It's not been a good few weeks for Elton. Perhaps the longest bad hair day on record.
First, he's accused of withholding tax information from his charity AIDS Foundation by a U.S. pressure group, then his debts become public knowledge as someone breaks their confidentiality, then he fails to make it to Posh Spice's wedding, and finally we learn the man's suffering from sun-stroke and cancels European shows.
And all within the span of 14 days! Truly of Herculean proportions!
It's almost as though someone's placed a jinx upon him. And let's face it: there are several souls who might envy his opulent lifestyle.
But while some Elton fans have complained bitterly that Elton's sun-stroke - however serious - was a self-inflicted condition brought on by carelessness, what do we really know about how Elton's found himself a pauper in his palace?
I'll try to find some of the pieces, but don't profess to knowing his bank balances! Here goes.....
FIRST THE FACTS:
The story broke in London's Sunday Times newspaper on June 27, 1999, and almost immediately was picked up by the truly respectable end of the media chain, the financial newswires such as Agence France-Presse, that day. What's more, Elton's legal adviser and business manager Frank Presland presented a statement defending the action rather than denying the story.
Elton is reported to have approached financial house Samuel Montagu (owned by HSBC Bank, who also owns high-street bank Midland) to facilitate a loan of $40 million - that's about £25 million. The Sunday Times does not disclose its sources within London's financial district.
In return for a loan, Elton agrees to sign over royalties from his awesome back catalogue, 1969 to 1974, to finance interest payments and pay off the debt.
Should he slip up, the newspapers say, he will also allow Samuel Montagu to claw his royalties from future albums too. And if that's not enough, Elton's also throwing in further protection (known as collateral) for the lender - his four homes: one each in London (worth £750,000), Windsor, Atlanta (worth £1.2 million) and Nice.
So, with Elton already generously agreeing to waive entitlements to royalties from singles and concerts in favour of his Elton John AIDS Foundation (EJAF), he risks becoming penniless in cash-flow terms, and also homeless!
SECOND THE MYTH:
Some fans have written to me worried poor (!) Elton might owe money to the EJAF or the Diana, Princess of Wales Memorial Fund by using funds and planning to pay for them later. The fans' only evidence here is that it's gone a little quiet on any payments to the Diana fund since an initial £20 million was funnelled through in 1998.
Another scenario is that it's all part of raising money for his court case against former advisers which I amplify later on. Or his film projects, etc., and that in reality, he just has a temporary cash shortage.
Like the EJAF allegation above, this is unlikely. David Furnish's Rocket Pictures plans to work in consortium with other agencies or financiers to raise cash.
THIRD, THE ANALYSIS:
Some press have compared Elton's cash call to that by loan pioneer David Bowie, who two years ago took a loan from a US investment bank in exchange for back catalogue and future royalties and produced the so-called "Bowie Bonds" which other investors can buy if they have faith in his record sales continuing to do well. The issue raised £35 million.
The press have also compared the deal to a loan negotiated by Elton's friend Rod Stewart, and that of band Iron Maiden, which also involved bond issuance.
But in all cases...the press have confused Elton, who has an estimated wealth of $256 million (£160 million) according to the venerable Sunday Times' annual Wealthiest People Survey, with artists who have much smaller wealth bases and smaller earnings too.
Hence, the fact that Elton is asset-rich but cash-poor should worry any money-prudent fan.
And don't forget, the other artists all raised loans as a kind of lock-in capital against future fading sales success. With the best goodwill in the world, no one can seriously claim Bowie will generate the same album sales in future years on new recordings as his back catalogue still maintains today.
Elton, on the other hand, is both recording successfully and also touring extensively - although that itself is described by some fans as Elton taking advice from his accountants to generate more much-needed income. And his health is bound to suffer from all that one day!
The Sunday Times estimated Elton's income in the five years to 1996 at £131 million. That's £82 million, paying himself £16.4 million a year. We've reported Elton's vast earnings capacity from US concerts in 1998. However, with money handed to the AIDS Foundation, it would appear that Elton doesn't benefit much himself.
It suggests Elton isn't locking in capital like Bowie or Stewart, but sorting out immediate debts, like the papers say.
He is reported to have a £7 million overdraft with a British High street bank and a £4.7 million loan in the United States. Hazarding a guess here (since Elton was exposed in the press in 1998 banking with Coutts & Co, the respectable celebrities private banker, and banker for HM The Queen) it's very possible that the UK debt is there. Coutts is owned by High street bank National Westminster PLC.
I have noticed that Elton is wearing the same old costumes at certain shows.
At 52 years, Elton's not yet acting like a pensioner who doesn't think he'll need any new best outfits because someone's reserving him a place in the eternal sky.
He's still a top performer in the public gaze. Yet, some of his costumes - such as those in the AIDA album press call - have been seen elsewhere. Some of those outfits are so unusual that it's easy to be sure it's the same garment!
Could this be the economy of an Elton short on cash?
It's certainly at very least a nasty coincidence that Elton's loan application comes just weeks after he began proceedings in London's High Court against his former advisers and accountants for an alleged £20 million deficit from his business empire.
Some fans have brushed off Elton's spending sprees as just his new addiction after he conquered drugs and booze in 1991.
It's easy to think Elton's just extravagant. Elton's spending sprees are nothing new (witness a fine documentation in Philip Norman's 1991 biography Elton).
The examples of excess included the following:
Elton dressed as the Sun King Louis XIV for his 50th birthday party, reportedly wearing a £50,000 costume with an ostrich-feather train, topped with a huge, £3,500 wig.
Reportedly, Elton's acquired homes he's never lived in such as a £1.5 million Chelsea, London pad later sold; a fleet of 20 cars he hardly ever drives; jewellery and CDs ('he can go through Cartier with a shopping trolley'); a recent passion for porcelain collecting; purchases including a model dinosaur and real imported double-decker Tram in his £4 million Windsor estate comprising five gardens; and selling out of Watford Football Club in 1987 to George Pechiney for a fifth of the money it's taken him to buy back in!
It's fun to recount thousands more stories of expansive expense - some of which are unsubstantiated - but I think you have the general idea.
In early 1998, a zealot who defied John Reid Enterprises' "security" - one Benjamin Pell - was able to rake bin liners in the courtyard of management's offices and...UK newspapers blazed with stories about £500,000 spends on plastic in one day, a fleet of cars, and a £5,000-per-week allowance to each his ex-wife Renate Blauel and mother Sheila Farebrother.
The reports also stated Elton's then-accountant Price Waterhouse Coopers advising that if Elton didn't curtail spending and boost income from more concerts and other revenue generating initiatives his finances could collapse in eight weeks. Elton's two main companies (Happenstance and J Bondi) were reported seeing earnings down from £35 million in 1996 to £6 million in 1997 - the year of the all-time landmark song Candle in the Wind 1997.
This year, Elton launched a legal case against former accountants Price Waterhouse Coopers, and Andrew Haydon, former managing director of John Reid Enterprises, which had been his management company. All are defending the action.
The fact that incumbent manager Presland went about sparingly explaining what the loan's for didn't help matters much, I guess.
He could have been more clear about things, and everyone would understand. But to suggest Elton has to put up his most valuable asset (catalogue) to pay his bills and debts suggests some serious problems.
So we all wish Elton a good financial health as well as recovery from sun-stroke. At least that is what we have been told it is. Perhaps it more than anything proves one thing: it is better to invest in one's health than worry about cash.