The world loves a good rags-to-riches story, but what about when the story goes in the opposite direction? This fate was once the backstory for the popular girl group TLC.
TLC was named for the group members Tionne “T-Boz” Watkins, Lisa “Left Eye” Lopes, and Rozonda “Chilli” Thomas. The three women officially hit the scene after the release of their debut album in 1992.
However, the success of their sophomore album “CrazySexyCool” in 1994 would really launch them into superstardom.
That album had chart-topping hits such as “Creep,” “Red Light Special,” and the iconic and crossover hit “Waterfalls.” The women would go on to earn two Grammys in 1995, becoming the first girl group at the time to reach diamond status in album sales.
And while some may not have imagined the success of that album, the group members understood they were creating something unique.
“We went in letting producers know that this was the name — and that’s how the album should sound,” Chilli said in a BBC News interview.
“CrazySexyCool was our version of ‘I’m Every Woman.’ Every woman has a crazy or a sexy or a cool side. You can be all three, but one is definitely more prominent than the other.”
With so much critical acclaim, one would think the cosmos were tipping everything in their direction. However, the success of the group’s music did not translate to their real lives.
In 1995, TLC filed Chapter 11 Bankruptcy after accumulating mounds of debt which is believed to be the result of their contract with LaFace and Pebbitone.
During a 1996 interview after winning two Grammys, group member Chilli stepped up to the mic with a candid and direct declaration. After listing some of the group’s success, mainly related to “CrazySexyCool,” she gave a blunt statement no one was likely expecting.
“We’re as broke as broke can be,” Chilli declared.
But with so much success, how did the ladies find themselves facing financial woes?
According to a 1996 report from The Los Angeles Times, TLC’s initial contract stated the group would earn about 7% of every album sold. Conversely, that earning was impacted by reimbursing the record company’s expenses such as studio and video production, promotion and tour support, and early advances before record sales.
After these expenses were paid, TLC would only make about 20 cents per album sold, having to split that among all three of them.
Per The Los Angeles Times report, the group only received about 1% of the estimated $175 million album sales the trio earned at the time.
And while this reality was in their contractual agreement, T-Boz notes that they weren’t aware of all the financial implications.
“Everybody treats us like stars now, except our own record company,” she said. “When we signed our contract, we were under the impression that if we sold a bunch of records, they would give us a better deal. No matter how many records we sell or awards we win, they just treat us like dirt.”
The group’s bankruptcy was met with an extensive lawsuit. However, after a year, the group, their management, record, and production companies settled.
Based on a 1996 report from The New York Times, the settlement agreement “provided for a direct recording contract between the trio — Lisa Lopes, Tionne Watkins, and Rozonda Thomas — and the record label, LaFace, for an undisclosed number of albums.”
And while confidentiality clauses were a part of it, the settlement also released everyone from their contractual obligation with Pebbitone.
The attention to the case due to the group’s success and production/managerial popularity made TLC’s financial fate a cautionary tale for others in the industry. Even though the group was concerned about the future of their finances, they were also worried about how this would impact their legacy.
“I hope we go down in history for being something more than just another famous act that got ripped off,” Left-Eye said in the LA Times report. “It’s hard to believe that a group can sell 14 million records and still be treated so badly. But guess what? This is a cutthroat business full of greedy individuals who take advantage of naive young artists.”
Since the case, the group has recovered. In 1999, TLC went on to release “FanMail,” debuting at No. 1 on the Billboard 200 chart.
Today in 1999, TLC's 'FanMail' debuted at #1 on the Billboard 200 with 318,000 sold.
— chart data (@chartdata) March 14, 2018
And while the group lost Left-Eye in a tragic accident in 2002, the remaining two members, Chilli and T-Boz, have bounced back from their financial troubles.
AfroTech previously reported that the ladies have a combined net worth of $9.5 million and are actively involved in separate business endeavors outside music.