It is well documented that Michael Jackson in the last part of his life had turned into something of an eccentric joke in the eyes of the world. However, the one aspect of this part of the story I found so curious was to read about the huge sums of money being bandied about in regards to the star's business dealings yet he seemed to have been constantly on the verge of bankruptcy. It seems like a paradox. How could somebody be the most recognisable and probably most bankable musical entertainer in the world and be at the point of ending up in the poor house?
According to Wikipedia, Jackson was in a partnership with Sony in a music publishing venture which was making him $75 million a year and yet he had a loan of $270 million on which he was delinquent. Just what was the loan for and where was all his income going? A NY Times article from June 2009 explained that the King of Pop's spending far outweighed his income. In 1999, he earned $11 million but spent $31 million.
In 2006, the reporter Timothy O'Brien shed some light on this mystery. While the beginning of Michael Jackson's career saw a man who seemed to have a handle on his financial affairs, the 1990's and onwards saw somebody progressively spending more and more in a capricious manner oblivious to the monetary consequences. O'Brien does point out a number of unscrupulous people in Jackson's entourage who for some unknown reason had the singer's ear and involved him a questionable and certainly unprofitable deals. Coupled with all this was a growing debt stemming from not just from overspending but also from working less.
O'Brien makes this telling statement: Mr. Jackson was making monthly payments of about $4.5 million in 2005 on $270 million in debt. That works out to be $54 million per year or 20% on $270 million. In other words, Jackson, like anybody who follows the "make the minimum payment" style of financial management, slowly crippled himself financially by having to have more just to pay the interest generated from his ever growing loans. His delinquency was so bad, the only loans he could secure were at abnormally high rates. Greater the risk, greater the interest.
Then it happened. On June 25, 2009, Michael Jackson died. Later that year I read the first story about Jackson's financial problems and I remember reading the reporter say that Jackson dying was the best thing to have happened to Jackson's career. Record sales had taken off but unlike when he was alive, the biggest drain on his finances was no longer in the picture, Michael Jackson himself.
An article from NPR dated June 25/2010 called "Michael Jackson Stacks Paper From The Grave" by Karen Grigsby Bates, states:
The big difference between Jackson now and Jackson a year or so ago — besides the obvious — is he's making money, but his outlay has changed dramatically.
Bill Werde, editor of Billboard Magazine, says Jackson's death was shocking and tragic — and fans' interest in everything Jackson resulted in the strange benefit of digging the singer out of a deep financial hole.
"Not only does it spur an incredible interest in that artist, which of course drives sales and other revenue opportunities, but it also removes the spending from the estate in a big way," Werde says.
So the money made from Jackson's music, music catalog and the release of the hit documentary This Is It, which chronicled the King of Pop's last rehearsal, isn't eroded by a large retinue and undisciplined spending habits.
The Estate
Wikipedia states that Jackson became the best selling artist of 2009. The Washington Post reports that Jackson's estate will have earned $250 million by the first anniversary of his death and is well on its way of paying off all loans. It goes on to estimate that Jackson's half of his Sony partnership is now worth $1 billion.
Forbes in their 2010 list of the 13 top-earning dead celebrities said Jackson, with gross earnings of $275 million, made more than the other 12 combined. Number two was Elvis Presley with $60 million.
Apparently Jackson has numerous unreleased recordings; possibly hundreds of them. (see the Wikipedia article below about this) This past year has seen some "new" songs from the King of Pop and it would seem his estate has much to sell to the world to keep Mr. Jackson at the top of Forbes list. Certainly his children will never have any financial worries in their lifetimes. And probably their children as well.
Final Word
I have to chuckle thinking that one is worth more dead than alive. (Then again, I should take a look in the mirror. That idea could very well be applicable to me!)
Michael Jackson was an amazing, talented, and unique performer. It is unfortunate to see someone in circumstances so far removed from the normalcy of everyday life that he would progressively see life in a distorted manner. I guess if you're so far up the ladder from the rest of us common folk, you forget - if you ever knew - what normal life really is. Then again, what's odd in normal life turns out to be what creates that artistic output. Is it a trade-off? Normalcy for greatness?
Looking at the estate, it is just mind-boggling to think about the wealth being generated by this entertainer even after his death. What a legacy and what a testimony to his popularity.
References
Wikipedia: Michael Jackson
The Toronto Star - Jun 25/2010
Death Becomes Him: The surprising rehab of Michael Jackson by Joel Rubinoff
NPR - June 25/2010
Michael Jackson Stacks Paper From The Grave by Karen Grigsby Bates
Huffington Post - March 14/2011
Exclusive: Inside Michael Jackson's "Hollywood" by Joe Vogel
The New York Times - May 14/2006
What Happened to the Fortune Michael Jackson Made? by Timothy L. O'Brien
[This is a fascinating article about Jackson's spending from the 1980s, through the 1990s and into the 2000s.]
The Daily Mail - Nov 14/2008
Michael Jackson - the man who blew a billion By Alison Boshoff
Wikipedia: List of unreleased Michael Jackson material
2011-03-22
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