Published June 27, 2009

Departed MJ leaves behind tangled finances

His Beatles' catalogue counterpoised by mountain of debt; promoter faces US$500m liability

By CHRISTOPHER LIM

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THE king is dead, his musical legacy untarnished but his business legacy uncertain. For a man who had teetered on the brink of bankruptcy, Michael Jackson left television stations and his record label Sony Music a multi-million-dollar farewell gift. Hours after the 50-year-old king of pop was pronounced dead at the UCLA medical centre on Thursday, his CDs were flying off the shelves across the world. MTV Asia also started airing tributes yesterday, with programming set to extend through the weekend.

MUSICAL LEGACY UNDIMMED A star representing Michael Jackson shines in Hollywood. The king of pop died of a heart attack on Thursday

Jackson suffered a heart attack at his home in Beverly Hills, Los Angeles. His passing marks the end of the era of hundred-million record sales and more immediately, leaves his promoter AEG Live facing a liability of almost US$500 million, according to The Times of London.

In death, as in life, immense wealth, and the prospect of it all vanishing in a moment, seem to stalk the man who redefined pop. Jackson was poised to begin a comeback with 50 sold-out concerts at London's O2 Arena starting July 13, which were set to net the singer and his promoter US$70 million, according to Rolling Stone magazine. In fact, Midas Promotions chief executive Michael Hosking was in talks with Jackson's management to bring the singer back to Singapore next year as part of a three-year comeback tour, which the Wall Street Journal estimates could have netted US$400 million.

But, as he sought to pay off his debts, Jackson's last reported public announcement on the London gig suggested that too much had been heaped on his plate. "I don't know how I'm going to do 50 shows," he said. "I'm really angry."

Now it is AEG's problem. Reinsurrance magazine suggests its liability for the 50 shows that the dead king will no longer front could run to £300 million - almost US$500 million. AEG Live is a subsidiary of the Anschutz Entertainment Group, which owns the Staples Center in Los Angeles and the Manchester Evening News Arena.

For Jackson, the lurch from megastardom to the brink of penury is over. In April, he narrowly avoided having 2,000 personal effects auctioned off - items which were seized from his Neverland ranch, which barely escaped foreclosure last year after racking up millions of dollars in debt.

And yet, it is estimated that even around the time of his death he was earning about US$19 million a year from the sales of his albums and his stake in a joint venture with Sony. At the height of his popularity in the 80s and 90s, he used to rake in US$65 million a year. But he spent even more lavishly and his debts are estimated to have touched US$400 million, which may be spread among a number of Wall Street banks.

Musicians around the world, however, owe him a deeper debt. 'His Off The Wall album is very close to my heart and it never fails to move me a lot every time I hear it,' said Dave Tan, vocalist and guitarist of Electrico, Singapore's most successful English rock band.

Such was his popularity in Singapore that he filled the National Stadium for three concerts here in 1993 and 1996.

Michael Roche, director of Lushington Entertainments, which brought Jackson in on both occasions, estimates that a total of 90,000 tickets were sold for the two National Stadium shows in 1993 as part of the Dangerous tour. Thirty-five thousand tickets were sold for the one show in 1996 during the HIStory tour.

Lushington also brought Jackson to Kuala Lumpur's Merdeka Stadium, where the gates had to be chained to keep thousands of fans without tickets from overcrowding the venue.

'Over the two tours, we sold about 200,000 tickets,' said Mr Roche, who added that he wouldn't have hesitated to invite Jackson back to Singapore and Malaysia.

'Everyone wants to see Michael moonwalk and all that, but when he did quiet ballads it was amazing,' he said.

'We've done Linkin Park, Elton John and The Eagles, but the pinnacle of Lushington's 19 years in business was doing Michael Jackson's shows,' said Mr Roche. 'There are many great performers out there but Michael was in a class of his own, and while he could be a bit shy in person, the moment he stepped on stage, his persona just expanded to connect with however many people there were to see him,' he added.

Singapore-based Midas Promotions brought Jackson's 1996 HIStory tour to the Philippines, where he was already immensely popular.

'As a young boy in the Philippines trying to imitate his moves, I realised my interest in music,' said Reuel Ramos, who is now based in Singapore as bassist for local band Zero Sequence.

Midas' Mr Hosking recounts Jackson's decision to throw a Christmas party just for Manila's street children, complete with toys for each child. 'I can remember like it was yesterday the bewildered looks on the faces of these children,' he said.

Mr Hosking asked Jackson about his fascination with children, and the singer replied: 'They are the only ones who don't judge me or want something from me.'

Jackson's words are all the more tragic against the backdrop of child molestation accusations that have dogged him starting in 1993, and even after he was acquitted in the latest round of charges in 2005, his reputation had suffered permanent damage.

The episode also shone the light on his spending follies - including the 2,500-acre Neverland ranch with its US$35-million worth of amusement park facilities.

In recent years, Jackson's most important asset has been a stake in 259 songs from The Beatles' lucrative catalogue - an investment that looks set to appreciate in value with the scheduled release of both remastered copies and versions for the popular Rock Band video game.

He paid US$47.5 million for the catalogue in 1985 and later sold half the company to Sony for US$150 million. The joint venture is now estimated to be worth US$900 million - but the assets could also have been used as collateral for his desperate borrowings.

The tangle may take years to resolve. No one, meanwhile, is likely to retrace Jackson's amazing musical journey.

The singer had sold over 750 million records to date, and 1982's Thriller remains the best-selling album of all time. Thriller alone has sold over 100 million copies, and Internet file-sharing makes it unlikely that the record will ever be broken.