Mystery solved.
When country music icon Garth Brooks showed up to sing at the annual Wal-Mart (NYSE:WMT) shareholders' meeting in June, wearing the retailer's trademark blue vest and declaring, "It's great to work for Wal-Mart," few knew quite what to make of his statement. On Friday, the company drew back the curtain on this mystery -- it has signed Brooks to a deal granting Wal-Mart, Walmart.com, and Sam's Club the exclusive right to sell his music.
Brooks retired from the singing scene four years ago to spend more time with his family, and he intends to keep things that way until his kids are out of school. But the Stetson-clad country crooner has built up a big enough collection of popular music that he still sells as many as 300,000 previously released albums a year, without doing a lick of new work.
Judging from the prices listed on Wal-Mart's website, that should translate into somewhere between $3.3 million and $4.2 million in guaranteed revenues over the life of the contract, the terms of which have not been disclosed. That's not even a drop in the bucket of the company's $290 billion in annual sales, but it is a drop that won't be going into the buckets of rival discount music purveyors, including Target (NYSE:TGT), Sears Holdings (NASDAQ:SHLD), Amazon.com (NASDAQ:AMZN), and Best Buy (NYSE:BBY).
Of those Wal-Mart rivals, at least Best Buy cannot really complain about the deal. The big-box consumer electronics retailer arguably started this exclusivity war in 2003, when the company persuaded The Rolling Stones to grant it an exclusive deal to sell the group's Four Flicks DVD. Other companies were quick to join the game: Rob Thomas signed up with Target, and Alanis Morissette and Bob Dylan are releasing works exclusively at Starbucks (NASDAQ:SBUX).
Wal-Mart, however, has upped the ante with the Brooks deal, effectively making its various points of sale the only places where anyone will be able to buy any of Brooks' work in the future. Depending on how well Brooks' popularity holds up as his retirement wears on, Wal-Mart -- famed for offering "Always Low Prices" -- might even be able to charge a premium for its new monopoly wares, all the while ensuring that competitors cannot undercut its price.
Does anyone else hear the thunder rolling?
Fool contributor Rich Smith does not own shares of any company named above. Amazon.com and Best Buy are, however, recommendations of Motley Fool Stock Advisor .
