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Post by [admin] Toya on Jun 23, 2005 15:06:18 GMT -5
A sudden hip-hop superstar in a world of excess, Usher balances the urge for bling with a desire to build wealth. Behold the young urban music superstar: He sells millions of compact discs worldwide. He tours the globe singing and dancing before sellout crowds. He stars on the silver screen, hangs out with Hollywood legends and dates supermodels. And when he decides to spring for a new car, it's a $500,000 chauffeur-driven Maybach. This is the world of Usher Raymond IV, the top-selling performer in the music business today. He is all of 26 years old, but everything he could ever dream of already sits right at his Fred Astaire feet. He lives in Atlanta in a $2.8 million mansion once occupied by the music mogul Antonio (L.A.) Reid, who signed Usher to his first record deal at age 14. He owns a stake in the NBA's Cleveland Cavaliers, occupying a courtside seat where he high-fives the phenom LeBron James after spectacular slam dunks.
His record company, now known as Sony BMG, has paid him $20 million in 12 years. He earned more than $20 million on a 64-city tour that just ended, and he now has deals to star in films, at a fee of $8 million each. And Usher, the name by which he is widely known, is about to renegotiate his music contract, aiming for a rich (and pretty much nonrefundable) advance of more than $50 million. "I'm coming off a whirlwind of success," Usher said, right after completing his tour in the U.S. and Europe. Days later he headed to Hollywood to begin shooting Lions Gate Films' Dying for Dolly. He is set to star in two other films, including an updated version of the Elvis Presley hit Jailhouse Rock.
Usher is getting very rich very fast--but will he stay rich? With flashy jewelry, private jets, lavish homes and huge entourages as the required symbols of success, young entertainers can go bankrupt as quickly as they go platinum. It takes only a little too much lavish spending, bad financial advice or dealings with unscrupulous financiers to leave them broke even before their fleeting fame ends. "I know how shady this business is, how cutthroat it is,"Usher says. "I've learned so many lessons from other entertainers. I'm preparing for greater things."
M.C. Hammer, the whirling-dervish rapper who sold 30 million records by the early 1990s, ran through a $30million fortune and filed for bankruptcy in 1996. Usher's own label-mates at BMG, the hit R&B act of the 1990s known as TLC, were forced to file for bankruptcy protection, despite being one of the most successful girl groups ever, with 23 million records sold. (For years Usher dated TLCmember Rozonda (Chilli) Thomas.) Michael Jackson, Usher's boyhood idol before Jackson was shamed by child-molestation allegations, earned more than half a billion dollars over the course of his career but has been forced to borrow heavily against his assets.
Now it is Usher's turn at the top. Can this new King of Pop, who hails from a working-class southern family and grew up without knowing his father, avoid the temptation to gorge on the good life? He insists he can. Contrary to the profligate ways of many performers, Usher says he has spent less than 10% of his total earnings, squirreling away the rest in fixed-income investments, blue-chip stocks and real estate. Recognizing that one's years as a teen idol are fleeting, the smooth crooner now searches for bigger business and investment opportunities, aiming to create wealth long after anyone cares to hear him sing or watch him dance. "He doesn't want to be an old performer singing in lounges in Las Vegas for the rest of his life," says Reuben McDaniel, Usher's investment adviser and head of Jackson Securities in Atlanta.
Usher leads a new generation of black artists who heed the cautionary tales of the wild-spending superstars who came before them. Many white entertainers have failed to invest wisely or blown their entire fortunes, too, but when that occurs among black stars it resonates more, because such a huge portion of black wealth is held by so few athletes and entertainers.
But persuading young hot stars like Usher to forgo bling-bling--urban slang for the flashy, bejeweled accessories that scream out "Look how rich I am!"--is an unending struggle. "The typical old-school artist believes wealth is displayed in the number of cars and the amount of jewelry,"says Usher's business manager, Solomon Smallwood of MadisonSmallwood Financial in Atlanta. "The thing about Usher is, he gets it. He understands the difference between generating cash and creating wealth. A lot of guys, they don't want to hear about it."
Smallwood, whose roster includes the rap duo Outkast and the Atlanta Falcons' first-round draft pick, T. J. Duckett, tries all kinds of tactics to educate his clients. He sometimes makes them fill out McDonald's job applications "to remind them that they could end up needing one if they aren't careful." When a star insists on making a frivolous purchase, Smallwood makes him sign a "Stupid Letter," acknowledging that it's being done against his advice. Even Usher has had to endure this small humiliation. "Yeah, I once had to sign one," the singer admits. He refuses to cite the item at issue, then confesses that he once spent $100,000 on a diamond-encrusted custom bracelet. "I know those things don't solidify success," he says apologetically. "You build a budget, and you have to live within it."
Usher's urban sound has broad appeal, spawning such hits as the dance tune "You Don't Have to Call" and the mournful ballad "Burn." He has sold more than 25 million records; Confessions, his fourth and latest album, accounts for half the total. He had 4 songs at number one on the Billboard 100 and became the third artist ever to have 3 singles simultaneously in the top 10 (after the Beatles and the Bee Gees). This year he also won three Grammy Awards and four American Music Awards.
Usher was raised in Chattanooga, Tennessee. His parents split when he was an infant. He had little contact with his father afterwards. "We don't speak frequently at all," Usher says. His mother, Jonnetta Patton--who still manages his career--remarried and had another son, James. While she worked as a senior medical claims examiner at Blue Cross/Blue Shield, Usher began performing with a local group. Jonnetta decided in 1993 to break him out on his own. She moved the family to Atlanta, where there was a humming new urban music scene, and by age 13 Usher got his first check, winning $500 in a talent show.
His stepfather tired of the demands Usher's career was placing on the family; the couple split when Usher was 16. "He just couldn't deal with it," Jonnetta says of her second husband. "One day he told me to make a choice--and I told him, 'Bye-bye.' I was devastated because he was a great man. I suffered for about two years." Today she also manages Usher's 20-year-old half-brother, an aspiring producer and rapper who is set to release his first compact disc in January.
At age 14, after singing in a Star Search competition, Usher signed with BMG's LaFace Records, which was headed by L.A. Reid. His debut album came out in 1994 and sold more than 500,000 copies, respectable for a first-time artist. Then in 1997 came My Way, his second album, and sales rose tenfold to 5.3 million copies. A year later Usher, who is a songwriter as well as a singer, landed his first "major check"--for $1 million--in a deal with EMI Music Publishing, agreeing to split evenly publishing rights to all of his songs. He ran through the money so fast it frightened him. "I bought a lot of jewelry, a lot of unnecessary stuff," he says. Busted and repentant, he sat down with Solomon Smallwood and solemnly pledged: "I don't ever want to be broke."
The money kept piling up. My Way was so hot he talked BMGinto a $10 million advance for the next CD, which he didn't release until 2001. That album, 8701, sold 6.2 million copies. That brought another $10 million advance and led to Confessions, which debuted in 2004 and sold 1.1 million copies in the first week. Now Usher is about to go back to Sony BMG and demand a fivefold increase: a multirecord deal worth well over $50 million. The fat paycheck would be officially classified as an advance against future record royalties. In reality it is a payoff for past success. "I have built careers," Usher insists. "I'm one of the people who makes the BMG system look as good as it does." Like book authors, most artists never receive royalty checks, because advances are large and accounting is byzantine; Usher hasn't, either, but he has raised his cut to as much as 23%, just in case.
Sony BMG executives won't discuss the matter, but they will feel pressure to appease one of the few hot-selling artists in a business turned upside down. Usher will likely get an upfront check of $20 million to $30 million as part of the long-term deal. He says he will keep his spending under control, continue to invest in business ventures and focus on upcoming films and his next album, due late next year. Still, the temptation to spend persists. The singer is looking at new homes in New York, Los Angeles and Cleveland. When he is onstage or at public events, he drips with furs and gaudy jewelry, but he insists it is "only part of my costume, not the endgame." Yet he also admits:"I buy too many clothes." As for that $500,000 Maybach, replete with a "luxury saloon" and mobile office inside, "That was something I had my eye on for a long time," he says, as if contemplation justifies dubious spending.
Usher and his mom also own a 14,000-square-foot office complex, worth an estimated $3 million, in Atlanta. It houses Jonnetta Patton's management firm as well as their own small recording label, Us Records. Usher has signed three new acts, with releases slated for next year. Usher's payroll, including lawyers, bodyguards and agents, totals 25 people. But inside the complex, where 8 full-timers work, Usher's office is spartan, with a large desk, a black velour sofa, dim lighting and a couple of toy Porsches shoved into the corner.
A new world of opportunity has opened up, and he seems determined to capitalize. Usher has just provided seed capital of $1 million for a bank that will open this year. In February he invested an estimated $9 million for a small stake in the Cleveland Cavaliers. "He has surprised us a bit. I didn't know how serious he was," says his Cavs partner, Daniel Gilbert, who put up more than half of the $375 million paid for the team. He says Usher already is working to create branding opportunities and enhance the fans' entertainment experience in the Cavs' arena.
"I know I have the talent to entertain,'' Usher says. "Now I just want to be a great businessman."
His record company, now known as Sony BMG, has paid him $20 million in 12 years. He earned more than $20 million on a 64-city tour that just ended, and he now has deals to star in films, at a fee of $8 million each. And Usher, the name by which he is widely known, is about to renegotiate his music contract, aiming for a rich (and pretty much nonrefundable) advance of more than $50 million. "I'm coming off a whirlwind of success," Usher said, right after completing his tour in the U.S. and Europe. Days later he headed to Hollywood to begin shooting Lions Gate Films' Dying for Dolly. He is set to star in two other films, including an updated version of the Elvis Presley hit Jailhouse Rock.
Usher is getting very rich very fast--but will he stay rich? With flashy jewelry, private jets, lavish homes and huge entourages as the required symbols of success, young entertainers can go bankrupt as quickly as they go platinum. It takes only a little too much lavish spending, bad financial advice or dealings with unscrupulous financiers to leave them broke even before their fleeting fame ends. "I know how shady this business is, how cutthroat it is,"Usher says. "I've learned so many lessons from other entertainers. I'm preparing for greater things."
M.C. Hammer, the whirling-dervish rapper who sold 30 million records by the early 1990s, ran through a $30million fortune and filed for bankruptcy in 1996. Usher's own label-mates at BMG, the hit R&B act of the 1990s known as TLC, were forced to file for bankruptcy protection, despite being one of the most successful girl groups ever, with 23 million records sold. (For years Usher dated TLCmember Rozonda (Chilli) Thomas.) Michael Jackson, Usher's boyhood idol before Jackson was shamed by child-molestation allegations, earned more than half a billion dollars over the course of his career but has been forced to borrow heavily against his assets.
Now it is Usher's turn at the top. Can this new King of Pop, who hails from a working-class southern family and grew up without knowing his father, avoid the temptation to gorge on the good life? He insists he can. Contrary to the profligate ways of many performers, Usher says he has spent less than 10% of his total earnings, squirreling away the rest in fixed-income investments, blue-chip stocks and real estate. Recognizing that one's years as a teen idol are fleeting, the smooth crooner now searches for bigger business and investment opportunities, aiming to create wealth long after anyone cares to hear him sing or watch him dance. "He doesn't want to be an old performer singing in lounges in Las Vegas for the rest of his life," says Reuben McDaniel, Usher's investment adviser and head of Jackson Securities in Atlanta.
Usher leads a new generation of black artists who heed the cautionary tales of the wild-spending superstars who came before them. Many white entertainers have failed to invest wisely or blown their entire fortunes, too, but when that occurs among black stars it resonates more, because such a huge portion of black wealth is held by so few athletes and entertainers.
But persuading young hot stars like Usher to forgo bling-bling--urban slang for the flashy, bejeweled accessories that scream out "Look how rich I am!"--is an unending struggle. "The typical old-school artist believes wealth is displayed in the number of cars and the amount of jewelry,"says Usher's business manager, Solomon Smallwood of MadisonSmallwood Financial in Atlanta. "The thing about Usher is, he gets it. He understands the difference between generating cash and creating wealth. A lot of guys, they don't want to hear about it."
Smallwood, whose roster includes the rap duo Outkast and the Atlanta Falcons' first-round draft pick, T. J. Duckett, tries all kinds of tactics to educate his clients. He sometimes makes them fill out McDonald's job applications "to remind them that they could end up needing one if they aren't careful." When a star insists on making a frivolous purchase, Smallwood makes him sign a "Stupid Letter," acknowledging that it's being done against his advice. Even Usher has had to endure this small humiliation. "Yeah, I once had to sign one," the singer admits. He refuses to cite the item at issue, then confesses that he once spent $100,000 on a diamond-encrusted custom bracelet. "I know those things don't solidify success," he says apologetically. "You build a budget, and you have to live within it."
Usher's urban sound has broad appeal, spawning such hits as the dance tune "You Don't Have to Call" and the mournful ballad "Burn." He has sold more than 25 million records; Confessions, his fourth and latest album, accounts for half the total. He had 4 songs at number one on the Billboard 100 and became the third artist ever to have 3 singles simultaneously in the top 10 (after the Beatles and the Bee Gees). This year he also won three Grammy Awards and four American Music Awards.
Usher was raised in Chattanooga, Tennessee. His parents split when he was an infant. He had little contact with his father afterwards. "We don't speak frequently at all," Usher says. His mother, Jonnetta Patton--who still manages his career--remarried and had another son, James. While she worked as a senior medical claims examiner at Blue Cross/Blue Shield, Usher began performing with a local group. Jonnetta decided in 1993 to break him out on his own. She moved the family to Atlanta, where there was a humming new urban music scene, and by age 13 Usher got his first check, winning $500 in a talent show.
His stepfather tired of the demands Usher's career was placing on the family; the couple split when Usher was 16. "He just couldn't deal with it," Jonnetta says of her second husband. "One day he told me to make a choice--and I told him, 'Bye-bye.' I was devastated because he was a great man. I suffered for about two years." Today she also manages Usher's 20-year-old half-brother, an aspiring producer and rapper who is set to release his first compact disc in January.
At age 14, after singing in a Star Search competition, Usher signed with BMG's LaFace Records, which was headed by L.A. Reid. His debut album came out in 1994 and sold more than 500,000 copies, respectable for a first-time artist. Then in 1997 came My Way, his second album, and sales rose tenfold to 5.3 million copies. A year later Usher, who is a songwriter as well as a singer, landed his first "major check"--for $1 million--in a deal with EMI Music Publishing, agreeing to split evenly publishing rights to all of his songs. He ran through the money so fast it frightened him. "I bought a lot of jewelry, a lot of unnecessary stuff," he says. Busted and repentant, he sat down with Solomon Smallwood and solemnly pledged: "I don't ever want to be broke."
The money kept piling up. My Way was so hot he talked BMGinto a $10 million advance for the next CD, which he didn't release until 2001. That album, 8701, sold 6.2 million copies. That brought another $10 million advance and led to Confessions, which debuted in 2004 and sold 1.1 million copies in the first week. Now Usher is about to go back to Sony BMG and demand a fivefold increase: a multirecord deal worth well over $50 million. The fat paycheck would be officially classified as an advance against future record royalties. In reality it is a payoff for past success. "I have built careers," Usher insists. "I'm one of the people who makes the BMG system look as good as it does." Like book authors, most artists never receive royalty checks, because advances are large and accounting is byzantine; Usher hasn't, either, but he has raised his cut to as much as 23%, just in case.
Sony BMG executives won't discuss the matter, but they will feel pressure to appease one of the few hot-selling artists in a business turned upside down. Usher will likely get an upfront check of $20 million to $30 million as part of the long-term deal. He says he will keep his spending under control, continue to invest in business ventures and focus on upcoming films and his next album, due late next year. Still, the temptation to spend persists. The singer is looking at new homes in New York, Los Angeles and Cleveland. When he is onstage or at public events, he drips with furs and gaudy jewelry, but he insists it is "only part of my costume, not the endgame." Yet he also admits:"I buy too many clothes." As for that $500,000 Maybach, replete with a "luxury saloon" and mobile office inside, "That was something I had my eye on for a long time," he says, as if contemplation justifies dubious spending.
Usher and his mom also own a 14,000-square-foot office complex, worth an estimated $3 million, in Atlanta. It houses Jonnetta Patton's management firm as well as their own small recording label, Us Records. Usher has signed three new acts, with releases slated for next year. Usher's payroll, including lawyers, bodyguards and agents, totals 25 people. But inside the complex, where 8 full-timers work, Usher's office is spartan, with a large desk, a black velour sofa, dim lighting and a couple of toy Porsches shoved into the corner.
A new world of opportunity has opened up, and he seems determined to capitalize. Usher has just provided seed capital of $1 million for a bank that will open this year. In February he invested an estimated $9 million for a small stake in the Cleveland Cavaliers. "He has surprised us a bit. I didn't know how serious he was," says his Cavs partner, Daniel Gilbert, who put up more than half of the $375 million paid for the team. He says Usher already is working to create branding opportunities and enhance the fans' entertainment experience in the Cavs' arena.
"I know I have the talent to entertain,'' Usher says. "Now I just want to be a great businessman."
