wtf??
The King’s Ransom
Though years of excessive spending had left Michael Jackson deep in debt, the star's estate should eventually be profitable.
Jun 26, 2009
Email To A Friend
Please fill in the following information and we'll email this link.
SPONSORED BY
Michael Jackson died this week while preparing for a 50-night schedule of shows at London's 02 Arena that were scheduled to begin in July. The concerts would have been Jackson's first since 2001, and he was doing them in part for a simple reason: he desperately needed the money.
He might have died a sudden death, but Jackson leaves us with a music legacy for the ages.
During his life, Jackson sold hundreds of millions of records, and his musical legacy should easily have led him to amass one of the greatest fortunes in show-business history. But instead, a history of bad management, excessive personal spending, and big legal bills left him, at his death, facing continual rumors that he might file for bankruptcy. "After all is said and done, he was almost broke," one close associate told NEWSWEEK. "He needed to do this tour." In the hours after his death, NEWSWEEK spoke with three sources who'd been close to Jackson and involved in his finances, and though their views differ in some respects, they agree that the crisis-ridden financial life he left behind is almost certain to remain as murky and complex as it's been since the mid- to late 1990s.
Jackson's financial problem stems from the fact he continued to spend tens of millions of dollars a year even as his musical output—and his income—slowed down. (His last album, Invincible, was released in 2001.) In recent years Jackson financed these personal debts by borrowing against assets, and by some estimates his total borrowings at his death may have exceeded $400 million. And it wasn't all personal spending: according to record-industry executives, Jackson would drop as much as $30 million recording an album over two or three years in his quest for perfection. His videos cost as much as $8 million. While Sony picked up part of the tab, Jackson was responsible for a hefty portion. "I hold everyone around him responsible," says a former associate. "No one said no. They said, 'Yes, Michael, yes, Michael.' "
According to two of Jackson's former advisers, Sony Music Group, his most pivotal business partner and record label, will likely end up owning his most valuable musical asset: his share of Sony/ATV Music Publishing. A joint venture that Jackson and Sony formed 14 years ago, Sony/ATV owns 750,000 era-spanning hits and classics; its most prized asset is the song rights to most of the works of the Beatles, which Jackson managed to stealthily purchase in 1985 for $47.5 million—a deal that destroyed his friendship with Paul McCartney. In the music industry's 1990s heyday, Sony/ATV might have been worth as much as $1.5 billion, according to the Jackson associates who spoke with NEWSWEEK. Its value in today's recessionary global economy is anyone's guess. One of Jackson's associates says Sony/ATV's value might have plunged to $500 million; a second simply says it's worth "a big number." Jackson's share of the joint venture, in which both he and Sony once had equal stakes, may now be less than 25 percent, one of the associates told NEWSWEEK.
Compounding his woes, the lucrative publishing catalog of Jackson's hits, MiJac, is also encumbered by massive loans, one of the confidants told NEWSWEEK. MiJac is administered by Warner Chappell, a division of Warner Music Group.
- 1
- 2
- Next Page »
Discuss