The Year the Bubble Burst: How 2001 Mega Contracts For Whitney Houston and Mariah Carey Signaled a Shift in the Music Business

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In 2001, WhitneyHouston and MariahCarey both signed new recording contracts worth upwards of $100 million, signaling a shift in the music business.

where Carey crashed the set with an ice cream cart, did an impromptu striptease, and went on a discordant rant about therapy, prompting host Carson Daly to remark, on camera, “Ladies and gentlemen, Mariah Carey has lost her mind.”

At the same time, EMI Group announced a new chairman for their music division, Alain Levy, brought in to stop the label’s eroding profit margin. As part of his house cleaning, he fired the executives who brokered the Carey deal, then terminated the contract before it was even a year old. Virgin’s price to make the break quick and smooth was $28 million dollars, on top of the $21 million advance Carey had already received at signing.

Carey’s next contract, signed later in 2002 with Island/Def Jam, was valued around a much more modest $20M for three albums through her own imprint. The second album in that deal, 2005’sfeat to her accolades, as “We Belong Together” ended up the longest-reigning Hot 100 No. 1 single of the 21st century to that point with its 14-week run on top.

Erratic behavior from mega-stars wasn’t a new or novel thing, and Houston had been making both tabloid and regular news for years with then-husband Bobby Brown. But a new pattern was emerging by 2001; Whitney had canceled some domestic dates during her 1999 My Love Is Your Love World Tourincluding a show in her hometown of Newark after concert goers were already in seats, raising concerns anew about her health.

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