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THERE IS NO FORMULA FOR DETERMINING what an "American Idol" finalist might earn after the show ends.
Conway native Kris Allen has developed a solid fan base during his time on the reality television show that airs on Fox, so solid that he has made it to the face-off finale, duking it out with punk-glam-goth rocker Adam Lambert (Simon Cowell's obvious favorite).
On Allen's return to central Arkansas on May 8 to tape a "hometown" segment for the show, swarms of Arkansans gathered at Little Rock's Riverfest Amphitheatre and in Conway's downtown to welcome the state's newest celebrity.
While Allen is suddenly a recognizable name, several wealth management experts and others involved in the entertainment industry said determining what riches lie ahead for Allen was a very imperfect science. Some "American Idol" contestants, like the first season's winner, Kelly Clarkson, have gone on to great success. Others, like season two winner Ruben Studdard, have not sustained their popularity since leaving the television show.
A talent management company based in London has the first right to sign any of the top 10 finishers in any "American Idol" season. The management company, 19 Entertainment, retains the rights to much of what contestants accomplish. The company also organizes an annual "American Idol" Tour, which will stop at the Alltel Arena in North Little Rock on July 25.
While 19 Entertainment might determine Allen's early career, many of the successful Idols severed ties with the agency within a couple of years, according to published reports.
Look to the Past
There are only a small number of Arkansans who have quickly risen to the top of their fields in recent years. Athletes such as former Razorbacks Darren McFadden and Felix Jones come to mind, as does boxer Jermain Taylor. And Korto Momolu's second-place finish in the fifth season of Bravo TV's reality show "Project Runway" has given a boost to the designer.
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The first advice Momolu would give Allen is "get a new phone," she joked. Allen's old phone will ring non-stop after the show ends, if it already doesn't, she said.
The exposure from "Project Runway" has opened up many avenues for Momolu, who was born in Liberia, studied in Canada and now resides in Little Rock.
"Life is never going to be the same," Momolu said. "And he's a rock star, so it's even worse for him."
Momolu said she currently works with many of the same business managers and agents she worked with before her stint on "Project Runway." Many of the people helping her with her career do not live in the area, though. Momolu did not discuss how much money she has made from the exposure.
"You have to deal with people who know the business," she said. "I live in Little Rock," she said, but her representatives do not.
Agents need to be where the business takes place so that they can pitch ideas for those they represent, Momolu said. The exposure Momolu received from her time on "Project Runway" has also gotten the Arkansan thinking about expansion.
"At some point I'll need to get an agent in Europe," she said.
The recognition has suddenly provided Momolu with credibility. When customers formerly questioned the price tag on a garment, they now recognize her brand.
"It's definitely a plus because you are not so much of a struggling artist anymore," she said. "Now they know the worth; they trust it."
Her name also opens doors suddenly.
"Now the doors are open when I get there, because I'm usually invited," Momolu said. "Before it was, 'Who are you?' I was just another designer in a pool of designers."
Keep It Close
Managing Jermain Taylor's finances has fallen to Andrew Meadors, Taylor's business manager and a partner in the Little Rock insurance firm Meadors Adams & Lee Inc. The two paired up shortly after Taylor boxed in the 2000 Olympics.
Meadors was reluctant to speculate about how much Allen might stand to make off his sudden fame. The music and sports businesses are different, he said, so it would be tough to draw from past experiences to predict Allen's future.
The opportunity to enjoy such recognition and the financial rewards that will likely follow should not be squandered, Meadors said.
"I would just say that fame like this is very fleeting," Meadors said. "When you are in the middle of it, you truly think it will last forever. My advice would be to enjoy it now and put the money away."
From the business standpoint, Meadors emphasized that Allen should grow the local fan base.
"Even if it's not the most financially viable thing to do, still come home to play," Meadors said. Taylor famously fights in trunks with "Arkansas" emblazoned across the back. "Always show appreciation for your home state."
People who experience a sudden jump in income often follow the same pattern, Brian Curry, a certified financial planner with Ameriprise Financial in Little Rock, said.
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"First they say they will manage the money well," he said. "But soon after that they start making rash expenditures, thinking the money will continue coming in."
Managing sudden wealth requires a small team, Curry said. A person should hire a financial planner to manage and expand the wealth, one or two attorneys to manage contracts and other legal issues, and, perhaps most importantly, an accountant.
It's important to hire "an accountant. For someone who has an income spike like that, you cannot underestimate the amount of taxes you're going to pay," he said.
Previous clients who have received a windfall have often made the mistake, despite warnings, Curry said.
Management
However, management of "Idol" contestants is basically established from the beginning, and doing well on the show does not mean large contracts will follow.
19 Entertainment manages the fortunes of many Idols after the show ends its run.
"Like all the other contracts associated with Idol, how much the performers are paid for these gigs is top secret. It's likely not much. Some critics speculate it's on the order of $5,000 a night. (Performers reportedly face $5 million fines for any leaks to the media about their compensation)," according to a 2007 Forbes.com article.
Many of the past winners have severed ties with 19 Entertainment quickly after leaving the show. Clarkson, the first winner, split with 19 Entertainment after releasing her 2004 album "Breakaway," which went triple platinum. She also has refused to give "American Idol" permission for contestants to sing her songs. Season two's runner-up, Clay Aiken, has also ended his contract with 19 Entertainment.
Arena officials expect the "Idol" Tour--with Allen--to attract more fans this year than in the past. The tour has stopped in Arkansas three previous times, Jana DeGeorge, the arena's director of marketing, said. The first three instances did not sell out.
"This one is selling really well," DeGeorge said Wednesday, the night "Idol" went from three contestants to two finalists. "We could sell out, depending on the vote tonight. I think we have a good chance." And, as noted, the voting did go Allen's way.
Booking the tour is always on the arena's radar, DeGeorge said. As this year's "Idol" progressed, Michael Marion, the arena's general manager, began pursuing the tour more earnestly, DeGeorge said.
"When we found out that Kris had definitely made the top 10, Michael was on the phone with the promoter," she said.
And should the newfound attention prove overwhelming for Allen, one other Arkansan might be able to give him advice on how to navigate the world after reality TV stardom.
"I'll put the word out that he can call me and I'll point him in the right direction," Kortu Momolu said.
He'll have to call Momolu's assistant first, though. Momolu makes sure her calls are screened now.
By Mark Hengel
mhengel@abpg.com
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