Why Michael Jackson inc. has never been healthier
When Michael Jackson died he owed AT&T, the telephone company, about $1,300. By contrast, as fans prepare to mark the first anniversary of his death this Friday, the money earned by his estate from mobile phone ringtones in the 12 months since his passing will top $5m. Both these sums are piddling, in the wider scheme, but also telling.
Thanks to years of personal profligacy and mad-cap financial planning, the King of Pop died with debts of half a billion dollars. Hence the plans at the time to play 50 "This is It" concerts in London last summer.
What is remarkable today, however, is that far from dimming in the shadow of the singer's death, Planet Jackson is spinning faster and brighter than ever. That $5m from ringtones is a tiny fraction of the money now being raked in by his estate, which is managed by the late performer's trusted lawyer, John Branca, and a friend and music industry fixture, John McClain.
Just how much cash is flowing is hard to measure. In its analysis of the multiple deals negotiated over recent weeks and months, the Wall Street Journal reports that $200m has been generated, which has allowed the estate to settle all the debt (including that AT&T bill), leaving only one cloud: a $300m loan that comes due at the end of this year.
This is good news for the late singer's three young children and his mother, who is responsible for them. Most importantly, the foreclosure proceedings on the gated mansion house they call home in Encino, California, which were pending at the time of his death, have been averted. Other creditors, not least the lawyer who defended Jackson at his 2005 child molestation trial, have also been paid off in full.
Billboard magazine thinks the posthumous gusher is even stronger, suggesting yesterday that earnings since his death have topped $1bn. The New York Daily News puts the amount of cash generated at $783m.
Whatever the sum, it is clear that Jackson Inc is in far better financial shape now than when the singer was alive. When Forbes magazine releases its next annual list of the world's "Top Earning Dead Celebrities" this October, it seems certain that Jackson will take the top spot, knocking Elvis Presley and Yves Saint-Laurent among others down a notch.
The cash is coming from serial sources. Sony, his record label, reportedly did a deal back in March worth $250m to the estate under which it will in future release dozens of previously unheard Jackson songs. A first album is due out before Christmas. Sony also has the rights to develop a Jackson-themed stage production as well as video games.
Meanwhile, there was the windfall generated by the film of Jackson's final rehearsals before the London concert series that never happened. Sony Pictures paid the estate $60m for the rights to the documentary, also called This is It. The film took $72m in the US and $188m overseas, of which $56m was earned in Japan alone, making it the most successful music concert film of all time. And we haven't even mentioned the surge in album sales after his death from medications-related cardiac arrest. Sony has sold 31.5 million Jackson albums worldwide.
Also helping refloat the bank account is the estate's 50 per cent ownership of Sony/ATV Music Publishing, a bulging catalogue which controls the rights to 251 Beatles songs as well as music by Taylor Swift. The estate should shortly be collecting a tidy $11m in dividends from that holding.
But herein lurks the snag of that one large outstanding loan. According to the Wall Street Journal, Sony helped set the loan up with Barclays four years ago. It was guaranteed by Jackson's 50 per cent ownership of the Beatles catalogue. If the estate fails to find a way to refinance or settle the loan before it comes due, Sony has the right to buy that half-share from the estate for a fire-sale price.
It is a big hurdle the estate must navigate. But just one year after the singer's death, the chaos of his finances seems largely to have been resolved and the wilder elements of his image have begun to fade into the background leaving an earning power that is greater than anyone could have expected.
Remaining loyal to Michael Jackson in the final decade of his life was not easy. The headlines were always less about his music and more about his 'Wacko Jacko' misadventures, whether dangling his baby from a balcony or being acquitted of child molestation charges. But with the music-maker gone, the music has come back to the fore. So, too, has the legend of his talent, burnished in part by the documentary film This Is It. Fans will be attempting this week to leave flowers and tributes at his tomb at the Forest Lawn Cemetery. Hopes that his Neverland Ranch might one day be opened to the public have faded, however.
While Jackson's three young children – Paris, Prince and Blanket – have all watched the documentary film This Is It, his mother, Katherine Jackson, 80, has not had the courage. Grief may still haunt her, but with full custody of her grandchildren, looking after them in the Encino house is now her first priority. "The children are seemingly as normal as normal can be under pretty extraordinary circumstances," Adam Streisand, the lawyer who represents Katherine, told the AP yesterday. He reports that all eight of Michael's siblings and their families have also pitched in to help with their upbringing.
In the immediate aftermath of his death, Jackson recaptured the top slot on the Billboard charts in the United States, moving 422,000 albums in seven days. While his established CD mega-hits have enjoyed a new burst of sales, Sony, his label, has promised a repackaging of his first break-out solo hit, Off the Wall, and his 1987 album Bad. Sony also plans to release a CD of previously unheard tracks this November, in time for Christmas. Jackson mania is not just about records, however. The Montreal-based circus and entertainment group Cirque de Soleil is working on a touring and permanent Jackson tribute show similar to its Beatles production, Love.