009, getting paid $28 million for the 2003–2004 season.35 And yet in 2007, past his prime, after a horrible season and in what some might call the sunset of his career as a major soccer player, he signed with the LA Galaxy for $250 million, which included endorsements and advertising fees ($50 million in actual salary).36 At the time, Beckham’s salary was larger than all of the other Major League Soccer salaries combined (trailing far behind in second place was Francisco Palencia, who was playing for MLS to the tune of approximately $1 million). Because his contract had an opt-out clause, Beckham left LA Galaxy and went on loan to AC Milan, and in 2009 earned a total of $46 million.37 These days, Beckham makes two to three times more than any other soccer player in the world, besides Lionel Messi of FC Barcelona and Ronaldinho of AC Milan, who make $37.7 million and $25.5 million, respectively. The only other football star associated with such cash is Cristiano Ronaldo, who in 2009 attained the largest football contract in history. Ronaldo is also a celebrity by anyone’s account, with his face splashed across tabloids and an endless gossip column dissection of his wardrobe and dalliances with Paris Hilton.
If stardom and salary were strongly correlated with talent, sports statistics would be a straightforward proxy for income distribution. In terms of soccer stats, the peak of Beckham’s considerable talent is many years behind him. He hasn’t had a big moment on the field since the 2006 World Cup. “Off the field, Beckham’s profile and commercial appeal shows no sign of waning, but on the pitch the past year has seen [him] suffer a series of disappointments,” said a CNN commentator in 2009. “It is a far cry from his glory days at Manchester United where he won four English Premier League titles and the Champions League as they memorably won the treble in 1999.”38
And yet today Beckham is paid pots of money. On the one hand, you could say that he deserves recognition for all of his past effort, but sports is a tough world and nobody gets rewarded just for being a good player three years ago. Sports stars get rewarded for being good players in the present and get benched or dismissed when they drop the ball both literally and figuratively. So it doesn’t make sense that Beckham gets paid so much during a time in his life when he’s not playing as well as he used to.
Or does it? It depends what Beckham is actually getting paid for. Beckham’s salary isn’t simply about goals or last-minute moves; it’s about merchandising and selling seats. When players are bought, their value is measured by both their athletic performance and their ability to bring in spectators. Studying the 2007 season, sports economists found that average MLS ticket sales for games increased from 16,758 to 29,694 when Beckham was on the roster. When Beckham actually played, ticket sales went up to 37,659, demonstrating the influence of Beckham’s presence on game attendance.39 When I ask sports aficionados about the Beckham phenomenon, they always point toward Steven Gerrard, an English footballer who plays midfield (and sometimes second striker) for Liverpool F.C. Gerrard is inarguably a leader in his field and has scooped up awards and championship wins since he arrived on the scene in 1998. To football followers, Gerrard is as good as Beckham was in his prime. He’s just not nearly as celebrated. And at a paltry $11.7 million (though considering such a massive figure paltry may sound ridiculous to the average reader), that lack of celebrity shows.
Since the media has become active in cultivating athletes as stars, economic reward comes from more than just playing the game well. The media gloms on to those who are marginally better and creates a personal narrative around these athletes.40 Beckham’s initial talent drew audiences and media attention, but these are not the things that sustain his celebrity. Most people outside of soccer fandom know Beckham as a model and the husband of Victoria Beckham, aka Posh, former member of the Spice Girls. In recent years, Posh has become a force to be reckoned with in the fashion industry, launching her own clothing line and attaining a coveted front-row seat at Fashion Week. Posh’s high profile adds fodder to Beckham’s star power. Beckham’s celebrity appeal is so great that in 2003, when Manchester United coach (now manager) Alex Ferguson threw a boot that “accidentally” hit Beckham in the face, the story was a bigger headline in Britain than the Iraq War. The story was fueled by Posh, who was supposedly leaking stories to the press, including photos of Beckham’s beautiful face injured by the boot.41
As a former pop star, Posh has every motivation to keep her name in the media, and it has paid off. As Simon Kuper, the sports columnist for the Financial Times put it, “[I was there] when Beckham played for England at the World Cup in Tokyo. Like all World Cups, he played terribly. [And yet] the Japanese were totally obsessed.” Kuper went on to explain that Beckham’s disproportionate appeal is in his star power: He embodies Western glamour, he is fabulously wealthy, and he and his wife sashay around the world with celebrities. Beckham’s whole multidimensional life is interesting. When sports stars’ personal lives make their way into the headlines, whether by accident or by design, it catalyzes a whole new type of stardom and allows these athletes to resonate with a new and larger fan base.
Consider Alex Rodriguez, or A-Rod, as he’s known, one of America’s most celebrated baseball players since Babe Ruth. He is the youngest player ever to hit five hundred home runs, breaking the record set by Jimmie Foxx in 1939. A-Rod is fantastic, and he has been handsomely rewarded for this talent, signing with the New York Yankees in 2007 for $275 million, the largest contract in baseball history.42 The confluence of being a free agent and winning MVP in the same year meant that multiple teams were bidding for A-Rod simultaneously, which of course jacked up the cost of getting him. Several years later, some of those teams might be happy they didn’t win the bidding war. In 2006, his postseason batting average was an unimaginably awful .098 (.300 is considered good). In 2007, A-Rod’s performance put him at just twenty-fifth place on the list of top ballplayers and yet number one in salary by an incredible margin. He has also been dubbed “the cooler” for having a negative impact on team chemistry and performance when he’s around. In 2008, he didn’t make it to the top five for RBIs, home runs, or batting average. A-Rod’s disappointing performance in the “clutch” (the high-stakes critical part of a game or series) is widely debated and criticized. And in 2009, A-Rod admitted he had used banned substances just a few years earlier. In the clubhouse, according to former Yankees manager Joe Torre in The Yankee Years, A-Rod began to be teased as A-Fraud.
This is not to say that A-Rod is a bad ballplayer. Many would argue that despite his mishaps he is still one of the best and generally outperforms other players during the season. But so much better than all the other ballplayers that he deserves the attention and salary that are awarded to him? Is he $86 million better than Yankees player Derek Jeter, who, in 2009, broke the Yankees’ record for number of hits? Jeter’s record (2,722 hits) trumps Lou Gehrig’s record made over sixty years ago. Jeter has led the Yankees to five World Series titles, is captain of the team, and has been on the All-Star team ten times. He is widely considered one of the best ballplayers of his generation and noted for his extreme professionalism.43 Jeter also has a ten-year contract with the Yankees, but his is for $189 million.44 In fact, in 2009, A-Rod’s $275 million contract was worth over $150 million more than over half of the highest contracts ever awarded. His contract was $100 million more than every other baseball contract ever awarded other than to Jeter, newcomer Mark Teixeira (Yankees), and Rodriguez’s previous $252 million contract with the Texas Rangers.
Is A-Rod so good that he deserves to be paid over $100 million more than 99 percent of all other ballplayers?45 If he’s that good, then the Yankees should never lose another game as long as they have him, which as it turns out is not the case. The Yankees had very disappointing seasons from 2004 to 2008, ironically commencing the same year the team acquired A-Rod.46 And while in 2009 A-Rod’s postseason game started picking up in the play-offs as the Yankees went on to win the World Series, his performance was primarily viewed as a welcome departure from his usual tepid postseason.47 But still he could not be considered the dominant force on the Yankees’ field: Every position is filled by an All-Star player (Hideki Matsui won the 2009 MVP award and Mariano Rivera was a close second). I’m no sports economist, but I’ll speculate that as good as A-Rod may be, he’s not talented enough to justify tens of millions of dollars over every other baseball player, particularly if the team isn’t always winning with him on board.
But, like Beckham’s, A-Rod’s contribution isn’t based strictly on talent; it’s based on merchandising, network programming, and ticket sales. On February 16, 2004, when the Yankees announced their acquisition of Rodriguez, the team sold 22,000 tickets, 8,000 more than on an average day. Traffic to the Yankees’ website jumped to 2.5 million hits—that’s five times the number of hits on the same day the year before. That week, Manhattan sports stores reported a deluge of demand for merchandise with Rodriguez’s famous No. 13 emblazoned somewhere on the product.48 Besides the buzz around the Rodriguez trade due to how good he is as a player (what sports economists call “performance value”), Rodriguez has “marquee value”—the value of his persona and celebrity on the baseball team’s revenue. Sports analyst Vince Gennaro estimates that Rodriguez’s marquee value will increase the value of YES Network (Yankees Entertainment and Sports Network, the station that runs Yankees games) by anywhere from $50 to $100 million over just ten years. Gennaro approximates that Rodriguez’s marquee value alone should generate $145 million over the duration of the ballplayer’s contract. Overall, Rodriguez will generate $450 million in “marginal product revenue” or, in simple terms, value to the Yankees franchise.49
Marquee value can be attained only by A-Rod’s fans following him, and his celebrity persona both on the field and off. Eight thousand extra ticket sales can’t be explained entirely by die-hard baseball fans. While A-Rod’s batting average is modest (brought down by his postseason calamities), his Google hits are out of the ballpark.50 It certainly doesn’t hurt that Rodriguez dated Madonna and the actress Kate Hudson. Even though Madonna came after the salary, it was pretty clear early on that Rodriguez had more than just baseball skills; he was able to capture an audience outside baseball and cultivate a collective interest in his persona. In 2009, he had well over five times more Google hits than Jason Giambi, who ranked second by this measure. And if you look at the peaks in A-Rod’s Google hits over time, they do not occur after a good game. From 2004 to 2008, A-Rod’s number one Google hit peak was his divorce, which occurred in the aftermath of his widely speculated upon affair with Madonna (which the New York Post splashed across its front page day after day during that summer). In 2008, the number one search term in Google for Rodriguez other than just his name was “Alex Rodriguez Madonna.”
Despite being less of a leading soccer player these days, Beckham is still one of the most Google-searched sports topics in the world. Gerrard, though actually one of the world’s best footballers, is miles behind Beckham in public interest, which is reflected in his relative lack of Google hits. According to Google Trends, from 2004 to 2009, Gerrard got just 12 percent of the media coverage that Beckham attained.
What, then, are sports teams paying for when they hire Alex Rodriguez or David Beckham?51 Besides sheer talent, teams are paying for the celebrity that increases merchandising and ticket sales. In economic terms, A-Rod’s celebrity residual brings a quantifiable increase in spectators who buy tickets and hot dogs and Bud Light simply because he’s playing. The disproportionate reward system that they benefit from is a product of their enormous fan base. Beckham and A-Rod were celebrities before their high-profile contracts, but the contracts and increased media attention increased their star power, thus begetting even more economic opportunities as they became increasingly celebrated by a wider audience.52
In Hollywood we see the economics of the residual at work even more strongly, particularly because talent is more ambiguously measured. Take a look at Jennifer Aniston and Kate Winslet and how much they get paid versus our best proxy for talent, how many film awards they accrue. Aniston has no Oscars or Oscar nominations, two Golden Globe nominations for films, and no wins. For her 2008 film Marley & Me, Aniston got $8 million up front and she earns about $25 million a year, which includes her endorsements and the enormous amount of back end revenue she attains from box office receipts. Back end means that if Aniston’s films make a lot of money at theaters or in DVD sales, it is written into her contract that she will get a percentage of the profits. For Marley & Me, Aniston pulled in approximately twice her initial salary in back end.53 Contrast Winslet, who at thirty-three became the youngest film actress to be nominated for six Oscars, has won one Oscar, has been nominated for six BAFTA awards and won two of them, and has been nominated for seven Golden Globes and won one in 2009 (admittedly she had the advantage of being nominated twice that year in the same category). While Winslet also gets paid between $6 and $10 million per film, her back end and endorsements are significantly less. In 2009, Aniston was eighth on the Forbes ranking of the most powerful stars (defined as a combination of media and Internet presence and overall earnings). Winslet didn’t even make the top 100. If star power were about talent, Jennifer Aniston would not be getting paid over two and a half times as much as Kate Winslet, with her four major awards to Aniston’s zero. Aniston is not a bad actress, but she is certainly no better than Winslet, and yet she is economically rewarded for something that has clearly nothing to do with pure acting talent. Not to mention, most of her films are almost universally panned by critics.
But in celebrity economics, other stats matter more than film awards: from April 2008 to 2010, Kate Winslet was mentioned 476 times in US Weekly, and since 1998, 230 times overall in People. Aniston, on the other hand, was mentioned more than 1,000 times in US Weekly during that time and more than 1,300 times in People (since 1995). Aniston has been featured on People’s cover 25 times compared to Winslet’s two.54 According to OK! magazine’s former features editor, when Jennifer Aniston graces their cover, the magazine sees a spike in sales of 120,000 copies. In 2008, Aniston was the cover story for four of the top-ten-selling issues of OK!
Winslet burnishes her studio’s reputation by winning awards, but Aniston is the fan favorite as demonstrated by her mentions in the tabloids (five times more than Winslet) and her ability to sell magazines. To be clear, Aniston’s covers aren’t about her latest movies. Aniston is “splitting up with John Mayer,” “dating British hunk,” “secretly texting with Brad.” Aniston’s presence in films brings in audiences simply because they like her, and ultimately that increases a studio’s bottom line. Jennifer Aniston is rewarded for this star power, her residual. Marley & Me (2008) made almost $400 million worldwide in box office receipts. If Aniston is getting back end revenue on $400 million, no matter how small the percentage, that’s a lot of cash. Winslet’s The Reader (2008), despite a cornucopia of film awards and nominations, brought in $135 million. The Reader’s box office receipts are impressive but just a third of what Aniston’s movie brought in. Marley was not a hit with the critics, nor did it possess a profound and emotive story line like The Reader. Unquestionably, the pairing of Aniston with Owen Wilson and the light story line revolving around a cute dog helped make the movie accessible to a wide audience, whereas The Reader’s solemn plot surrounding Nazism and a relationship between an older woman and a teenage boy would be a deterrent to some filmgoers. Not to mention, the book Marley & Me was a runaway best seller, selling millions of copies. But The Reader was hailed as a remarkable movie and Marley was universally panned. This debate is academic: Aniston’s fans in Kansas aren’t swayed by what a New York Times critic says. For them, a movie with their favorite star is enough motivation to go to the cinema on a Friday night, no matter how much it’s lacking Oscar credibility. And at the end of the day, each ticket purchased is what keeps a studio in business. But does Aniston explain the success of Marley & Me? “It’s a matter of much debate,” one film executive explained. “Truth be told, no one’s quite sure if Aniston’s a movie star or not.” One could argue quite easily that movies starring Aniston have flopped as much as they have succeeded. Love Happens made only $22.9 million domestically and Management didn’t even break a million in the domestic box office (Marley & Me made $145 million and The Break-Up made $119 million domestically). The films starring Aniston alone bombed, while those that have been financially successful had top costars (Vince Vaughn in The Break-Up and Wilson in Marley). But as long as Aniston’s influence on a movie’s success remains ambiguous, she can command a high salary.55 As one studio executive explained to me, film stars’ agents often try to up the value of the contract by purporting that the actor’s star power will increase the success of the film. (Studios at least try to remain unconvinced in order to keep the salaries down.)56
If you believe Anita Elberse, a star is worth approximately $3 million in box office revenue. Elberse studied twelve hundred film-casting announcements and observed the influence of new information about a film (e.g., Matt Damon starring in the latest Bourne film or Julia Roberts joining Ocean’s Eleven) on the Hollywood Stock Exchange, an online prediction market that looks at a film’s expected revenue based on casting and financial decisions. Elberse found that the stars’ biggest impact is their ability to draw other stars to act in the film and to drum up financial backing for production. Stars do not, however, increase a studio’s valuation. Stars certainly obtain more value from their paycheck than the studios get in ticket sales. Elberse notes that stars are unable to generate substantial additional film revenue individually; the real revenue generation is produced through hiring a cast of stars. If a studio’s goal is to just increase shareholder value rather than revenue, hiring just “ordinary talent” suffices.57 By just these measures, studios are paying way too much in the belief that the intangible celebrity residual will draw audiences, a mistake often called “the curse of the superstar.”58 “There is insufficient reason to support the hypothesis that stars add more value than they capture,” Elberse concludes.
The Difference Across Industries
There is almost always a celebrity premium that the market is willing to pay, but the balance of how much paid for celebrity versus talent varies depending on the industry. In sports, no one hires a bad ballplayer and keeps him around, no matter how much the tabloids love him. Nick Hornby famously wrote in Fever Pitch, “One of the great things about sport is its cruel clarity: there is no such thing, for example, as a bad one-hundred-metre runner, or a hopeless centre-half who got lucky; in sport, you get found out. Nor is there such a thing as an unknown genius striker starving in a garret somewhere.” As one sports agent put it, baseball players can work the social life of New York and Los Angeles and become local celebrities, but “if on field performance is not spectacular, they will have their fifteen minutes but won’t become international stars.”
As counterintuitive as it may seem, sports and art are birds of a feather, while Hollywood has its own breed of residual economics. Because the individuals in the former two rise from within the community, there is a vetting process such that even though many stars in art and sports attain disproportionate celebrity vis-à-vis their talent, they do not get paid for celebrity without being really talented. We may think art is subjective, but within the art community certain criteria of excellence are set; distinctions and awards highlight those perceived as the most talented.59 As much of a stuntman and prankster that Hirst might be viewed as by his naysayers, he did after all win a Turner Prize. With regard to sports, journalist Simon Kuper explains that despite all the ridicule Beckham faced for being more star than talent, he was still ultimately one of the very good footballers of his generation. He needed the talent to attain the celebrity. “That’s the sine qua non,” as Kuper puts it. “Sports stars have to be good. They wouldn’t have been stars if they hadn’t been good on the field.”
As such, in sports, talent and celebrity (while not on balance) are at least related. Athletes first must pass through the lowly ranks of local teams before they are paid attention to by mainstream fans. Think about the process by which Rodriguez even ended up with the potential to be photographed by the paparazzi and gossiped about on Page Six. Rodriguez has been playing baseball since high school. He then went on to play for the Seattle Mariners from 1996 to 2000. He transferred to the Texas Rangers in 2001 and played with them until 2003. It wasn’t until 2004, when Rodriguez was traded to the New York Yankees and exploded onto the New York social scene, that he was catapulted from very good baseball player Alex Rodriguez to Madonna-dating, stripper-cavorting, wife-divorcing, Kate Hudson–heartbreaking A-Rod. But by this point, Rodriguez had been playing ball for well over a decade. Only after each small move up the food chain did he accrue enough industry credibility to gain a position with the Yankees and for the outside world to take notice.
Art stars, like sports stars, are disproportionately rewarded for their celebrity, but they are still fundamentally created through standards set by the people within their fields. Jeffrey Deitch explained that the art community must support an artist in the first place before that individual has a chance to be relevant to a mainstream public. “[An art star] starts out as something very real,” Deitch remarked. “It is more community based. There is a whole network of respect [within the art community].” Koons, Deitch noted, was long followed in the art world and appraised through the industry’s institutions, from the museums to the galleries to the magazines, before he did an interview with the Financial Times.
But celebrity in Hollywood is different. Hollywood stars can end up being paid entirely for their celebrity residual. The very people the mass public views as stars are often remarkably different from those the industry reveres.60 Stardom and talent are not necessarily mutually exclusive in Hollywood, but one does not beget the other, and a star can draw a steady income based on his or her residual without being perceived as an industry talent. When I talk to people in Hollywood about celebrity, they almost always point to how divorced it is from real talent and from the real stars within the industry. So much of star power in Hollywood is fundamentally about one’s appeal to the media. The increased emphasis on the personae of stars over their talent is a function of the rise in media coverage and the changing nature of subject matter the media reports on. The media sells magazines and TV programs based on whom their audiences are interested in knowing about, regardless of industry vetting standards.
Similarly, in politics, a lifelong senator can toil away at legislation for many decades and still some young brilliant whippersnapper can end up resonating with the public, which in turn makes him the star, or in the case of Barack Obama, the president of the United States. No one would say that Sarah Palin deserved her political celebrity because of all her hard work or astute comprehension of foreign policy. In fact, most believe she attained stardom despite her lack of those attributes. But Palin is attractive and accessible, and the GOP jumped on the bandwagon. Sarah Palin decided to forgo realizing her star power in the political realm and instead cashed in her residual and is laughing her way to the bank, endlessly blabbing on talk shows about her best-selling book that dishes on her experiences on the campaign trail. Palin has reportedly made $12 million since she stepped down from the Alaskan govenorship.61
The economics of the celebrity residual demonstrates that we do pay for more than talent alone; we pay for the persona and the buzz. In this respect, Koons’s and Hirst’s art is probably worth exactly what it goes for on the market, if you include all the things we’re paying for beyond talent. Because these artists have also defined a particular moment in art (like their predecessors Warhol and Duchamp), buying their work is an investment. “The critical question is, ‘Has Koons been influential?’ And the answer is yes,” Galenson explains. “And that is what makes you important in the long run; that’s what makes you a part of the canon.” As the director of the Serpentine remarked, “One goes to exhibitions of artists because they have something to say which is of interest. They are making a contribution that is intriguing in a wide variety of ways, across a whole range of different criteria…You could argue that Hirst’s production and entrepreneurial endeavors were also the very substance of his very talent: The incredible tour de force was an encapsulation of everything that made Damien Hirst who he is.”
“It’s Gotta Be the Shoes”: The Basics of Celebrity Economics
In the beginning, he was just “the kid from North Carolina.” Michael Jordan was good, scoring the winning shot for UNC–Chapel Hill in the 1982 NCAA Championship basketball game. But there were others Nike could have considered to be the face of its basketball merchandise. The talented and larger-than-life personality, Auburn University player Charles Barkley, was a more obvious choice. Jordan, the gangly and subdued shooting guard who, at the time, wasn’t even considered much of a scorer, was just the number three draft pick for the NBA. Why not hire the top draft? Yet, one January afternoon in 1984 at a Nike corporate meeting, that skinny number three draft was announced as the next face of Nike. The mastermind behind the plan, John Paul “Sonny” Vaccaro, put his job on the line, insistent that Jordan was the man, with no real explanation besides instinct, by all accounts.62
The details behind the deal are as follows: Nike desperately wanted to get its foot in the door of basketball merchandise. Because Converse had a monopoly on the big NBA players like Magic Johnson, it would be impossible to break into the market without Nike creating its own stars. The game plan was to get young draft picks to become big endorsers. Of course, this was a gamble: These rookies had no professional experience, the transition from NCAA to NBA is huge, and no one knew if they would successfully make it. But the sports company had no other options if it wanted to create a new market for its merchandise, and it took a gamble on Jordan. It was probably the smartest decision that Nike ever made. The skeptical Nike executives, and even Vaccaro himself, could never have anticipated in 1984 that they would not just create a star but that the star would, within fewer than fifteen years, turn Nike from a $900 million company into a $9.19 billion company.63
Any doubts the executives had were banished pretty quickly. Jordan signed with the Chicago Bulls and was on the cover of Sports Illustrated a little over a month after his NBA career commenced. Later that season he was crowned Rookie of the Year. Throughout his almost twenty-year career, Jordan won five MVPs, fourteen NBA All-Star Game performances, and three MVP All-Star awards, among many other honors and awards. He holds the NBA record for highest scoring average (both regular and playoff season), and he has been on the cover of Sports Illustrated almost fifty times, trumping even Muhammad Ali’s record. By many accounts, Michael Jordan is considered the greatest basketball player of the twentieth century.
Jordan is also the most definitive example of turning a celebrity residual into a concrete lucrative product and, in his case, an actual brand. We know that we pay a premium for the celebrity residual. Often, this payment is affiliated with the star’s actual field: For Aniston, her celebrity is in the form of extra back end on box office receipts. For Koons and Hirst, it’s the price their work sells for as a result of the buzz surrounding them as people. To be clear, Michael Jordan was notably rewarded for his star power on the court; when he returned to the Chicago Bulls in 1996 he was the highest-paid NBA player, earning $30 million a year.64 But the other thing that Jordan’s story demonstrates is that star power can be turned into a commodity. Jordan didn’t just scoop up extra on his paycheck as a result of his celebrity residual; he actually created an entire market of things from endorsements to actual products with the Jordan brand. Jordan recognized that his star power could be applied to products that far transcended basketball. It all started with the now famous Air Jordan basketball sneaker. In stride with Nike’s strategy to build a product line around one player, the company created the shoe in 1985. While it was not aesthetically elegant, it resonated with Jordan’s fans: It was red and black, the colors of the Chicago Bulls. Almost overnight, the shoe became a sensation. When the NBA commissioner banned it because it violated the league’s color codes, the sneaker, and all of the merchandise associated with Jordan, flew off the shelves with even greater velocity. “It was like election night. Like, who’s buying what?” Sonny Vaccaro recalled. “Oh, my God, they sold 100 pair of shoes in Pittsburgh, yesterday. They sold 400 pair of shoes in New York City. That’s the way it was like. An election day count.”65 The frenzy for Jordan’s line at Nike was overwhelming, and the company responded by making more and more of the merchandise, which only fueled more demand. In their first year, Air Jordans sold $130 million worth of shoes for the company. By 1990, Jordan products made $200 million annually for Nike.66 One sports commentator reported that “at one point, there was a run on the world’s supply of red-colored thread.”67 He wasn’t joking. For a moment, there literally wasn’t enough red thread in the world to match demand for Jordan’s Nike product line.
Jordan’s line made Nike’s entry into basketball merchandising an unimaginable success. His clothes still sell, and limited editions of the Air Jordans sell on eBay for $750 (a twenty-pair collection of vintage Air Jordans was being auctioned for $20,000). The obsession with Air Jordans was a magical brew of Jordan’s phenomenal on-court performance and Nike’s aggressive marketing to portray the shoe as cool. In one famous Nike commercial, film director Spike Lee explains Jordan’s talent by simply saying, “It’s gotta be the shoes.”
Jordan didn’t stop with Nike. He endorsed numerous products, from Wheaties to Gatorade to McDonald’s.68 By one estimate, in 1993, Jordan was making more than $32 million in product endorsements.69 In fact, when the media announced that Jordan would return to the NBA in 1995 after a two-year hiatus, one study measured that his homecoming amounted to a $1 billion impact on the market. McDonald’s alone gained $192 million in sales from Jordan’s announcement. As the researchers concluded, “At an average price of $3 for a Value Meal, this $192 million in incremental sales translates into about 64 million additional Value Meal sales.”70 All in all, during his basketball career, Michael Jordan generated almost $10 billion for the world economy.71
He has been called “Air Jordan” and “His Airness,” but Michael Jordan should also be called one of the savviest businessmen on the planet. He employed a three-pronged strategy that is fundamental to celebrity economics: He was paid on the court for both his talent and his ability to sell tickets; he used his star power to endorse multiple companies that would pay him millions to associate with their products; and finally, he took his celebrity and made his own products: cologne, steakhouses, and of course his signature Nike line.
How to Be “The Face of…”
Once upon a time, celebrities were a product of the Hollywood studio system or a sports franchise, in the sense that they would draw crowds to their movies (or games) and readership to their magazine interviews. But celebrities still had a finite number of revenue streams. Now, however, there are lots of options for increasing celebrity and revenue.
The beginning of this chapter examined the first strategy: how the celebrity residual enables some individuals to be paid more for doing the same thing as others like them (whether that’s playing basketball, selling art, or acting). But endorsements and celebrity brands enable stars to actually build a market for themselves outside their field. Many celebrities, if they can keep their image intact, can do endorsements. Jordan, by virtue of being an enormous star, was given the opportunity to do many, many endorsements. Marketing executives call this “borrowed equity”: The star’s value to his public (read: his celebrity residual) can be transferred over to whatever product he claims to use. It is estimated that at least a quarter of all U.S. ads involve a celebrity endorsement.72 And it’s no surprise: Bringing in a celebrity to represent a product can mean enormous additional revenue for the company. In 1997, PepsiCo attributed its 2 percent rise in market share to signing on the Spice Girls to do ads.73 That may seem like a small percentage, but a 2 percent increase in the global market share of soft drinks is millions upon millions of dollars.
As a function of their global megastardom, some celebrities are able to penetrate markets far away from their immediate base, even breaking into non-Western markets. But these stars are few and far between. At any given time in the world, there may be a handful of individuals whose celebrity status is that far-reaching. These stars are usually major athletes (European football and American baseball) or Hollywood actors, particularly those who have been in action films.74 Doing ads abroad is a clever means of making money without U.S. or U.K. brand dilution. Most people in the United States have no way of knowing that Brad Pitt advertised coffee in Japan (he did) or Madonna endorsed liquor there (she did).
However, it’s a popular misconception that breaking into the U.S. market means a star can automatically show up in a Chinese living room during TV hour. Most stars are not interesting to people outside of their immediate market. Just like American slapstick comedy doesn’t sell well in France (barring rare exceptions like Woody Allen and Jerry Lewis), most foreign markets are interested in their own celebrities and not the girls starring in U.S. reality TV shows. The relative nature of even mainstream stars means that most stars have a limited (but profitable) opportunity to be domestic endorsers but are unlikely to reach an Asian consumer base. As one marketing executive put it, “Many Chinese do not know who Jude Law is, and he is not the type of guy Chinese males aspire to.”75 China, Japan, and South Korea do tend to feature celebrities in advertisements (up to 50 percent of all commercials in China feature a star); however, most of them are homegrown.76
Celebrity as Brand
Recently, I was at the West Hollywood Target store stocking up on various unnecessary necessities. I was heading toward cosmetics and then on to the diet soda aisle when I spied a wardrobe item worthy of purchase: the Hannah Montana sweatshirt. This purple fitted number, with a hint of being more a crop top than proper outerwear, had Hannah Montana written in cursive all over it. I had to have it. There was the minor problem that I had found it in the children’s section, which resulted in me frantically rummaging like a bag lady through the few remaining sweatshirts hanging up, looking for the largest child size (“fits 10–12 year olds”).
As the star character of an eponymous Emmy-nominated Disney show, Hannah Montana is a normal girl by day, rock star by night. Montana is played by Miley Cyrus (the daughter of nineties country music sensation Billy Ray Cyrus). Using both her fictional and real identities, Cyrus produces music, movies, and a clothing line, all of which have been breathtakingly successful with the tween and teen set: she has top ten music singles, has sold millions of albums, and has starred in several movies. She also has the Hannah Montana line of hand cream, shower gel, and 2-in-1 shampoo, not to mention the Hannah Montana Disney clothing line, which she helped design. In collaboration with couture designer Max Azria, Cyrus designed a line for Wal-Mart.77 In 2008, at sixteen years old, Cyrus’s estimated worth was pegged at $25 million.78
Miley Cyrus demonstrates the most profitable element of celebrity economics: the translation of celebrity into products directly branded with the star’s name. Unlike endorsements, whereby stars simply say they like a particular lip gloss or breakfast cereal or sneaker, brand creation allows stars to make products based solely on their identity.79 Again, being a star is a basic criterion for this strategy to succeed. Michael Jordan did this many times over. The supermodel Kate Moss signed a £3 million deal with the retailer Topshop to design her own line.80 Victoria Beckham shed her Posh Spice persona and started a highly praised clothing line, the Victoria Beckham Collection. But the ability of these stars to commodify their celebrity does not rest solely on the decision to design clothing or sell shampoo. Being a star is necessary, but the translation of stardom into product popularity is far more complicated.
If anyone knows how to create a link between star and product, it’s Charles Garland. Garland is a media mogul who developed Britain’s Pop Idol (which turned into The X Factor) and America’s So You Think You Can Dance, and built up 19 Entertainment with Simon Fuller, which was eventually sold to CKX for £100 million. Currently the head of Crystal Entertainment, Garland has advised celebrities from the Beckhams to Madonna on how to manage their brand and create a market for products affiliated with them. Garland maintains that the only way stars can build brands is if consumers actually believe in what they are producing. “If you are coherent and consistent, then your brand is quite powerful,” he says. Stars should develop a “multiplatform message.”
If you’re Miley Cyrus, those platforms consist of clothes, beauty products, even stationery. Part of creating a successful brand is determining what audiences most admire about the celebrity. “[You] can’t make something from nothing,” Garland explained. If you’re Miley Cyrus, that something is being accessibly pretty and fashionable and having great hair; all of her products align with her persona. Madonna was once a major musician who could make pots of money on her albums, but her music sales are down. In order to continue to make money, she needs to find another aspect of her identity that can be commodified. (Though with hundreds of millions in the bank, she could stop at any time.) That natural next step could be, Garland suggests, capitalizing on her seemingly eternal youth. What better way to monetize her appearance than to open up fitness clubs or create a line of skin care products? In other words, we buy celebrity products if they are plausible extensions of the stars. If those products allow us to be more like them, the stars and the products are all the more successful. Kate Moss got her gig with Topshop not because she’s a supermodel, but because she’s one of the greatest style icons of the last hundred years. If she designs clothes, those who buy them hope that a little bit of Moss’s magic chic will rub off on them.
The Failure of Celebrity Brands
What we wouldn’t buy is Madonna Cupcakes or Kate Moss Organic Veggies. Madonna is known for her draconian fitness regime and diet. Kate Moss is regularly spotted emerging from nightclubs in the wee hours of the morning, a far cry from a poster child for healthy living. If stars push products that are unconnected to our sense of them as people, they are not likely to succeed.81 Stars must operate under the principle of what marketers call “matchup” we have to believe they use the product they are endorsing or have created, and we have to believe that they have the taste to choose the best products.
If you’re a megastar, the means to wealth through branding and endorsements seems fairly straightforward. But of course on a not so infrequent basis, executives make bad decisions or stars flop gloriously in their entrepreneurial endeavors. How could that be? A lot of research has been undertaken on this phenomenon, because if marketing executives could figure out how celebrity brands fail, they would never hire a star without economic potential again, or match the wrong star to a product. Paris Hilton’s watch collection (which you are unlikely to be aware of) or Lindsay Lohan’s attempt to be creative director at the fashion company Ungaro (which was such a disaster that she was nearly in tears as she took her postshow walk down the runway)82 are just two examples of the market failure of celebrity brands. Ringo Starr couldn’t sell wine coolers for Sun Country Classic.83 John Wayne couldn’t sell Datril, a painkiller. Some endorsement failures can be explained by what I’ve just discussed: If we don’t believe them, we won’t buy their products. “[John] Wayne had nothing to do with the product, and sales of the analgesic languished,” remarked one marketing scholar, “a classic mismatch…between star and product.”84 “Consumers are not stupid,” Garland summarized. “They won’t be bluffed.”
But star products and endorsements also fail because a star is doing too many of them. Consumers reach a critical tipping point of oversaturation. In multiple academic studies, researchers have concluded that if a star endorses more than four products at the same time, his or her credibility as someone to trust in influencing buying choices declines dramatically.85 Consumers feel that these multiendorsing stars lack expertise (how could they be experts in everything?) and they are likely endorsing only for the paycheck (which is probably accurate). Oversaturation results in consumers having negative associations with both the star and the product itself.
There is a final way a celebrity brand can fail. There’s no delicate way to put it: When O. J. Simpson was accused of murdering his wife, Hertz had a huge problem. Simpson was, at the time, the spokesman for the car company and it wasn’t such a leap to assume that potential renters would not be positively disposed toward a man whose only possible chance of innocence hung on the fact that a leather glove didn’t fit. Hertz quickly ended the contract. The “O.J. risk,” as it has been called in some advertising circles, has catalyzed companies to put in a “good behavior” clause in contracts in case a star acts in a way that could harm the brand. When Kate Moss was caught on camera snorting cocaine, companies from Chanel to Burberry dropped her unceremoniously for fear that her druggie lifestyle would be a liability to their brand. (When it turned out that the scandal increased her iconic status and profile, they rehired her.)
In November 2009, world-renowned golfer Tiger Woods was involved in a mysterious car accident mere feet away from his home in Florida, and his wife, golf club in hand, had smashed one of the car’s windows. It emerged that the accident occurred after the two had an argument about Woods’s supposed infidelities, and in the following weeks, Woods, the highest-paid athlete and celebrity endorser of all time, was found to have had more than a dozen extramarital affairs including a porn star, a pancake waitress, and a lingerie model. While Nike stood by their man (likely with great hopes that the scandal would just go away and the company could continue to make money on the Woods brand), the stories were too breathtakingly deviant for most of Woods’s clean-cut brands to handle. “When the National Enquirer catches Tiger Woods philandering and his furious wife pursues him down his driveway…causing him to crash his Cadillac Escalade, it isn’t just a big newsbreak: it is an oilstrike,” wrote John Cassidy in the New Yorker.86 From a consulting firm (Accenture) to sports drinks (Gatorade), endorsements dropped like flies. Prior to the scandal, Woods’s lifetime endorsement deals were approximated at $6 billion. Since the revelations surrounding his personal life, Woods’s management company, IMG, has lost $4.6 million in fees. It is estimated that Woods has lost between $23 million and $30 million since the scandal broke.87 “The problem isn’t a question of morals, exactly,” James Surowiecki writes. “It’s that a huge gap has opened up between Woods’s advertising persona and his public image.”88
Celebrity, a seemingly intangible quality, translates into real money and lots of it. And while it’s not economically irrational that stars get paid more than nonstars, what’s fascinating is that stars get paid that much more. Economists call this phenomenon “winner-take-all” or the “superstar” model of income distribution. Quite simply, the people at the top reap all the rewards. We see this principle operate across politics, art, music, and so forth. When Britney Spears’s song hits number one, more people listen to it because it is number one, which perpetuates its position. She’s then a big enough star to start her own perfume line. Those with a large celebrity residual produce real profit for all entities involved. The way they cash in may be different, the way the various industries reward this residual slightly different, but it comes down to the same thing: Ultimately, the economics of the celebrity residual exist everywhere.