They say that dead men tell no tales, but one thing they can still do is make a lot of money. And that is exactly what the estate of Michael Jackson and its executor is about to do. Published reports on ABC News and the Wall Street Journal On-line Magazine claim that Jackson left a debt of between $400-$500 million.
The bulk of this debt stems from a $200 million dollar loan Jackson reportedly took out on his fifty percent share of a catalog he owns with Sony Music. And an additional $70 million he took out on his own MiJac catalog for a grand total debt with Bank of America of approximately $270 million.
However, the ATV/Sony catalog includes all the rights to most of the Beatles songs (the important ones anyway) along with various other artists. Its appraised value is estimated as high as $2 billion, and since Mr. Jackson's demise the value of his own MiJac catalog could eventually come in just as high.
Bank of America Sold Jackson's Debt
According to a report by Fox News's entertainment division that was released on the Fox News On-line site, In 2005, Bank of America officials sold Jackson's debt to a private hedge fund called Fortress Investments, in Manhattan.
Fortress then entered into an agreement with Jackson to restructure his debt, but with the weight of his opulent spending and lavish life-style without the benefit of revenue coming in from new CD sales or tour ticket sales, Jackson was again on the edge as he had gotten behind on this mortgage payments and Fortress made claims that they would soon move to foreclose on his home at Neverland Ranch.
According to the London based Financial Times on-line newspaper, Citibank rode to Mr. Jackson's rescue by restructuring his now $300 million dollar debt, but in 2008, Jackson again fell behind on his payments owing over $24 million and this time Fortress did make good on a threat to foreclose Neverland. However,the crisis was averted when another hedge fund Colony Capital, bought Mr. Jackson's loans from Fortress and set up a joint-venture partnership with Mr. Jackson to co-own Neverland Ranch. Of which he promptly sold a quarter-share to Colony for $35 million dollars, according to the Times report.
Plans for the home included renovation and perhaps a Graceland type museum to display items from the singers storied entertainment career. According to Forbes On-line Magazine the ranches estimated value in 2004 was $US120 million.
Jackson Planned a Career Comeback
The principles at Colony were the same people who put together the London dates for Mr. Jackson's sold out fifty (50) show dates at London's state of the art O2 arena complex. In addition plans were in the works for a three-year world tour, show dates in Las Vegas and Macau, and even a $1 billion dollar Thriller casino.
If there were doubts about Mr. Jackson's popularity and ability to draw a crowd, that notion was soon put to rest as Mr. Jackson's shows in London sold out in record fashion. By some estimates his This Is It series of concert dates sold a ticket every eleven seconds for two days until 1 million seats had been sold.
It has been estimated by the Financial Times that these shows would have generated a total of $120-150 million with $US85 million in ticket sales alone, of which Mr. Jackson stood to make between $50-$100 million.
Jackson Financially Viable in Death
Mr. Jackson's untimely death has spurred a resurgence of interest in his music and memorabilia, according to reports on Apple's Itunes website where Mr. Jackson's songs and album compilations are now the number one sellers. In addition Mr. Jackson is poised to make a come back on the Billboard charts If estimates by Billboard Magazine are accurate.
Speculation has also been swirling about the families plans for funeral arrangements and they are reportedly choosing between a private family and close friends ceremony and a public viewing for his fans, or perhaps some hybrid of both could occur.
But if Jackson is somehow allowed to lie in state at Neverland ranch and then interred there with a Graceland type museum built around his burial site, then Neverland would have the potential to generate hundreds of millions of dollars per year.
So according to Forbes On-line Magazine, with current and future music sales (already estimated at $20-$30 million a year), a half ownership stake in the ATV/Sony music catalog which brings in $75 million a year to Mr. Jackson's estate (estimated value as high as $1 billion for Jackson's share). In addition to ownership of his own masters and publishing rights to his MiJac catalog (estimated value as high as $300 million) and still with a quarter-share ownership in Neverland Ranch, it becomes fairly obvious that the estate of Michael Jackson could never be broke.
Sources for Article:
The Death of a Pop Music Icon: Michael Jackson's Life of Fame and Scandal Ends on Eve of Comeback Concerts Wall Street Journal Online Magazine, Authors: Ethan Smith, Nicholas Casey and Sabrina Shankman, June 26th 2009.
Jackson Close to Resolving Financial Woes Financial Times online, Author: Joshua Chaffin, April 14th, 2006.
Michael Jackson's Up's and Downs, Forbes.com, Author Brett Pully, November 21st, 2003.
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