Courted by some of the most powerful forces in the music industry, the Rolling Stones have finally been nabbed by a Virgin. After considering offers from Japanese-owned Sony Music and Dutch-based PolyGram Records, the Stones instead signed a landmark contract worth an estimated $44 million with Britain's Virgin Music Group in November.
"The most memorable part of signing the Rolling Stones was the hangover I had the day after," said Virgin chairman Richard Branson, who celebrated the closing of the deal with members of the band and their advisers at London's posh Mosimann's dining club until the earlymorning hours. "Having decided that Virgin was the place to be, [they] only had one serious negotiation with us, and we felt that what they asked for was very reasonable."
Mick Jagger, Keith Richards and Charlie Watts were the only band members to sign the new contract. Bill Wyman, who consented to the deal and will share in all catalog payments, is rumored to be leaving the band. He is currently working on a solo project, although he is apparently free to sign the contract if he wishes. Ron Wood, who joined the Stones in 1975, is said to be barred from signing the band's recording agreements.
Following Aerosmith's estimated $37 million Columbia agreement in August and Mötley Crüe's reported $35 million Elektra re-signing in September, the Stones' pact marks the biggest contractual bonanza for a rock band (Michael Jackson's estimated $65 million contract with Sony is the biggest recording deal for a single performer). Although most of the money will be paid to the Stones over a six-year period, it is believed that Branson advanced between $5 million and $10 million as a signing bonus.
Branson would not discuss specific financial terms except to say that the agreement kicks into gear in 1993, when the Stones turn over the first of three new albums, as well as the rights to their post1970 catalog. The band will reportedly receive an $8 million advance for each new album, earning a hefty twenty-five-percent royalty rate on each copy sold. Catalog payments totaling $20 million will be dispensed for fifteen albums ranging from Sticky Fingers to last year's live Flashpoint. The new contract also allows Virgin to release a box-set retrospective.
"The figures are not for publication, although they are less than most papers have stated," says Branson. "But I'm confident the band will earn much more over the next ten years. Between new studio albums and backcatalog sales in old and new formats, we have a lot of material." Virgin most likely also intends to use the Stones' music as software for new technologies, including digital compact cassettes and possibly CD-Video.
The Virgin deal, however, is primarily an audio-only agreement, and the Stones will explore separate deals for their large visual library, which includes the rarely seen documentary Cocksucker Blues. Jagger is also said to be seeking a new label to relaunch his solo career after two albums for the Stones' last label, Columbia.
The blockbuster deal – negotiated by Stones adviser Prince Rupert Loewenstein, along with attorneys John Branca and Richard Leher – comes at a time when the record industry is in the doldrums and Virgin itself is said to be on the block. Although Branson denied sale rumors, several firms, including Britain's Thorn EMI and Japanese-owned MCA, are said to be mulling a Virgin buy.
Sources say that Richards, who is signed to Virgin as a solo artist, was a key influence in the decision. "[He] was our trump card," says Branson. Virgin – which last year acquired Janet Jackson's upcoming albums in a deal whose potential worth may be as much as $50 million – is "not actively seeking" other superstars for its roster, according to the chairman of the label. Of course, adds Branson, "if Dire Straits were to give me a ring, I'd definitely take the call – even if it were collect."
This story is from the January 9th, 1992 issue of Rolling Stone.