Whitney Houston’s death on the eve of last year’s Grammy awards cast a shadow over music’s biggest night, and that was clear from the ceremony’s opening moment. As the industry’s top stars looked on in silence, hip-hop legend LL Cool J opened the proceedings with a prayer. Others, from Bruno Mars to Alicia Keys, offered tributes of their own.
“I would not be up here as a nominee or as a winner without her influence in my life,” singer Melanie Fiona told a crowded press room later that night. “My heart is heavy right now. I feel proud to say she was such a huge influence to me.”
The outpouring of support by musicians after Houston’s passing was matched by that of her fans. Her Greatest Hits album sold 64,000 copies in the day following her death—and 818,000 copies in the U.S. alone through the first half of 2012. According to representatives from her record label, Houston has sold 3.7 million albums and 4.3 million singles worldwide this year.
Assuming a typical royalty rate of $1.50 per album and 10 cents per single, that would translate to roughly $6 million in earnings—more than George Harrison or Jimi Hendrix—and enough to land Houston on our annual Top Earning Dead Celebrities list. So why didn’t she make the cut?
The answer is fairly complicated, though not much of a surprise in the broader context of the music industry. Houston has indeed generated millions upon millions of dollars in record sales since her death—but she was already paid for her efforts years ago.
In 2001 Houston signed a $100 million deal with Arista Records. According to one music industry source, that included an advance of $30-$40 million, with the rest scheduled to be paid out for additional albums. Another source says it’s “hard to believe” she could have earned back that advance before she died, and a back-of-the envelope calculation bears out that notion.
Massive agreements like the one Houston signed are all now but extinct when it comes to recorded music, though they’re still very much in play for big tours. But in the days when record companies did commit such large sums of money to their artists, they typically made sure to protect themselves by adding language to ensure that royalties from all of an artist’s previous works will be applied to the new advance instead of being paid directly to the artist.
“Very rarely would they uncross the catalogs on a deal that large,” says Randy Phillips, a music industry veteran and CEO of concert promoter AEG Live. “They tended to [base the advance] on a projection on royalties from catalog sales.”
A quick look at the commercial performance of the three albums Houston recorded after signing the deal shows that Arista’s projections were way off. Just Whitney (2002) went platinum in the U.S. but failed to sell 2 million copies, as did I Look To You (2009). Her 2003 Christmas album didn’t even earn a gold certification, meaning it sold fewer than 500,000 copies in the U.S.
To be sure, international sales added more—Houston typically sells at least one record abroad for every record she sells in the U.S.—but even assuming that the three albums sold a combined 6 million units worldwide, her combined earnings would have added add up to about $9 million.
Representatives from Houston’s estate declined to comment for this story, and her label wouldn’t talk about the status of her advance. But the picture of the singer’s postmortem earnings is clear enough: combine the $9 million number with the estimated $6 million she has generated since her death, and you get a total that’s half the advance she earned in 2001, at best.
Since FORBES’ earnings list methodology dictates that we would have credited Houston with her advance in 2001, we aren’t adding it to her total for this year’s Dead Celebs list (for a similar reason, Michael Jackson’s estimated $30 million earnings from Cirque Du Soleil’s Immortal World Tour this year aren’t credited to his total because the number was counted as an advance last year).
And unlike Michael Jackson, Whitney Houston’s death wasn’t followed by a flurry of deal-making to monetize her afterlife. By contrast, the King of Pop earned an upfront payment of $60 million for the concert film This Is It, while his trove of unreleased music earned him a $250 million deal with Sony, the largest in the industry’s history.
Houston would have received her payment for the movie Sparkle last year, so it wouldn’t have figured into our calculations for this year’s list, and the film didn’t do well enough for her to earn anything on the back end. Houston didn’t write her own music, either, meaning she doesn’t get the publishing income enjoyed by someone like Jackson, nor did she leave behind an extensive amount of new music, as he did.
“If she doesn’t have unreleased tracks, you’re looking at bargain bin best-of album,” explained Donald David, an attorney who has represented the Tupac Shakur estate. “Those sorts of things don’t have any kind of lifespan, and they don’t produce a lot of money.”
To be sure, there will be opportunities for Whitney Houston’s heirs—namely her daughter, Bobbi Kristina—to benefit financially. Houston still earns residuals for her movie roles, and the estate could add more cash flow with a biopic, image and likeness licensing, or perhaps even a Cirque Du Soleil show.
But for now, the main beneficiary of her postmortem success is the record company that already paid her so many millions of dollars, so many years ago.
http://www.forbes.co...ng-dead-celebs/
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