Behind the Credit Card Wars to Ink Deals With Artists Including Beyonce and Sam Smith

Illustration by Jungyeon Roh

On Nov. 24, Bleachers frontman Jack Antonoff took center stage with an on-camera appearance in a new 30-second commercial for JPMorgan Chase. The spot -- the bank's first TV campaign in support of Apple Pay -- came complete with a performance of the band's current single, "Rollercoaster," and provided a crucial exposure bump, with the media spend potentially totaling as much as $20 million through the end of 2014. But for Antonoff, the price included having to walk away from a previously signed brand deal with one of Chase's core competitors, American Express, which tapped Bleachers to be one of a planned four acts to launch its Artists in Residence talent program. The cost to AmEx? Having to scrap at the last minute a completed online concert from Bleachers, several behind-the-scenes mini-documentaries and planned advertising featuring Antonoff.

With the sting of a speed-dating round, such a scenario is awkward for artists and brands alike, but it has become increasingly commonplace. Financial-services companies like AmEx, Citibank, Chase and MasterCard have unseated Coca-Cola, Pepsi and Anheuser-Busch to become the most active brands in the music industry, helping fund everything from cardmember presales to upcoming tours to VIP experiences with fans to multi­million-dollar endorsements and ad campaigns that can draw attention to artists’ timely projects and new music.

That's key for Antonoff and Bleachers, who have garnered favorable press but have yet to set radio ablaze with their synth-laden odes to ’80s rock. Even AmEx can’t begrudge Chase for outbidding its initial offer, as a representative tells Billboard in a statement: "While we were excited at the prospect of partnering with Bleachers, ultimately it did not work out. They are incredibly talented and we wish them the best of luck." (Antonoff declined comment through a rep.)

Still, credit card companies are placing their bets earlier -- and higher -- in hopes of earning artist loyalty for years to come. AmEx teamed with Taylor Swift in 2010 for marketing and presales on her Fearless Tour, and has continued to reap rewards by being the exclusive global presale partner for her 1989 stadium tour, which has already sold more than 240,000 tickets to AmEx cardholders (and also funded her "Blank Space" video). The company, which doesn’t pay artists directly for such deals, has high hopes that Sam Smith will be its next superstar: AmEx has exclusive presale rights for Smith’s 2015 U.S. arena tour.

Citi, meanwhile, remains the category leader, with cardmember access to 70 of 2014’s top 100 tours (One Direction, Katy Perry and Lady Gaga among them) and a 16 percent increase in spending on entertainment versus full-year 2013. Upcoming tours include Foo Fighters, 5 Seconds of Summer and Florida Georgia Line.

"In the last couple of years artists have become quite aware that their labels' power is limited," says one executive who has been involved with multiple financial-services deals. "Many artists will enter deals not even looking for cash -- they believe the marketing will give them 10 or 20 percent of sales right out the gate."

Though cash is sometimes on the table -- usually for formal endorsement deals and private, cardmember-only gigs -- the appeal of these deals lies in the wide reach of the respective companies' marketing databases. According to data provided to Billboard earlier this year, Chase has 50 million U.S. card-holders, while AmEx has 53.5 million U.S. cards in force and Citi has 55 million. Plus, credit card-holders tend to spend more money on entertainment, so tours with ticket prices in excess of $300 are more likely to sell to that premium customer.

With so much increased competition, perhaps that’s why Chase marketing executive Steve Pamon is opting to sit out most of the artist-specific negotiations -- current Bleachers campaign notwithstanding -- and instead is focusing on the bank's 10-year sponsorship of New York's Madison Square Garden and its sister venues. "I don’t think we necessarily want to race for volume," says Pamon, who also won the credit-card rights to Jay Z and Beyoncé's On the Run Tour for a reported $5 million. "Venues are our most powerful relationships. If you think about where people go to see music, it’s more of a quality versus quantity story for us."

This article first appeared in the Dec. 13 issue of Billboard.