The encyclopedia · Product & Design · Financial decision · 2001–2002
EMI paid Mariah Carey $28M to go away one album into a $100M deal
Virgin signed Mariah Carey to a multi-album deal reported at up to $100M in April 2001; nine months and one flop later EMI paid her $28M to end it.
EMI Group · 2002-01-23
What happened
In April 2001 Mariah Carey left Sony's Columbia Records for Virgin, part of EMI Group, in a multi-album contract reported at $80–100M — among the largest recording deals ever signed. The launch was built around Glitter, a film in which Carey starred, with its soundtrack as her first album under the new deal.
Both flopped. The film, made for $22M, grossed $5.27M worldwide, $4.27M of it domestic. The soundtrack had sold 501,000 copies in the US by the time EMI acted — Carey's weakest result after a decade of multi-platinum albums at Columbia. On January 23, 2002, EMI announced it would pay Carey $28M to terminate the contract, calling it 'the most prudent course of action for EMI.'
EMI booked that cost, together with $26.4M of balance-sheet and other write-offs linked to the deal, as exceptional charges in its accounts for the year ended March 31, 2002, and warned annual profit would fall 20%. The advance paid at signing — reported at $21M — stayed with Carey. The label had paid to sign her, paid to make her film, and then paid for the right to walk away.
Why it happened
- EMI priced the deal on Carey's Columbia track record — a decade of multi-platinum albums — and paid for that trajectory up front, before any new release had tested it.
- The deal tied the label's money to a film debut as much as to records: when Glitter failed as a movie, the album lost its engine, and both fell together.
- With the contract's remaining value far above any plausible return, paying $28M to stop was cheaper than honoring it — the bill was the deal itself, not the breakup.
The lesson
Pay for the next album, not the last ten. EMI priced the deal on Carey's past decade and front-loaded the money; when the first release flopped, it paid to sign and again to leave.
Sources
- EMI dumps Carey with $28m payoff — CNN (Jan 23, 2002)
- Virgin Records pays Mariah Carey $28 million to end contract — AP via Quad-City Times
- Glitter (2001) — budget $22M, worldwide gross $5,272,594 — Box Office Mojo
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