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Bieber will make $80 million upfront for his tour this year
Justin Bieber, Venture Capitalist: The Forbes Cover Story
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One can forgive him for the victory dance. Since his debut three years ago Bieber has sold 15 million albums, grossing $150 million on 157 tour dates across two dozen countries along the way. His biopic, Never Say Never, pulled in $30 million on its opening weekend, just shy of the *concert-film record, and racked up $100 million at the box office in total. His fragrance, Someday, debuted last June and did $60 million in retail sales during its first six months on the market. Those income streams helped Bieber personally earn an estimated $55 million over the past 12 months and $108 million over the past two years.
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Bieber’s tech savvy infuses more than his music—it’s also a core strategy for how the entertainer intends to translate all that fame and fast money into enduring riches. Instinctively, he embraces a Peter Lynch model of investing—“I’m not going to invest in something I don’t like; I have to believe in the product”—but rather than load up on buy-what-you-know value stocks, the singer has been quietly plowing millions into private tech startups. According to his manager, Bieber holds stakes in a dozen such companies.
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With such social media dexterity Bieber has built himself a formidable platform. The 30-year-old Braun’s challenge: sustaining the phenomenon. In many ways Bieber and Braun are the most intriguing talent-manager combo since Elvis and Colonel Tom Parker.
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In a typical Bieber deal he’ll put in about $250,000 at the favorable pricing generally reserved for smart money—the kind of strategic partners that help a company long term. Braun won’t disclose the size of Bieber’s portfolio but says it’s between 2% and 5% of the singer’s net worth. FORBES puts Bieber’s fortune at about $80 million, which translates to somewhere in the ballpark of $3 million in venture investments.
There will surely be more loot to put to work. This fall Bieber embarks on a yearlong tour, hitting every continent but Antarctica; promoter AEG Live has guaranteed him $80 million for 125 concerts. Anyone who sees Bieber as a fad should take note of that deal. “He’s not just an American domestic phenomenon, he’s a worldwide phenomenon,” says Randy Phillips, AEG’s chief.
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Some compare this blueprint with that of another Justin—Timberlake, a crossover former boy-band star with venture capitalist proclivities. Similarly Bieber is taking acting more seriously, planning to costar with Mark Wahlberg in a basketball flick next year. But Bieber maintains there’s only one role model: Michael Jackson, who converted child stardom to icon status. Inspired by the King of Pop’s largesse, he says he includes a charitable component in every deal. “People were fine with buying 20 CDs from Michael Jackson because he went and did good things.”
It’s no coincidence that Bieber went with AEG’s Phillips, a longtime Jackson partner, to promote his tour. The same goes for his choice of Jerkins as an album producer. The first day Bieber went to the studio, Jerkins played him footage of Jackson in the recording booth; Bieber watched it twice. “There’s something about Justin, he has this effect that reminds me of Michael,” says Jerkins. “It’s not just music, it’s everything—it’s his spirit, his personality.”
And why not? Jackson was the genre-defining star of his generation’s media breakthrough, MTV. Bieber has a legitimate claim on the social media crown. And just as Jackson’s bankruptcy-staving investment was the thing he understood best—the Beatles catalog—perhaps someday Bieber will live well not from the songs he sings but the assets they let him buy into.
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