Michael Jackson dies due to $ 500 million | Music industry
It seems unlikely that an artist who sold over 100 million albums in his career could be broke, but Michael Jackson would have died for an amount of up to $ 500 million (£ 302 million sterling).
With the huge worldwide success of Thriller and the follow-up album Bad, Jackson became one of the highest grossing stars of the 1980s, earning him unusually high royalties from the sale of each record.
He became known for his increasingly lavish spending and bought the sprawling Neverland ranch in Santa Barbara for $ 14.6 million in 1988, including a fun fair and zoo. In one of his most astute business moves, at the height of his fame in 1985, Jackson paid $ 47.5 million to ATV Music, which held the copyright to songs written by John Lennon and Paul McCartney. of the Beatles, outbidding McCartney himself. Owning the songs earned him a constant stream of royalties every time one of the songs was played on the radio or played.
In 1991, he signed a $ 65 million recording contract with Sony.
But the turning point seemed to come in 1993, when he faced a civil lawsuit brought by the parents of 13-year-old boy Jordy Chandler. Jackson, who paid $ 22 million to settle the case, became increasingly reclusive and his financial situation apparently got out of hand. A recent news article suggested that Jackson may have burned $ 1 billion in the past 20 years. No one knows for sure what he spent his fortune on, but there was a clue in Martin Bashir’s 2003 documentary, in which the singer shelled out $ 6 million at a single store on a shopping spree.
Financial pressure began to manifest itself in the mid-1990s when he agreed to merge ATV with Sony’s song library.
Cash flow crisis
But still his finances deteriorated. In recent years, he has become mired in lawsuits from creditors, including lawyers who defended the singer in another pedophilia trial in 2005. During that trial, which ended in an acquittal, Jackson’s financial details were reviewed. An accountant said he had a “running cash flow crisis” and was spending $ 20 million to $ 30 million a year more than he was earning. Prosecutors said he had a “billionaire’s spending habit on just a millionaire’s spending budget.”
Earlier this month, the organizers of a planned Jackson 5 reunion concert filed a $ 40 million claim against the singer. New Jersey-based promoter AllGood Entertainment has claimed breach of contract and fraud, demanding $ 20 million in compensatory damages and an additional $ 20 million in punitive damages, claiming Jackson had promised not to perform solo before a show scheduled for next year. Other lawsuits in recent years have been filed by Union Finance & Investment Corporation, which demanded $ 12 million in unpaid fees, and a $ 7 million claim from Sheikh Abdulla bin Hamad Al Khalifa, the king’s second son. from Bahrain who claimed he had given the singer millions of dollars to produce an album, a live musical and write an autobiography, none of which has been released.
In 2001 Jackson had used his half of ATV to get a $ 200 million loan from Bank of America and in 2006 was forced to refinance the loan to avoid bankruptcy.
In March of last year, Jackson faced Neverland foreclosure although a real estate investment company came to his aid, forming a joint venture with him to take possession of the ranch. In April, he ended a public auction of his belongings, including jewelry-encrusted concert tickets, stage outfits and musical memorabilia.
Jackson would still have an annual income of $ 19 million. But the singer hadn’t released any new material since the unsuccessful 2001 album Invincible, and hadn’t performed live for over a decade and there were hopes that the return tour could solve his financial crisis for good. It was estimated that he could have made up to $ 500 million had he been around the world.
In the end, he left another financial mess at AEG, the owner of the O2 arena, formerly known as the Millennium Dome. According to Billboard magazine, more than $ 85 million in tickets have been sold and AEG has already spent $ 30 million on the production.
Reports also suggest that the company was only insured for the first 10 nights of the residence, as insurers feared the singer would be fit enough to perform all 50 nights, leaving AEG with potential insurance liability of up to up to £ 300million.