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Selena Gomez Faces Millions of Dollars in Liability for Ending Tour

 Selena Gomez performs at KISS 108's Jingle Ball 2013 in Boston, Dec. 13. (Photo by Harry Woods/FilmMagic)

Selena Gomez performs at KISS 108’s Jingle Ball 2013 in Boston, Dec. 13. (Photo by Harry Woods/FilmMagic)

Selena Gomez’s health is far worse than her management is letting on because the singer faces potentially millions of dollars in liability for abruptly canceling her Stars Dance Tour in Southeast Asia, Japan and Australia.

The official reason is simply because she’s “exhausted.”

Such a decision couldn’t have been made lightly because of the financial damage she is causing to the venues and all the related services where she was scheduled to perform.

Her tour had undoubtedly signed contracts to appear in the 11 venues that booked her in Japan, Shanghai, China, Kuala Lumpur, Malaysia, Manila in the Philippines and five cities in Australia: Sydney, Brisbane, Melbourne, Perth and Adelaide.

Such contracts are complex documents that typically cover everything from ticket and merchandise sales, to concessions, film rights and DVD sales. In addition, riders are attached specifying everything a star wants from their personal needs down to special stage props, according to a source familiar with the concert business.

In addition, hotel, flight and ground travel accommodations had to already have been made for Selena, her stage crew, back-up dancers and anyone else that’s part of her entourage.

Of course, her contract also likely contains provisions that would allow her to cancel a show or shows. And the tour is probably insured against unusual or catastrophic losses.

But those provisions are typically very specific and unless they are met to the letter, you can bet the insurer will balk at paying, the source said.

Selena’s health would certainly be grounds for cancellation. But her malady must be serious, specified in the contract and certified by not only her doctor but the insurance company’s doctor.

Even if Selena’s decision to cancel is legitimate and the insurance company pays, the money is never enough to cover all the losses. That means Gomez and/or her tour could still be on the hook for a substantial sum of money.

According to box office data compiled by Billboard, Gomez’s domestic shows a been grossing between $245,000 and $745,000 in ticket sales alone depending on the size and location of the venue. Other revenue sources could easily double that amount.

Thus the 11 venues hit by the cancellation are probably out anywhere from $1 million to $2 million per show. Plus the economic impact from lost revenue from concertgoers not spending on drinks, dinner, transportation and other expenses would have a multiplier effect, driving losses even higher.

The last thing venue owners want are dark nights and empty seats. The fact that several have announced ticket refunds suggests that Selena won’t be back soon with make-up dates.

In addition, the fiasco could cause her insurance costs to soar on future tours. To say that the cancellation is a disaster would be an understatement, our source said.

Her North American tour ended Nov. 26 and she wasn’t due to kick off her Far East tour until Jan. 16 in Tokyo.

Selena would have to be on the verge of a nervous breakdown to justify killing the tour or suffering some other serious malady. To say it’s just due to “exhaustion” or her desire to spend time with her family at Christmas seems like a far fetched or ridiculously expensive decision.

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