WA$ Filthy Rich – Even a Prince Can Fall Upon Trying Financial Times

By: Jennifer L. Lopez

Pop star Prince has been known for his unique fashion style, his renowned musical ability in vocals, guitar playing, and song writing, and an air of mystery about his personal life.  Since his cosmic rise to fame in the 1980’s, Prince has been bringing his combination of funk, R&B, rock, gospel, and pop to the music industry, even adding his name to the Rock and Roll Hall of Fame in 2004 and Grammy Hall of Fame in 2010.

Facilitated by his wealth and success, Prince has purchased a number of properties throughout his career. But, due to poor decision making and shirking of his obligations, he has also suffered a number of accompanying financial setbacks.  Prince has been involved in at least two separate publicized lawsuits – one with Warner Bros. over artistic and financial control back in the 90’s that inspired his temporary name change to the now infamous symbol, and a more recent suit by an Irish promotions company for cancelling a $3 million show at the last minute in 2008. After a judge ruled against him in 2010, it was determined that he must repay the $3 million in damages.  In conjunction with this case and other previous divorce issues, a New York City law firm sued him in early 2011 for more than $700,000 in back legal fees.

Troubles continued to mount for Prince, as the Irish promotion company filed a movement in March 2011 to get the $3 million that the court previously ordered that he pay.  Since the amount had not been paid, they were requesting access to his assets, including his real estate, plus 8% interest on the original fee, which could add up to $240,000 extra.   A ruling in the promotion company’s favor could mean that they could attempt to seize his Minneapolis property and personal wealth to satisfy the debt.

Adding insult to injury, a foreclosure auction was scheduled in May 2011 for a property that he has owned since 1994.  The 20-acre property in Minnesota previously featured a mansion that he later demolished in 2005, but its value is still estimated at $1.15 million.  Owing approximately $369,000, he wisely paid the amount shortly prior to the scheduled auction date, avoiding a foreclosure.  The doves have truly been crying in regards to all of Prince’s financial woes in the last few years, as it is reported that he also had to pay $1.3 million in current and delinquent property taxes in 2010 to save his other 14 land parcels owned in Chanhassen, MN.

If you have been keeping track of all of these dollar amounts, it adds up to a lot of money.  Though some of the debts have been satisfied, others still remain.  Though it is difficult for us as outsiders to ascertain what led to this snowballing cascade of financial troubles, there are some things that Prince could have done to prevent this crisis.  If Prince were to have obtained less property in the first place, it would have prevented so great of a monetary burden.   If he were to have honored his obligation to do the Irish concert, he would have made money, instead of lost funds and fan support.  If he were to have resolved his outstanding debts prior to them going to foreclosure or to lawsuit, he would have avoided the added interest and penalties that comes with delayed payment.

So, what is music royalty like Prince to do now to untangle this financial knot that threatens his entire empire?  And how can we learn vicariously from his missteps, thereby preventing our own?

• Restraint creates reward—Prince has not been known as one to show restraint in many aspects of his life.  He needs to learn to avoid buying more than he needs, and doing things that can have ongoing adverse residual effects.
• Honor your obligations—If you sign up to do something, carry through.  In Prince’s case, if he signed up to do a performance, he should have completed his end of the bargain.  Likewise, if you take on a debt, do all that you can to pay it.  It is understandable that sometimes things may happen outside of your control, but in general, doing what you said you would can save you a world of trouble.
• Liquidate your assets—The recent publicized near foreclosure for Prince was regarding a piece of land that no longer even has a dwelling on it.  If he is having a hard time keeping up with all of his real estate expenses, the logical thing to do would be to let go of some of the less vital ones, like this one.  The funds gained from the sale will help him to pay off all of his other debts.
• Learn from your mistakes—Don’t keep making the same errors over again.  Don’t let debt after debt go into foreclosure or to a lawsuit.  Nip the issues in the bud as soon as possible to avoid lasting and heightened damage.
• Avoid excess that leads to expense—A story reemerged recently from basketball player Carlos Boozer about a Hollywood Hills home that he rented to Prince that the singer performed unauthorized modifications to.  Boozer sued for the untraditional makeover, consisting of purple monogrammed carpeting and the singer’s symbol splashed on the wall, but later dropped the suit.  This could have been yet another dollar amount to add to Prince’s legal tab, and it could have been easily avoided by not making unallowable changes or restoring the property back to its original state at lease end.
• Maximize your earning potential—Prince has shown himself to be unafraid of ruffling feathers.  When confronted with the Irish concert legal issue and upset fans, he responded, “Tell the cat to chill,” implying a lack of seriousness about the situation and concern for disenfranchised fans.  He has fought a public battle with technology, refusing to allow his performances to be shown and digital music to be sold online.  At times, he has shown his persona to be aloof, cold, and moody, making meaningful connections with people in the business and his fan base strained at best.  Prince is a gifted individual, and should do what he can to market his talent and make it available for consumer consumption.  The end result will only benefit his own pocketbook.

Prince is a musical genius that has been and will be renowned for decades for his raw talent.  But these financial troubles that he has been undergoing are casting an unfortunate shadow on a star-studded career.  Maybe it is just a “sign ‘o the times” that even household name celebrities are experiencing catastrophic monetary dilemmas.  Regardless, his fans will be watching and waiting to see how this member of musical royalty takes back his crown and regains his throne as the High Priest of Pop.