Forbes named Rihanna as the richest female musician in 2021. The Umbrella singer has a massive net worth of $1.4 billion as of 2022. She’s definitely put in impressive amount of work work work work work to accomplish her success.Aside from her decades long music career with tons of chart topping hits, her wealth skyrocketed in the last few years thanks to her business empire. The songstress turned entrepreneur stopped releasing songs years ago to concentrate on her billion dollars worth business.There is no doubt that she’s one of the most famous and adored singer in the music industry, but most of her wealth came from her business ventures. With all the enormous wealth she currently owns, not everyone knows that she almost faced bankruptcy. She seems like the prudent type, so how did she end up on the verge of bankruptcy?
Rihanna’s Career Prior To Facing Bankruptcy
The Barbadian singer started her music career as early as 15 years old. She performed for the music producers Evan Rogers and Carl Struken in 2003 which started her career.
Two years after, her debut album titled Music of the Sun was released by independent record label Def Jam in 2005. At the time, Jay Z was the CEO of Def Jam, and he was the one who signed her for the record label.
As soon as Rihanna released her first album, she gained recognition. Her album debuted on the Billboard 200 at No. 10. It also received a gold certification from the Recording Industry Association of America (RIAA) and sold over 2 million copies. Despite releasing her first album, she did not gain tremendous popularity in the music scene until 2007.
Rihanna who's good friends with Nicki Minaj had a breakthrough in the music scene after releasing the album Good Girl Gone Bad in 2007. Her lead single Umbrella topped the charts immediately after release and was at No.1 for consecutive weeks.
Her net worth soared high that same year and was able to accumulate net worth of over $50 million. But two years after, she almost lost it all.
That One Mistake That Led To Rihanna Facing Bankruptcy
The Love The Way You Lie singer started the year 2009 with about $11 million in bank. However, according to Business Insider, she ended the year with about $2 million despite continuously working. The decline in Rihanna's wealth was due to a single mistake that led to her losing millions. The singer apparently trusted two accountants to manage her finances.
The mistake of the singer in trusting her former accountants to deal with her finances led to her massive loss. The singer who had world records hired New York-based Berdon LLP to deal with her accounting and little did she know that she’s been losing millions.
As her accountants, the firm should know the business dealings she needed to make more money. Instead of carefully looking into ways to make more money, the firm overlooked the fact that Rihanna’s losing money on her activities.
Rihanna realized that she was losing money despite the positive numbers of earnings on each tour. It was reported that she lost millions as the expense for her 2009 Last Girl on Earth was way more than her earnings.
Failure of the firm to advice her to cut down on expenses for the tour resulted to a massive decline in her wealth. The singer later on sued both accountants and the firm Berdon LLP for unacceptable bookkeeping practices, keeping an enormous amount of profits and not appropriately filing her taxes.
The singer hired the accountants way back 2005 at the age of 16, when she’s still starting in the music industry. She then fired them in 2010 upon learning that she’s already lost millions. Not only did she lost millions, but she had to pay penalties to the IRS since her taxes were not correctly paid due to the firm’s negligence.
The Aftermath: Legal Battle Between Rihanna And The Firm
Rihanna, whose real name is Robyn Fenty, filed a lawsuit against the firm in Manhattan federal court using her real name. She filed the case through her lawyers and claimed that the firm took millions of her earnings. The said firm allegedly took huge amount of profits from both her international and national tours over the last five years.
To further prove the bad bookkeeping by the company, Rihanna released the numbers for her 2011 Loud tour where it was clear that her tours are earnings huge amount of money. The net profit for the said tour amounted to about 40% of the total revenue of the tour. This is definitely not one of those baseless Hollywood lawsuits since she has solid grounds for the case.
It was also disclosed that the firm was taking about 22% of revenue from the tour and only giving the singer about 6% cut. The alleged percentage commission was not normal in any accounting practices and that the accounting firm’s fee on the gross tour was excessive. Thankfully, Rihanna was able to prove mismanagement of funds and eventually won the lawsuit against the New York based firm. She came out to win about $10 million of settlement in 2012.
