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Long live the King's music
A surge in interest in Michael Jackson is forcing people around him to revise their initial assessment that his assets could be overwhelmed by the debts attached to them.
- Financial Times
- Published: 22:48 July 2, 2009
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A surge in interest in Michael Jackson is forcing people around him to revise their initial assessment that his assets could be overwhelmed by the debts attached to them.
Amazon.com, the online retailer, sold as many Jackson albums in the 24 hours after his death as in the previous 11 years, and HMV's music stores saw an 80-fold jump in sales of his recordings.
The response has overwhelmed sales increases seen after Elvis Presley and John Lennon died, HMV said. The fact that much of the music is being sold online also means profit margins should be high.
In spite of dying with debts of between $400m (Dh1.4 billion) and $500m, the value of many of Jackson's other assets has been similarly transformed by his death, according to industry executives, lawyers and former advisers.
They warned, however, that the experience of other performer's estates indicated that future earnings would depend on decisions taken in the coming weeks by his family and business partners.
Control of Jackson's estate remains unclear, with one report that he died with no valid will conflicting with others that John Branca, a former attorney who returned to his staff recently, has a 2002 will leaving assets to Jackson's children, his mother and some charities.
"You've got to appoint someone who's in charge of this - a trustee," said J Duross O'Bryan, a forensic accountant and managing director of Alix Partners who examined Jackson's finances during a 2005 molestation trial. At the time, Jackson had "little or no cash at all, from the documents we saw", O'Bryan said. The Associated Press reported that a 2007 statement of his financial condition found he had just $668,000 in cash.
"He'd overspent so badly at that point that he had gotten a number of advances [against future sales] from Sony," his partner in the Sony ATV music publishing venture which owns most of the Beatles' biggest hits, O'Bryan said.
A Sony ATV spokesman would not comment.
Industry executives said that the 50 per cent stake, valued at up to $1 billion, should still be worth more than a $300 million loan from Barclays secured against it.
Jackson's next largest asset, the Mijac catalogue that controls publishing rights to his recordings, will see the most direct benefit from his return to the top of the charts.
If Mijac is auctioned, as some executives expect, its value should easily exceed the $73 million Barclays loan secured on it.
According to one executive who has heard them, Jackson had also been working on an album with a producer called Red One, raising the prospect of revenues from new songs.
Anschutz Entertainment Group, which had planned Jackson's 50 nights of concerts at - London's O2 Arena, confirmed that it could release lucrative video footage of the rehearsals.
Randy Philips, AEG Live's president, told Sky News a family tribute show could replace some of the planned concerts, adding: "We probably will be fine financially from this."
Jackson's death has also transformed the potential fortunes of Neverland, the 2,600-acre Santa Barbara ranch that had been one of the heaviest drains on his cash.
Before moving out in 2006, he maintained about 50 cars and more than 100 staff on the property. Colony Capital, which saved Neverland from a foreclosure sale last year via a joint venture with Jackson to spruce up the property, has not commented on its plans. Industry lawyers said, however, that it may follow the model of Elvis Presley's estate.
Presley died in similarly straitened circumstances, but his family's agreement to open his Graceland home to the public and keep a tight rein on the use of his image turned the value of the estate round.
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