Filed under: PepsiCo (PEP), Marketing and advertising, Toyota Motor Corp. (TM), McDonald’s (MCD)
The New York Times reports that despite a fortune ranging from $50 million to $125 million, the battle for mentally unstable Britney Spears’s money is raging. She’s a shrewd business person — generating cash from royalties, concerts, clothing, perfume, corporate promotions and real estate.
But she’s also spending a lot of that money. She takes in $720,000 a month but mainly from royalties, but earns “only” $13,000 a month from investments. Her spending includes $102,000 a month for entertainment, gifts and vacation and $16,000 for clothes. Yet court documents reveal that members of Britney’s household have been paying for her medicine, food, and other day-to-day needs.
While Britney makes some money from her albums — she received a $4 million advance on her latest Blackout — the real money is in concerts and the clothing and other items sold there. Her five major tours have sold some $140 million in tickets but her take — after deducting costs for arena rentals, equipment, crew and all those backup dancers — is much smaller. The real money is made from the sale of T-shirts, key chains, dolls and other Britney-branded goods.
And if Britney can’t revive her career, there are some huge public companies that’ll feel some of that burn. That’s because she’s been promoting products from companies around the world. For example Britney made $12 million for endorsing companies like Toyota Motor Corp. (NYSE: TM), Nabisco, Kirin beer, Sketchers, Clairol and McDonald’s (NYSE: MCD); $9 million was from PepsiCo (NYSE: PEP) alone.
And she still gets at least $2 million to $3 million a year from a perfume deal she signed with Elizabeth Arden (NASDAQ: RDEN) in 2004. Elizabeth Arden continues to build on what it has made worldwide from three Britney perfume lines. There is particularly strong demand for them in Dubai.
But wait, there’s more. she made over $4 million in profit from selling real estate. She sold a home 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. And 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 — a bit more than the $7.2 million she paid for it.
With all that money, I don’t know why her family is paying for her day-to-day needs. But I’d say she’s in pretty good financial shape. As for her mental say, I’ve no idea.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the companies mentioned.
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