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, 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 theaters 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 $125 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 theaters struggling and the traditional home-video market all but dried up, studios have been wary of plowing 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 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 $167 million globally against a $7 million budget. That led to a sequel, Magic Mike XXL, which cost $14 million to make and took in $123 million in theaters after its release in 2015.

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, Carolin and Kiernan pitched the idea to venues in Las Vegas. Eventually they raised $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 $49 each. 

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

Last Dance was initially headed for a streaming debut on HBO Max, particularly as the dark days of the pandemic made theater visits seem risky. But Warner Bros. changed course, choosing to release it in cinemas instead. The film is expected to take in $16 million in its opening weekend and $38 million in its domestic run, according to Box Office Pro estimates.

Tatum isn’t 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 $85 million in theaters.

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

“Our partnership with FA was never about endless volume growth and churning out more and more content,” said Vania Schlogel, a managing partner at Atwater. “If one looks at how FA has been a steward of the Magic Mike IP, this is a single property that has expanded under their stewardship from one film to three films, a global live events platform and a reality TV 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’s expected to debut this year. 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 center, maybe a little bit weird, we kind of want to create a home for them,” Kiernan said.