Lady Gaga's About to Make $1 Million a Day in Vegas

When Lady Gaga’s much-anticipated residency at MGM Grand Las Vegas kicks off Dec. 28, she will play to a nearly sold-out theater of 5,200 seats where fans have paid somewhere between $54 and $5,950 for each ticket. She’s expected to take home just over $1 million that night, according to Variety — and possibly every night of the 74-show stint over the next two years.

It’s a number so high — more than twice what Britney Spears reportedly brought in from her 2017 residency, and double the $500,000 reigning Vegas queen Celine Dion reportedly makes for each performance of her seven-year Caesars residency — that it gives many familiar with the economics of such shows pause.

“These shows don’t become profitable until they hit 70-75% occupancy,” said one industry insider on a condition of anonymity. “I haven’t looked into the pricing on [Lady Gaga’s] tickets, but I can tell you the economics of that room, 5,000 seats and change. In my mind, it’s hard to pay more than $750,000 as a guarantee.” See, there’s a sum that a headliner is guaranteed (a number often speculated on but rarely revealed), and what they actually take home, which can be more. The $1 million Lady Gaga will reportedly earn is supposedly a guarantee, but neither Gaga nor MGM has confirmed. “It’s not that she couldn’t make $1 million if the shows are sold out, but the artist guarantees for rooms of about 4,000 to 5,000 seats are [usually] in the $300,000 to $750,000 range.”

Even if it’s an optimistic number, the fact that Lady Gaga, a pop star in the height of her career and whose last 49-show tour grossed $95 million, has chosen Las Vegas illustrates just how far the residency has come. From the 1970s to early-2000s, Las Vegas became a place where aged acts like Wayne Newton, Donny and Marie Osmond, and Barry Manilow went to retire, riding out the twilights of their careers before white-haired audiences on a timeout from the slots. Cher once described it as rather depressing.

“[The people in the audience were] very, very old. And sometimes they had walkers, and sometimes they had oxygen masks,” Cher told talk-show host Graham Norton of the rooms she played in Vegas. “It took me a long time to realize that it may be the last concert they ever see. And at least they’re enjoying it their own way — even if it wasn’t making me happy.”

But Celine Dion changed all that in 2003 with her first residency, “A New Day,” at the Caesars Palace Colosseum, a $95 million venue that was built specifically for her show. With pyrotechnics, Cirque du Soleil-style theatrics, and 70 backup dancers and musicians, “A New Day” turned the residency into a Vegas must-see. By the time it ended in 2007, Dion had performed 717 shows to 2.8 million fans and grossed $385 million, putting that show in the illustrious company of the 10 all-time highest grossing tours, though it doesn’t actually make the cut, because it’s not a tour at all. That earning power is doubly impressive considering Vegas rooms typically hold smaller crowds (2,000 to 6,000 people) than than the stadiums that tours travel through, which pack in tens of thousands a night.

Dion’s success allowed the Vegas residency to go from lounge act to legitimate career move. While artist guarantees are typically lower than what they’re promised for tours (the same anonymous source explains the lack of travel is factored into artist cuts), headliners began to view the fixed schedule and location as a way to “tour” without the hassle of actually touring.

By the time Shania Twain began her two-year run at Caesars Palace in 2012, shows opened with massive publicity stunts. She kicked off hers by riding into town on a horse, with 39 others stampeding along, and “Man, I Feel Like a Woman” blasting on The Strip. The following year, Britney Spears upped the ante when she arrived to her residency by helicopter, touching down in Nevada’s Mojave Desert at sunrise while more than 1,300 of her adoring fans danced to “Baby One More Time” in pigtails, knee socks, and plaid mini skirts.

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Spears’ residency, which ended New Year’s Eve 2017, grossed $138 million in its 248-show run and filled just under 1 million seats. Her take-home per show was initially reported at $310,000 but was later upped to $475,000 due to high ticket sales, according to the Las Vegas Sun. These numbers were no doubt buoyed by Las Vegas’ post-recession recovery: a record 42.9 million people visited the city in 2016 after a major slump (perhaps the recovery was buoyed by Britney!). Her success proved, once again, that Vegas was no longer the place acts went to die In fact, it was a place where they could be reborn.

“When Britney did her residency, it was a big moment for people to think about residencies in a new way,” says Jon Gray, VP and GM at Palms Casino Resort, which just wrapped up a Blink-182 residency and will host Lady Antebellum and Billy Idol in 2019. He compares her run to the Backstreet Boys’ in its ability to renew her image. “The Backstreet Boys’ residency really kind of revitalized their brand.”

For stars who are also moms, like Spears, and Gwen Stefani, who’s been putting on a “Just a Girl” review at Planet Hollywood since June, the stability of doing one show, in one room, in one town, for months or even years at a time can mean a great deal. Of course, Spears has signed on for another slew of dates at MGM’s Park Theater in 2019, the same venue where Lady Gaga will be stationed beginning just after Christmas. (When Spears’ residency begins in February, they’ll be more or less switching off months through summer — so plan your Vegas getaways accordingly).

As headliners go from nostalgia acts like Britney Spears and Mariah Carey to more in-their-prime stars like Lady Antebellum, Lady Gaga, and Bruno Mars, who concluded an 11-show, 10-month run at the MGM Park Theater in July, the Vegas residency enters a new phase.

Gray gives Jennifer Lopez much credit for this evolution. “Prior to J.Lo, residencies had been all folks who had previous great hits and not really a lot of new music coming out, but J.Lo still had music coming out when she did her residency.” During her run from 2016 to 2018, Lopez released singles from her yet-to-be-released album Por Primera Vez and other one-offs, like the single “Dinero” she made with Cardi B and DJ Khaled.

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As with so many things, this directional shift can largely be explained by the discerning taste of millennials. Studies have shown they are less likely to gamble than older generations and prefer spending their money on experiences rather than things. While this does not solely explain the rise of residencies, it has incentivized Las Vegas properties to find new ways to woo younger clientele. There’s no way Lady Gaga’s show sold out to a room full of white hair and walkers.

Seth Yudof, CEO of UD Factory, which produces residencies like I Love the ‘90s, CeeLo Green, and Richard Marx, sees this as Vegas’ former glory coming back. “It’s important to acknowledge that Vegas was actually born a city where original music came from, and up-and-coming and current celebrities performed, before it became a place where artists went for the twilight of their careers,” he says. “I think it’s really starting to return to where Vegas was.”

Palms VP Jon Gray adds: “Every decade or so, Vegas reinvents itself, and there hasn’t been a lot of reinvention in the last 10 years.” Now, he says, Vegas is moving in a direction where properties like the Palms offer a 360-degree experience where guests would spend their entire time inside the walls of one resort.

That’s a tall order, but with headliners like Britney, Gaga, and Gwen on the menu, it’s one millennials just might place.

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