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People Top 5
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- September 07, 1992
- Vol. 38
- No. 10
Hard Times in Wayne's World
He Earns Millions a Year, but Wayne Newton's Shaky Investments and Dogged Pursuit of the Good Life Have Left Him in a Financial Mess
In some ways, news of Newton's woes is simply bewildering. As its resident star, the 50-year-old showman is to Las Vegas what Mickey Mouse is to Disneyland. Every night for five months each year, the man once called the highest-paid cabaret entertainer in show business leaves his desert estate and drives past Wayne Newton Boulevard to the Vegas Hilton, where he earns $250,000 a week belting out old hits like his 1963 "Danke Schoen" and crusty standards like "Lazy River." Add to that his private bookings (to the tune of $100,000 to $200,000 a gig), club dates, concert tours, occasional TV and movie appearances, plus one of the leading horse-breeding stables in the country, and you have one man who seemed destined never to clip grocery coupons.
How then to explain his woes? "My major mistake was trusting people I shouldn't have," says Newton. "And if that is my major crime in life, then I accept that." He is less accepting when citing "former business management" that, he says, failed to keep his bills paid and him informed. "Then the legal industry gets a hold of this," he says. "So you're sitting here with a great number of pending lawsuits, and it doesn't matter at that point whether you're right or wrong. Defending them will absolutely make you broke."
Add to Newton's misplaced faith a collapsing real estate market, disallowed tax shelters and, say some who are close to the singer, an interest in the fast buck rather than in playing it safe. Entertainers with their glitzy lifestyles "are often looking for sizzle, for the hot deal," says Dan Genter, a former Newton investment counselor. Plus, "Wayne's like a lot of guys," says the manager of another former Vegas headliner. "It doesn't matter how much money they earn, they spend it."
In Newton's case, he spent most of it on land. "I'm a land nut," he once said. "I don't know why. When I see 18,000 acres for sale, I want to own it." And that's how the trouble began.
Betting I hat the Pennsylvania legislature would permit casino gambling in the Pocono mountain resort area, Newton took a loan from the Northeastern Bank of Pennsylvania and other financial institutions in 1982 and bought an interest in the Tamiment Hotel. But the legislature said no to casinos, the real estate market began losing steam, and a series of mild winters kept skiers away. Newton sold out in 1989, but because his financial situation was already precarious, he did not repay the bank. According to bank officials, the loan was restructured several times, with Newton making payments "off and on." Finally, last November, the bank demanded full payment. When lengthy negotiations failed, the bank filed suit to collect $7.4 million plus interest (about $2,000 per day) and legal fees.
Other claimants followed suit. According to court papers, Newton owes $1.2 million to General Electric Credit for a plane he once owned, more than $300,000 in legal fees, and $13,000 to American Express. There are also debts of $341,000 in back taxes to the IRS and smaller amounts to everyone from the local florist ($15,000) to the farrier who shoes his Arabian stallions.
Some of Newton's creditors have been understanding. "We don't have any quarrel with Wayne," says Bill Heskett, senior partner of a Pawhuska, Okla., law firm that is owed nearly $64,000. "I know he's had problems, and he's trying to work those out. He'll pay us if he can."
"When one of my children was sick, Wayne had him flown in his plane to the best hospital in Houston," says Newton's head horse trainer, Alfredo Ortega, who is owed more than $13,000. "So when I see him, I'm going to call his debt to me even."
Others, though, are far less forgiving. At the Fabricare Cleaners, the owner, Marge, has stopped taking in Wayne's jumpsuits, silk shirts and custom-made slacks. "I'm tired of waiting," she says. "I don't care how famous he is. He's just a customer."
Others have gone to court to collect their money. In the last two years, seven lawsuits have been filed in Nevada's Clark County asking for a judgment against either Newton or his corporation, Flying Eagle. "Get your money up front unless you want to have to chase him for it," cautions Dave Mead, one vendor who didn't sue. Says Mead, vice president of Young Electric Sign Co., which produces the singer's $25,000 marquees, "He's never had a red-hot payment record."
Nor has he ever skimped on himself. Even in Las Vegas, where nothing succeeds like excess, Newton lives like a pasha. Consider Casa de Shenandoah, the 52-acre spread that Newton shares with 16-year-old daughter Erin, his only child, whom he adopted with his former wife of 17 years, Elaine Okamura. There, Newton presides over private lakes, a pool, a man-made meandering stream and a tennis court that can be converted into an ice skating rink. There is also a menagerie of black swans and flamingos, penguins living in climate-controlled comfort, a private jet, a fleet of cars and an impressive collection of pricey jewelry and crystal.
For the moment, at least, the penguins are safe. "I'm really keeping everything I want to keep," says Newton. "It isn't a matter of losing my home or the plane. Interestingly enough, despite the bad debts, I really am a simple guy.
Perhaps, but paying off his many debts may be no simple matter. In a Chapter 7 bankruptcy (the so-called fire-sale version), Newton's assets would simply be liquidated and distributed among creditors proportionately. Under Chapter 11, which Newton is using, he is given time to propose a repayment plan of his own to the court. Thus, for now, his wheeling-dealing is done, and in the end the court could conceivably approve of something less than full payment to some creditors.
"I had gotten so busy with my career. When you're in that mode, you like to think that these things that are going to perpetuate your future are being taken care of," Newton says of his finances. "It shocked to realize they weren't."
Last week, Newton was back at the Hilton dazzling sellout crowds and taking calls at home from such well-wishers as Ronald and Nancy Reagan, Roseanne and Tom Arnold and billionaire hotelier Kirk Kerkorian. "From a standpoint of pride, this has been devastating," Newton concedes. "However, it's been interesting from that standpoint also, because so many people who are honest-to-God true friends stepped up and said, 'What can we do?' "
To those who have offered financial help, the singer has so far declined with a polite Danke schoen—thank you very much. "As long as I have my health and my friends who believe in me," says Newton, "then this is not the end of the world."
DORIS BACON and LYNDON STAMBLER in LA., KAREN G. JACKOVICH in Las Vegas, ANN CONSTABLE in Washington, D.C.
- Doris Bacon,
- Lyndon Stambler,
- Karen G. Jackovich,
- Ann Constable.
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