When Whitney Houston passed away 2 weeks ago, tabloid reports were rampant that she was broke and bumming $100. a pop off her music industry friends. Although there is no way to know her recent financial state for sure, this information is likely untrue.
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| Whitney and Jordin Sparks in “Sparkle” |
Whitney Houston signed a $100. million dollar record deal with Arista Records back in 2001, and had been living off of cash advances from the label based on future earnings of that deal. Record sales from her final album “I Look To You” were abysmal, but she reportedly earned $3.5 million from her highly criticized world tour promoting that album. She also earned a hefty salary just a few short months ago from her work in the upcoming film “Sparkle,” as both an actress and an executive producer. So, rumors that she was without an income and destitute just don’t add up.
Upon news of her death, Whitney’s record sales skyrocketed, just as Michael Jackson’s did at his death. However, since Whitney was only the singer and never wrote, produced, or published any of her massive hits, her estate will not get the type payday the Michael Jackson estate did. For example, one of her most famous and lucrative hits is the song “I Will Always Love You.” But the lion’s share of earnings from record sales and radio and television replays of the song will go to Dolly Parton, who originally composed and published it. Still, Whitney’s estate will receive a small “artists” percentage from each record sold, which equates to about $2.00 per album.
However, because Whitney borrowed so much over the years from future earnings of her $100. million record deal, and because she never got to complete all 6 albums and terms of that deal, her estate is now responsible for paying that money back. This means that if her songs sell 5 million copies this year, her earnings would amount to approximately $2.00 per album, or $10 million dollars. Depending on how much she borrowed from the deal over the years, Arista Records will withhold a portion or all of that $10. million dollar income to repay her debt.
Most artists of her caliber end up worth more dead than alive. But because Whitney is no longer around to make concert and film or television appearances for pay, her estate is now forced to come up with creative ways to continue an income stream. Television rights to her funeral last Saturday were initially limited to a one-time live stream on the date of the service. However, the estate is preparing to sell distribution rights of the funeral to the highest bidder. They are also looking to capitalize on Whitney’s popularity in death with various merchandising deals that would utilize her name, modeling images, family photos, and story for potential book, TV and/or movie deals. Because that income is not record sale related, all of those proceeds would go directly to her daughter Bobbi Kristina, who is the estate benefactor. Although Arista Records could sue the estate to get a piece of any additional income, Clive Davis may write off the debt as a loss and allow any future earnings to support Whitney’s only daughter.
But Arista Records is also planning to cash in on Whitney’s renewed popularity in death, by releasing 35 of her previously recorded but unreleased songs. Of course due to Whitney’s debt, all earnings from those songs would go directly to the record label.
According to an industry insider “Whitney’s catalogue will continue to make a lot of money for the record company for a long time. The label is already talking about putting out a greatest hits and then as many albums of never-before-released songs as possible.” Arista Records owns the masters of all the songs that were cut from her 24-year recording career and could strategically release and profit from them for many years to come.
