How Channing Tatum turned Magic Mike into a $180m side hustle

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

The crowd at the January 25 premiere of Magic Mike’s Last Dance included director Steven Soderbergh, orange-haired drag queens, and actress Salma Hayek, resplendent in a black bikini covered with a fishnet dress. She’s Tatum’s co-star in the film, the third installment of the stripper movie series that hits theatres on Friday.

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’s also a key part of a pitch from Tatum and his business partners who 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 $US125 million ($180 million) worth of tickets to its live shows. The partners say that in the era of entertainment companies squeezing every last dime out of intellectual property through spinoffs, branded merchandise and theme-park rides, they have a special skill at putting together unforgettable live events.

“We love making movies, we love making TV shows, but there is something about live entertainment that is just visceral,” Kiernan said in an interview.

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.

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However, in 2010 Tatum, then an up-and-coming actor that had gained some prominence from the dance film Step Up, 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 put his own money into it, alongside Tatum. Carolin quickly wrote a script and they eventually got Warner Bros. to distribute it.

The 2012 film, Magic Mike, was a surprising success, grossing $US167 million globally against a $US7 million budget. That led to a sequel, Magic Mike XXL, which cost $US14 million to make and took in $US123 million in theaters after its release in 2015.