Britney Spear May Lose All Her Fortune, Estimated At $125 Million
LOS ANGELES — Britney Spears’s klieg-lighted meltdown sent her to the psychiatric ward twice, and left her long-divorced parents, her brother, and a SWAT team of lawyers and accountants grappling with how to protect her from predatory hangers-on, from the paparazzi who dog her every move and from her own erratic behavior.
Beyond the psychodrama being played out on tabloid covers, celebrity-news shows and gossip Web sites is another serious subject for the Spears family: how to protect the millions of dollars that Ms. Spears, 26, has amassed over a decade as one of America’s biggest pop music, merchandise and endorsement engines.
It’s impossible to say how much money she has. Published estimates of her net worth have varied wildly, up to $125 million. But one of her former financial advisers, speaking on the condition of anonymity because of his relationship with his client, estimated her current fortune at around $50 million.
That’s an enormous amount, but, as Michael Jackson proved, being a wealthy cultural phenomenon doesn’t make one impervious to financial disaster. Celebrities, like athletes, often have a small window to make their money, typically at a young age when they are probably not thinking about the future.
As a result, many child stars like Macaulay Culkin are dragged into family squabbles over money while others — too numerous to mention — end up looking to revive their careers long after the money has run out.
Ms. Spears will not run out of money anytime soon, but her longer-term prospects have taken a hit in the last year because of bizarre behavior — her public scenes, questionable parenting skills and a shaky comeback performance at the MTV Awards — and her tortured personal life after her divorce from Kevin Federline, formerly one of her backup dancers.
According to court documents, her everyday finances seem to have fallen into disrepair as well. A Feb. 14 court filing put it starkly: “Members of Britney’s household,” it said, “have been paying for her basic necessities, including medicine, food, and other day-to-day needs.”
On Feb. 1, the day after Ms. Spears was involuntarily admitted for treatment at the U.C.L.A. Medical Center, her estranged father, Jamie Spears, was named her co-conservator, giving him control over her treatment, security, visitors and daily life.
Mr. Spears is sharing oversight of her estate with an independent lawyer, Andrew M. Wallet, to dispel the notion that Ms. Spears’s parents were making a grab for their daughter’s fortune. With the court’s permission, they immediately fired her business manager.
Another team of lawyers was hired for the conservators and quickly set out to assess the financial damage. Yet another lawyer was appointed by the probate court, as is routine, to look out solely for Ms. Spears’s interests. Ms. Spears’s brother Bryan, along with a lawyer, were given control of her revocable trust, which contains all her liquid assets, so they could begin paying her bills. And Ms. Spears’s criminal lawyer, Blair Berk, was said to be overseeing the whole Humpty Dumpty-like effort.
All the independent lawyers aside, one cannot ignore money as a motivating factor as the estranged Spears parents joined forces. Since she first became a pop star in 1999 on the strength of her hit “Baby One More Time,” she has been the primary breadwinner for the entire Spears clan.
The earning power of her 16-year-old sister, Jamie Lynn, the star of “Zooey 101” on Nickelodeon, probably suffered in December when she announced her pregnancy, which also helped sink her mother’s deal to write a book on parenting.
What little light has been shed on Ms. Spears’s finances came last May, when part of an income statement surfaced in her divorce case. It put her average monthly earnings at more than $730,000, mainly from royalties, but said she earned only $13,000 a month from investments. (Her spending, including $102,000 a month for entertainment, gifts and vacation and $16,000 for clothes, was more eye-catching.)
The nature of her investments might be unclear as well. Accountants are trying to learn whether her money was moved into overly risky investment vehicles, whether any business deals need to be undone and whether her assets were outright looted. (Her father filed a report of grand theft, according to The Los Angeles Times, asserting that paintings, jewelry and other valuables had been stripped from her Beverly Hills home).
Though she is said to own large swaths of Louisiana timberland, Ms. Spears is not a real estate tycoon in the classic Hollywood sense: she owns a house in a gated hilltop community near Mulholland Drive but listed it for sale a year ago at an asking price of $7.5 million, scarcely more than the $7.2 million she paid for it.
She sold a house in Malibu last summer for $10 million after paying $6.9 million for it in 2004, and she unloaded her Lower Manhattan condominium for $4 million in 2006, after buying it for $3 million in 2002.
Ms. Spears’s career first began to sputter after her last major tour was cut short, nearly four years ago. Based on the strength of her first two albums, “Baby One More Time” and “Oops! I Did It Again,” she received nearly a $10 million advance for her 2003 album “In the Zone” and a net earning of $6.5 million after production costs, according to reports published after her prenuptial agreement was leaked.
By contrast, she was paid $4 million for “Blackout,” her latest album, according to people briefed on her affairs, but she probably took home only a fraction of that for the album, which was more than a year in the making. Ms. Spears’s label, Jive Records, continues to promote singles from “Blackout,” without her active participation. (The recording industry has much experience with artists who have become incapacitated or unavailable or dead.)
But digital music has been punishing for performers like Ms. Spears, one of the last to sell more than 10 million copies of an album before the shift to downloads. The first two “Blackout” singles, “Gimme More” and “Piece of Me,” have sold a combined 1.54 million copies through digital services like iTunes, but industry experts say Ms. Spears might collect only $150,000 from that source.
Compared with touring, albums are loss-leaders for pop stars of her magnitude. Ms. Spears’s five major tours have sold some $140 million in tickets, according to PollStar, a music industry service. Her take, after deducting costs for arena rentals, equipment, crew and all those backup dancers, is much smaller.
The real money is made not from ticket sales but from the sale of T-shirts, key chains, dolls and countless other Britney-branded goods.
“It’s a gray area nobody ever focuses on,” said Steve Lunt, who oversaw Ms. Spears’s musical endeavors as a vice president at Jive until 2006. But, he said, merchandise revenue could be as much as or more than her share of ticket proceeds. “And that’s unadulterated profit margin.”
At her peak, Ms. Spears earned well over $12 million for endorsing companies like Toyota, Nabisco, Kirin beer, Sketchers, Clairol and McDonald’s; $9 million was from Pepsi alone. And Ms. Spears still gets at least $2 million to $3 million a year from a perfume deal she signed with Elizabeth Arden in 2004. The company continues to build on what it has made worldwide from three Britney perfume lines. There is particularly strong demand for them in Dubai, the company says.
While some of these deals remain in place, it is hard to imagine a company seeking her endorsement now except for pure shock value.
For now, the people around Ms. Spears are occupied with more basic questions — about how she will live, rather than whether she might perform again. Lawyers and her parents are trying to find the appropriate middle ground between confining Ms. Spears physically and allowing her too much freedom for her own good.
This is not an easy balance to strike, said one expert on conservatorships for the infirm, Marc B. Hankin, who at one point represented Brian Wilson of the Beach Boys. “With good social support and good pharmacologists, you can help people come back to life, and a lot of people will never come back without that,” he said.
If Ms. Spears regains her health — and her desire to tour — will there still be an opportunity?
A return would require corporate sponsors, who for the moment would be likely to shun Ms. Spears but who might come around, according to Mr. Lunt, the record executive.
“My gut feeling is people will still want to be associated with her,” he said. “Everyone thinks there’s going to be a comeback at some point. You could mention her name in Afghanistan, Israel, Greece or South Africa, and everyone knows who she is. You can’t buy that.”
People around Ms. Spears say she is not so far gone as a star. “She’s not someone who can’t put the tools back together and function,” said one such person, who because of a relationship with Ms. Spears spoke on the condition of anonymity.
“Because we’re so incredibly fickle as a society, the perfect entertainment is someone who’s in the bottomless pit and rising again,” the person said. “If she’s together, fit, beautiful and on her game, it’ll be just printing money.”
[Via - NYTimes.Com]