Publication: Minneapolis Star Tribune [US]
Date: September 17, 1993
Section:
Page Number(s):
Length:
Title: "If Prince Is Low On the Charts, Why Is He On the Forbes List?"
Written By: Jon Bream

If Prince's name - or symbol - hasn't been near the top of the charts lately, how did he end up No. 5 on Forbes' list of the highest-paid entertainers for 1992-'93?

It has as much to do with Warner Bros. Records' faith inPrinceas with his actual record and concert sales the past two years.Nearly one-third of his estimated $ 49 million pretax take came from a bonus he received when he signed his lucrative new, six-album recording deal - reportedly worth as much as $ 100 million - last year.He received a $ 15 million signing bonus from Warner Bros., according to Peter Newcomb, who has compiled the annual entertainers' list for Forbes for the past seven years.

In the financial magazine published this week, it was reported thatPrince pulled in $ 35 million in '92 and $ 14 million this year.In aninterview, Newcomb said that this revenue representsPrince'spretax proceeds from gross sales and that, after all taxes, expenses and staff are paid, the Chanhassen-based star will probably realize only one-third of it.

Newcomb explained how he determinedPrince'sincome.

- " Diamonds and Pearls," Prince'salbum released in late '91, sold 6 million copies, bringing him $ 12 million in '92.

- His '92 album, the title of which is the combination male-female symbol printed above, sold about 2 million copies last year, meaning another $ 4 million.

-Princeearned another $ 1 million from the sales of singles and videos and another $ 2 million from his foreign concert tours, mostly from souvenir sales, according to Newcomb's estimates.

-Princepicks up about $ 1 million a year from sales of his old recordings and song-publishing royalties.

- The Warner Bros. bonus was $ 15 million for signing the contract and for a related song-publishing deal; unlike his usual $ 10 million advance per album, Princedoes not have to repay the $ 15 million to Warners, according to Newcomb.

For this year, Newcomb figuresPrincepocketed $ 10 million as an advance for his "Hits" album, $ 1 million each from his U.S. and European concert tours and $ 1 million each from sales of singles and old albums.

Princedidn't tour extensively in '92 or '93, and Newcomb said most big-name music acts besides the Grateful Dead and Neil Diamond don't realize mega-bucks from concert ticket sales."WhenPrincetours, it's an extravagant affair [for production, staff and travel costs]," Newcomb said."The tickets sales are a wash. Ten percent of the gross goes to his agents. Most of his money is from merchandising [souvenirs].It took the Dead 20 years to figure out that 'we can make a ton on merchandising.' "

Guns N' Roses, the top-grossing music act on Forbes list, toured nearly nonstop for the past two years, but Newcomb said nearly half the band's $ 53 million came from sales of 10 million copies of its two albums, "Use Your Illusion I" and "Use Your Illusion II." The big winners in show biz, according to Forbes, were TV star-movie producer Oprah Winfrey with $ 98 million and film producer-director Steven Spielberg with $ 72 million.

Conventional wisdom in the music industry suggests that Michael Jackson would have healthy income because he's the majority owner of ATV, one of the largest and most valuable song-publishing houses, which includes the Beatles' songs. Newcomb estimated that Jackson makes $ 3 million annually from ATV.

Country superstar Garth Brooks, who has probably sold more records than anyone else in the past two years, made a mere $ 47 million because he was receiving a lower royalty rate than other superstars. However, he recently negotiated a new recording contract with Liberty Records that is significantly different from those ofPrince,Madonna, Michael Jackson and other heavyweights.Brooks receives no advance fee from Liberty but his royalty rate is an unprecedented 50 percent, according to the Los Angeles Times.That means he picks up $ 4 to $ 5 for every recording sold - twice as much as any other superstar.

The advance fees - the equivalent of an interest-free loan - could undermine some of Forbes' calculations.For instance, under his new contract,Prince receives a $ 10 million advance for each recording, but he must repay the money - from his share of royalties - to Warner Bros. before he receives a penny.He needs to sell 5 million albums to earn back $ 10 million in royalties.If he doesn't reach those sales levels, he doesn't receive a $ 10 million advance for the next project.

According to Warner Bros., 3.45 million copies of last year's symbol album have been sold; therefore, under the terms of his contract, his advance fee for the next album is reduced accordingly.He probably received $ 7 million, not $ 10 million, for "The Hits/The B-Sides," a three-CD collection released this week with a $ 49.99 list price. ( Prince'sCDs usually have a list price of $ 16.98 or $ 17.98.)

"Maybe we're a little aggressive and maybe we should have said $ 47 million," Newcomb said."I had to forecast what his sales would be down the road [for '93]."

So what if it's $ 47 million instead of $ 49 million?The recalculation means thatPrincewould be tied with U2 and Brooks as the second-highest-paid music act of the past two years.Either way, the guy who uses a glyph instead of his name can be called Rich.