A lot has changed for the reality TV dynasty over the last few years. But as hard as the Kardashians work at staying famous, they’d better be moving a lot of cash into the family trust funds where reporters can’t spot it.
The Trust Advisor inadvertently launched an entire genre of celebrity journalism a few years ago by digging into exactly how much cash the Jenner-Kardashian dynasty put on the table when mom Kris and then-dad Bruce filed for no-prenup divorce.
Since then, everybody from Forbes on down has spent a lot of time trying to crack the family’s financial shield as Bruce becomes Caitlyn, Kim and Kanye get married and the cameras keep rolling.
But everyone’s hitting a strong enough wall that the best they can do is report that even though incoming cash flow is increasing, the family wealth seems to be decreasing.
Beware of estimates
The best educated guesses around the Kardashian-Jenner collective fortune have come down by about 20% over the last two years, dropping about $25 million from 2013 to about $101 million a few months ago.
It seems crazy when the family is firing on more cylinders than ever.
Kris has signed a $100 million contract on behalf of the entire family to keep the reality shows filming for the next four years. And the endorsements and side projects multiply from day to day.
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None of it seems to be making a positive dent in the numbers. From all appearances, they may still be running on fumes.
Part of the problem, of course, is that a lot of the people speculating around the family always had a tough time distinguishing between earnings power, actual income and net worth.
For example, Caitlyn’s hypothetical per-appearance earnings power has quadrupled since the gender transition, but that doesn’t mean she’s making four times as much as she did when she was Bruce.
The reported numbers tend to be the top of the range, more like asking fees than actual checks for the family to cash.
And even the asking fees for most of the Kardashians have actually come down over the years. Kim’s top rate was reported at $250,000 in 2011. More recently, she’s generally booked $50,000 per paid nightclub visit, when the owners pay her at all.
Maybe she’s doing double the club nights now and making it up in volume, but as a very pregnant mom with a toddler at home, it’s kind of unlikely.
Whatever asking prices we’re working with, they probably don’t translate into a significant multiplier in terms of income, much less net worth.
A lot of the money flowing into the family goes back to mom Kris, who takes 10% off the top as manager in addition to her own slice of the collective contracts.
While that money technically stays in the family, it doesn’t exactly smooth the costs of the kids’ separate households or exuberant lifestyles.
The best numbers I’ve seen make me think the burn rate has run hotter than the family’s cash flow over the years, which says something about the extravagance of the lifestyle, the exaggeration on the income side or both.
Each of the four Kardashian kids might have inherited $25 million apiece in trust from their high-powered dad. If they’re only worth that much now, all the hyped-up ventures and publicity have only kept the wheels spinning.
Any less, and they’re actually getting poorer.
Meanwhile, the S&P 500 has lurched 23% higher since the last time I checked the estimates, which means that if the Kardashians quit working and simply lived on passive index fund income, they’d be ahead of the game.
Maybe the endorsements and entrepreneurial ventures will pay off big in the long term. In the meantime, they don’t seem to be bumping the net worth much.
And so like a lot of professional celebrities, they keep working.
Playing the uneven split forward
That said, the Kardashians are familiar with the inner workings of trusts, so they know how to keep money off the radar.
A lot of the funds may be sliding into a web of shell companies, deferred interests and, yes, trusts designed to keep the real wealth building even if the surface numbers are stalled or even going the wrong direction.
The cash is there when they need it. In the meantime, they enjoy a little privacy when it comes to their actual financial heft remaining a mystery where casual gossip is concerned.
That’s one of the classic advantages trusts provide. If the estate tax goes away, it may become one of the top reasons rich families sink their money into these vehicles.
Either way, the family is going to need to wrestle with whether the next generation will accept extremely divergent stakes in the family business.
All four Kardashian kids started on equal footing. But at this point Kim seems to have amassed a fortune triple or even four times what either of her sisters or brother Rob are reportedly worth.
That could be because she inherited a stronger entrepreneurial gene than any of the siblings, let alone the Jenner kids. But it’s unlikely that everyone’s going to see it that way.
Kris has steered a lot of the sweetest deals Kim’s way. We’ve also heard rumors that she hid a lot of her own net worth in Kim’s accounts in order to shield it from the division of assets when she and Jenner split.
If $20 million or so isn’t enough to support Khloe, Kourtney or Rob perpetually in the lifestyle to which they’ve become accustomed, there’s going to be blowback when it’s time to carve up the family assets.
Did all of the kids get the same chances? Did they all work equally as hard? Unless Kris used an objective standard as she divided the big paychecks – effectively treating the kids like employees – it’s really her word against theirs.
Either way, five Kardashians and several Jenners is a lot of celebrity lifestyle to support even on equal shares.
The $100 million contract the family just signed to extend their show will pay out over four years. Kris gets 10% off the top, so we’re really looking at $22 million a year coming in from TV.
Divide $22 million a year by all those kids, a suddenly empowered Caitlyn and the Jenner girls and you’re not looking at a whole lot of cash flow per person.
That leaves the various side businesses to pick up the slack. Maybe all the clothing lines and cosmetics and socks and iPhone apps are generating massive dividends and the kids are all getting richer.
I’d like to think so. Because otherwise they work awfully hard at having a good time, and the trust funds don’t seem to be growing.
