How Channing Tatum turned Magic Mike into a $166 million empire

MIAMI – In a giant party tent on an island near downtown Miami, American actor Channing Tatum threw pink dollar bills at a shirtless male dancer.

The crowd at the Jan 25 premiere of Magic Mike’s Last Dance included director Steven Soderbergh, orange-haired drag queens and actress Salma Hayek Pinault, resplendent in a black bikini covered with a fishnet dress. She is Tatum’s co-star in the film, the third instalment of the stripper movie series showing in Singapore cinemas.

While the Miami venue that houses the Magic Mike Live show is regularly awash with fake money, it represents a very real cash-generating business.

The production, which features male dancers bumping and grinding before audiences that typically include a fair number of bachelorette parties, now includes permanent residencies in London and Las Vegas.

It is also a key part of a pitch from Tatum, 42, and his business partners. They are looking to raise money for their company, which plans touring shows and other events tied to his film work.

Free Association, the company co-owned by Tatum, his writing partner Reid Carolin and former manager Peter Kiernan, has already sold about US$125 million (S$166 million) worth of tickets to its live shows. The partners say that in the era of entertainment companies squeezing every last cent out of intellectual property through spin-offs, branded merchandise and theme park rides, they have a special skill at putting together unforgettable live events.

Mr Kiernan said: “We love making movies. We love making television shows, but there is something about live entertainment that is just visceral.”

The success of the stage show – and the Magic Mike brand in general – is an unusual Hollywood story.

With theatres struggling and the traditional home video market all but dried up, studios have been wary of ploughing money into new, commercially untested film ideas.

Stars, meanwhile, are often warned the most foolish thing they can do is put their own money into their projects.

However, in 2010, Tatum, then an up-and-coming actor who had gained some prominence from the dance film, Step Up (2006), started speaking publicly about his ambition to put his real-life background story as a stripper on the big screen.

He convinced Soderbergh to not just join the project, but also put his own money into it, alongside Tatum.

Mr Carolin quickly wrote a script and they eventually got Warner Bros to distribute it.

The 2012 film, Magic Mike, was a surprising success, grossing US$167 million globally against a US$7 million budget. That led to a 2015 sequel, Magic Mike XXL, which cost US$14 million to make and took in US$123 million.

Soon, the team was discussing creating a real-life version of the film, to begin the lucrative process of franchise-building.

Finding the structure of Broadway shows too rigid, Tatum, Mr Carolin and Mr Kiernan pitched the idea to venues in Las Vegas.

Eventually, they raised US$8 million – including some of their own money – and opened in 2017. Seats for the show, which now runs five nights a week at the Sahara, start at US$49 each.

Magic Mike Live expanded to venues in London and Berlin, and the team came up with the concept of a tented theatre they could pack up and move on the road. Life imitating art became art again, as the third film focuses on the efforts of Tatum’s character to put on a live show at a theatre in London.

Last Dance was initially headed for a streaming debut on HBO Max, particularly as the dark days of the pandemic made theatre visits seem risky.

But Warner Bros changed course, choosing to release it in cinemas instead. The film is expected to take in US$16 million in its opening weekend and US$38 million in its domestic run, according to Box Office Pro estimates.

Tatum is not giving up his day job. Free Association worked with Amazon.com Inc’s Metro-Goldwyn-Mayer to distribute his 2022 movie, Dog, about a veteran taking a road trip with his pet. It made about US$85 million in theatres.

The movie came out of a partnership with Atwater Capital which, in 2019, signed a US$2 million, four-year deal with Free Association to develop new films.

“Our partnership with Free Association was never about endless volume growth and churning out more and more content,” said Ms Vania Schlogel, a managing partner at Atwater. “If one looks at how Free Association has been a steward of the Magic Mike intellectual property, this is a single property that has expanded under its stewardship from one film to three films, a global live events platform and a reality television show.”

Still, Tatum and his partners have an affinity for the stage. They are planning to open a new show based on Step Up, which will include a dance academy for kids. It is expected to debut in 2023. Free Association is also mulling a live show based on a Tatum-authored children’s books, Sparkella.

The company is working with London and Los Angeles-based ACF Investment Bank to find a new creative talent that has an idea for a live show. Not every genre will work, but they say comedy, or even superhero-based films, could. They want the artist to have an equity stake.

“If a creator wants to do something different, maybe a little left of centre, maybe a little bit weird, we kind of want to create a home for them,” Mr Kiernan said. BLOOMBERG