Whitney Houston Owes Record Label Millions

The singer took out several loans from her record label

When she was alive, Whitney Houston laughed off reports that she was broke. Now, as sales of her albums increase any hope her family had of rolling in the dough have been dashed. According to music-industry blogger Wayne Russo, the Houston estate would need to posthumously sell 5 million records in order to repay the singer's debt to Sony Music.

In 2002, Houston signed a $100 million deal but since has taken out a number of advances and loans against it. On his blog Wayne's World, Russo breaks it down:

According to a very highly placed industry source who is very familiar with the Whitney situation, the deal most likely looks like every major superstar recording contract these days. The deal would be something like this: 4 studio albums and 2 compilation album (Greatest Hits, Number One’s, something like that) with a $25 million advance for the first album (Just Whitney) and a $10 million advance for the second album (I Look To You). Tacked on to that advance would be the costs of the music videos at approximately $500,000 each (there was a total of 6 music videos produced under the new deal which would total approximately $3 million in costs).

That would bring the total amount of money that Whitney Houston would owe Sony to approximately $38 million. Maybe more. Her royalty rate was most likely $4 per album, and the new deal would have reset all future royalty payments on past catalog. Any deficits in her royalty account up to that point were more than likely wiped out, according to the source, basically giving Houston a fresh start. This means that Whitney would have to sell at least  9.5 million albums to repay here advances and start to get royalty checks.

...On top of the millions of advances, one of my insiders says that throughout her career Whitney consistently took out loans from the label with Clive Davis’ assistance. The last big loan was reportedly from Clive for $1.2 million, though everyone knows it came from Sony and not from Clive. “No way Clive would ever reach into his own pocket for anyone’” said one former label employee.

Since Houston departed from her manager father, John Houston, who helped broker her $100 million deal, the singer hasn't had the right team behind her. The lesson here: It's one thing to be a great singer but remember it's called "show business".