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Whitney: She’s Broke, And on The Run

March 30, 2006

Whitney: She’s Broke, And On The Run

Troubled pop superstar Whitney Houston — once a bigger seller than Madonna — is running out of cash. Insiders tell me she is literally broke, with no current income and huge expenses. Not only that: Whitney’s life is such a dismal mess that, according to sources, her daughter, Bobbi Kristina, is living with Whitney’s brother Gary and sister-in-law, Pat, close to Houston’s home in Atlanta.

And it just keeps getting worse: A local Atlanta lawyer told me yesterday that he recently had housemates Whitney and ‘80s pop star Cherelle (real name Cheryl Week Norton) evicted from the luxury townhouse he’d rented to the latter last fall. Houston’s name was not on the lease, but the landlord says she was living there and has witnesses to back him up.

Now the landlord says he’s about to sue both women for about $17,000 in back rent and about $8,000 in damages for the mess they left behind. That includes carpets and furniture ruined by burn marks and broken windows. The papers will be filed shortly, he tells me.

When the landlord went to speak to Houston about the noise and filth emanating from the townhouse, he told me the singer appeared “disheveled” and her voice was gravelly. On the plus side: “She was very pleasant.”

Houston still owns a beautiful home in suburban Atlanta, but moved in with Cherelle at least temporarily for an extended party last fall. Houston and Norton, according to my sources, abandoned the befouled townhouse and moved to the Atlanta neighborhood of Buckhead. She has since returned to her Alpharetta home, where husband Bobby Brown has also alighted after having last been seen partying in Los Angeles. There, Brown told friends alternately that Houston was pregnant and that they were divorcing.

Sometimes -- let’s face it -- we have fun tweaking the stars. But that’s not the case with Whitney Houston. I’ve known her well since 1989. She was once a beautiful girl with the greatest voice in the world and an unlimited future. What’s happened to her in the last few years is the worst kind of show business tragedy. Friends of hers tell me they fear for her life. This is a monumental disaster for which no one wants to take responsibility.

It doesn’t help that this week Whitney was sold out by her sister-in- law, Tina Brown (not to be confused with the real Tina Brown, thanks). Tina’s brother is Houston’s often-arrested and imprisoned former pop star husband Bobby. Tina sold the most salacious stories she could muster to "The National Enquirer" and the "UK Sun" tabloid, along with pictures that suggest a horrifying saga of Whitney’s drug abuse. Her take could be as high as $200,000. There has been some suggestion that Brown, needing cash, put her up to it.

Ironies abound: First, Whitney entered rehab one year ago. Obviously, it didn’t work. And second, sources say that Whitney took care of Tina Brown’s children, said to be six in total, while she was in rehab herself. Even at her worst, Houston, friends say, has tried to keep her husband’s relatives happy.

“There are 30 members of the Brown family,” says an insider, “and they’ve all sponged off of Whitney.”

That’s the problem. Generous to a fault, Houston has now managed to spend most of her earnings taking care of her own family and Brown’s. She has two main assets: a five-acre estate in posh Mendham, N.J., assessed in 2005, according to public records at $5.6 million. In 2003, she also purchased a large home in Alpharetta, Ga., a for $1.8 million, almost all of which was borrowed.

“There’s no money,” says an insider. “She’s really broke.”

The Mendham property has become to Houston what Neverland is to Michael Jackson: a bank account against which she can draw loans. Unlike Jackson, however, Houston does not have investments like the Beatles catalog to fall back on now that she’s in trouble.

Public records show Whitney has borrowed millions of dollars and taken out many staggering mortgages in her time — enough to give Michael Jackson a run for his money.

The original Mendham home, records show, was bought in 1987 for $2.2 million; Houston borrowed $1.4 million to pay for it. In 1998, as part of a refinancing plan, she took a $6.45 million mortgage that involved buying a second home in Mendham around the corner from the first. It also appears that she bought a condominium in North Bergen, N.J., simultaneously with a $3.4 million mortgage.

In May 2003, Houston obtained a $2 million, 15-year mortgage against the Mendham house. At the same time, records show she also took out a second equity loan against the same property for $500,000. Three months later, there’s a new $700,000 mortgage for a different property.

Houston’s financial problems are simple, and they were easy to predict. She is a singer, not a songwriter. Unlike Celine Dion, Mariah Carey and Madonna, Houston does not write her own material. Or, to be more exact, she never attached her name to her hits and took a cut of the publishing. She has only five song credits on ASCAP’s Web site.

This is rare among modern singers: Almost all of them including Barbra Streisand, were smart enough to write some hits of their own. And if they didn’t, like Bette Midler and Cher, they made their stage show a central source of income. One reason Mariah Carey has not had to tour extensively is that she has her name on dozens of hits.

It’s kind of surprising that Houston fell into this trap. She’s watched both her mother, Cissy Houston, and cousin, Dionne Warwick, neither of whom wrote their own hits, tour endlessly every year and work to keep up with their expenses. You’d think she would have learned something from their experiences.

What’s evident is that through the years, Houston has had inadequate advice and counsel. Depending on just record sales to get her through bad times was a mistake. While Houston had many bestsellers, they are well in the past. Simply singing a hit record is not enough if you’re not going to save your money. The real profit in the music business comes from touring and publishing. Houston has toured very little in her career. And with no songs on her resume, she has no perennial moneymakers on which to rely, like Carey’s “Vision of Love” or Madonna’s “Like A Virgin.”

So Whitney, with dozens of dependents and no income, is indeed broke. News reports claimed she got a $100 million recording contract from Arista Records in 2001. In reality, she received a $20 million advance. Take half off from taxes, it’s $10 million. Another $2 million might come off in fees. Then deduct the costs of her 2002 flop album, “Just Whitney” — which sold just 540,000 copies — and her 2004 Christmas album, now ranked on amazon.com at 68,000. Suddenly, it’s not so much.

And that doesn’t take into account her notorious lifestyle. And I’m not talking about the first class airfare, the nice cars, clothes or jewelry. Houston has frittered away millions of dollars living on the edge and being irresponsible. Had she not entered into a spiraling down world of drug addiction, and kept recording and touring, she would be —at age 42 — a very wealthy woman with a reputation as the best singer of her generation. That none of that has come to pass is shameful.

Houston’s next big problem is going to be with Child Protective Services in Alpharetta, Ga. Even though Bobbi Kristina lives away from home, there will no doubt be a new investigation based on the "Enquirer" story. If 50 percent of the report is deemed true, Houston and Brown could easily lose their daughter for good. One wonders if that will be enough of a wake up call for the singer who once represented the best of America’s youth.