By Steve Hiraga
Prior to the morning of March 27, 2015 I had never heard the name Zayn Malik. However here he was, being discussed on several media outlets on my daily roster. I had heard of One Direction (1D to fans), the British boy band quintet, now quartet, obviously modeled after the legends who came before them; the Jackson 5, the Monkees, New Kids on the Block, NSYNC. Presently Zayn is newsworthy because he has decided to leave what is arguably the most successful pop music group in the world, seemingly at the peak of their power. Their latest record, Four, peaked at number one on worldwide charts and I’m sure I’m not the first to point out the irony of the album’s name.
The thought that immediately came to my mind was, “Well, that will be the end of One Direction.” I’ve seen this story before, not as a shrieking fan of course, but as an observer of our modern culture. The boy band lives the microcosmic life of a star. Created in nebulae, hopeful to burn as bright as a red giant, certain to supernova on the front page of your favorite entertainment blog.
What Zayn Malik may or may not understand is that his decision will shift economies. Specifically those of his bandmates and the team who created 1D that produces their records, manages their tours and appearances, markets them, and myriad demands that pop stars require of which I cannot even imagine. According to Billboard, the group’s 2014 world tour alone generated $290 million in gross revenue, not to mention the $28 million grossed in US movie theaters. There are many people who will feel the financial effects of One Direction’s slow fall from stardom.
If you’re a business owner with a partner or partners, Zayn Malik’s departure is the manifestation of what is possibly your greatest business risk. It is reasonable to assume that your partner has some level of expertise and experience that would be difficult to replace quickly, if at all. An unexpected death of a partner could be devastating to a small business. What will be the capital requirements of the business to react to the departure? Do you have the capital available to buy out your partner’s spouse? You probably have insurance to take care of your family if you were to die unexpectedly, but does your business have the same coverage? Key person insurance is a product available to businesses that will provide some level of security should you ever be faced with an unexpected departure. The business pays a premium on a policy on its key employees and the business is the beneficiary. In the case of a death the choices a company is faced with are then focused around how to deploy the proceeds and not necessarily on how to avoid supernova.