The study goes on to outline some shocking details regarding some major stars with giant earning power that were forced into bankruptcy, in some cases as a way to be released from an unfair contract. According to the study:
"Some music lovers are surprised to hear news of their favorite artists going bankrupt, but it does happen - and not always because the artist went on a wild spending spree. Bankruptcy is one of musicians' only defenses against bad record contracts.
Despite TLC's overwhelming success as an R&B group in the 90's, they were for forced to file for bankruptcy due to the massive overhead costs they weren't able to pay. They earned less than 2 percent of the $175 million dollars generated by CD sales - about 40 times less than the profit that was divided among their management, production and record companies. Likewise, Toni Braxton declared bankruptcy in 1998 after generating $188 million dollars from CD sales; her record contract paid her less than 35 cents per album.
The Goo Goo Dolls have generated $2 million in album sales, but filed bankruptcy because they owed so much money to their record label. Bankruptcy has become increasingly common over the years, even with many successful musicians. Even Jerry Lee Lewis and Michael Jackson, both members of the Rock and Roll Hall of Fame, have filed bankruptcy.
Sometimes legal troubles, debts or taxes are to blame for famous musicians filing bankruptcy. Other times; however, it is simply a way to get out of a contract. The Recording Industry Association of America (RIAA) is lobbying to change bankruptcy laws, making it more difficult for artists to file bankruptcy for the sole purpose of getting out of a contract."Music has never been an easy business to make a buck in. Go back a hundred years and stories abound how an unsuspecting musician made pennies on the dollar for their work while someone else benefited. Even today with artists having a greater awareness and access to expert legal council doesn't necessarily mean that the outcome will be any different.
The best way to protect yourself is to be in the business for the right reason in the first place, and that's for the music, but you still have to surround yourself with the best team of professionals that you can afford.
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5 comments:
Shocking but not surprising; if that makes any sense. Graph is worth making a poster, a wallet sized picture, and even a tattoo on your back as a reminder to you and your team-mates, etc. of what's in store.
Thanks again for the grounding in reality Bobby...
On the positive side: it's never been easier for artists to exist without labels. That chart doesn't apply to people who sell their own records.
It pains me to see these musicians struggle so hard for something that their heart burns for. We were always taught to follow our dreams, to live out our passions. But what if our passion – say for example, making and sharing music – all comes down to a cold and calculating numbers game against an institution that feeds off that very same thing for which you’ve sacrificed your blood, sweat, and tears? I know not every band out there is out to get rich. Some do it just for the sake of pursuing their art, but let’s face it, everyone’s gotta eat, right?
Louisa Matsuura
I think the most common problem here is that they don’t know where they should really invest their money. I’m not only referring to the musicians out there, but to other people as well. Sometimes, they just overindulge their cash onto superfluous things. Spend your money wisely. Before you use it, make sure that what you’re spending is beneficial to you.
This goes to show that everyone is vulnerable to bad breaks. Some people tend to think that only regular citizens are prone to foreclosed homes, tax bills, and other related things. Even celebrities can get in financial trouble and sink further if left without guidance by a good legal counsel. Financial education is important to develop financially responsible people.
Justin Myers @ JMMLegal.com
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