'American Idol' Winner Faces Mountain of Money | Or Does He?

‘American Idol’ winner under contract

The “American Idol” winner, and probably the runner-up too, most likely have buckets of cash in their futures. They just have to play their cards right.

The catch is, Forbes reports that the contracts that the show’s creator locks contestants into are not ideal, and the company takes a much bigger cut than a company giving a quick payday loan.

Money problems

Anyone who competes to be the “American Idol” winner on the show, regardless of how far along they get, must sign a contract saying that Simon Fuller’s company, 19 entertainment, has “first dibs on signing them to recording contracts, which though famously secretive are widely regarded as the stingiest in the music industry,” according to Forbes.

Fuller also gets a cut of every CD, endorsement, TV, movie or T-shirt bearing the likeness of his Idol charges. (Fuller’s 19 Entertainment was bought out in 2005 by CKX for $174 million in cash and stock.) While managers traditionally enjoy a 15% or so cut of a performer’s contract, 19 Entertainment reportedly takes as much as 50%.

Breaking away

Many previous “American Idol” winners have discovered that their record contracts were, indeed, not to their liking. One contestant, Mario Vazquez, even bailed on the show after becoming a finalist because he thought he’d be better off without the “American Idol” machine.

After Kelly Clarkson’s first album,” Breakaway,” went mutiplatinum she severed her contract with 19 Entertainment. Clarkson would still be rolling in the dough if she’d kept her contract, what with her endorsement deals with Ford, Proactiv, Vitamin Water and Candie’s. ... click here to read the rest of the article titled "'American Idol' Winner Faces Mountain of Money | Or Does He?"