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29 March 2024

Creditors circle Jacko's estate

Michael Jackson (SUPPLIED)

Published
By Bindu Rai and Rachel McArthur

It will go down in history as the day the music died for fans of Michael Jackson who were left devastated by the news of his sudden death.

But the mountain of debt the singer leaves in his wake will probably see creditors reaching for their medications, many of whom were pegging hopes on of a payoff from Jackson's comeback tour that was to begin in two weeks at the O2 Arena, London.

The King of Pop, aged 50, reportedly died of a cardiac arrest and was estimated to have incurred losses of $500 million (Dh1.8 billion), according to The Wall Street Journal. A messy estate battle in the future is likely as private benefactors who kept Jackson flush with money in the recent past – one of which was Bahrain's Sheikh Abdulla bin Hamad Al Khalifa – step forward for their piece of his assets, currently estimated to cross $1bn.

Few details were known yesterday about the circumstances surrounding his death, but the entertainer was reportedly unconscious and not breathing by the time he reached hospital. Brother Jermaine Jackson stated at yesterday's press conference: "Doctors tried to resuscitate him for over an hour but they were unsuccessful. Michael is gone."

The Grammy-winner's family rushed to UCLA Medical Center, Los Angeles, where Jackson's body was flown in for an autopsy.

While people wait for the coroner's results, the irony is not lost on many who draw parallels between the singer's mysterious demise and the reclusive life he lead in the public eye in the recent past. Accused twice of child molestation, deferring on payments, breach of contracts and almost weekly lawsuits left the singer bankrupt and losing his larger than life Neverland Valley Ranch that boasted amusement park rides and a petting zoo.

Jackson had spent the last two months rehearsing for the 50-concert gigs. Losses incurred by organiser AEG Live are estimated to run into millions of dollars. Billboard.com stated nearly $85m worth of tickets had been sold, along with another $30m spent on production costs and a $10m advance payment handed out to Jackson. And even though insurance should most likely cover the company, experts predict the payoff may not be enough.

When Emirates Business contacted AEG Live Middle East, managing director Thomas Oveson said: "At this time our thoughts are with Michael's children, family and friends. A further announcement will be made for ticket holders to Michael's upcoming shows in the near future."

Padma Coram, Managing Partner of event organisers The Talent Brokers, said: "The losses will amount to millions even with an insurance coverage, especially when refunds will have to be made for ticket holders of Jackson's comeback concerts."

The Talent Brokers was the first company to organise a Jackson concert in Dubai in 1994. After much media hype and tickets being sold out in 24 hours, the event was called off the last minute, leaving local fans devastated. Padma recalled: "All 26,000 tickets for the show were sold out in less than 24 hours, at an average price of Dh1,000. When the show was cancelled, we refunded our fans within 24 hours. But it took two years for our insurance to kick in; we never fully recovered our expenses."

Earlier this year, the King of Pop's brother Jermaine was in Dubai and hinted at a possible Jackson 5 reunion in the emirate. He told Emirates Business: "All the siblings are excited to come to Dubai for a family reunion.

"Michael has committed to his world tour. But if he's free, Janet and I will make sure he comes along to just moonwalk on stage."
Born in 1958, in Indiana, Jackson was the seventh of nine children and first performed with his brothers in the Jackson 5.

After going solo, at the peak of his career in the 1980s and early 1990s, Jackson was the world's most bankable star. His 1982 Thriller album made music history, having sold more than 100 million copies. A 25th anniversary edition released last year, catapulting the eight times Grammy-winning album back to the top of the charts. He followed up Thriller's success with Bad (1987) and Dangerous (1991). Today, he is one of the most successful entertainers of the past century, with a lifetime sales tally of 750m records and 13 Grammy Awards.

Aside from his musical success, Jackson's business investments also kept him rolling in money for a while. In 1985, Jackson paid $47.5m to purchase ATV Music, which owned the rights to 251 Beatles songs written by John Lennon and Sir Paul McCartney.

The steady stream of income it generated allowed him to buy the Neverland ranch in 1988 for $14.6m; in 2003, the property was valued at $100m.

A year after his property purchase, Jackson's annual earnings from album sales, endorsements and concerts were estimated at $125 million for that year alone.

In 1991, Jackson renewed his contract with Sony for a record-breaking $65m – the largest payout of its kind at the time.

In 1994, he married Elvis Presley's daughter, Lisa Marie, but the marriage ended in 1996. He married Debbie Rowe the same year and had two children, before splitting in 1999; Jackson later had another child with an unidentified surrogate mother.

With assets of nearly $1bn at stake, the obvious choice in inheritors should be Jackson's children, Prince Michael, 12, Paris, 11, and seven-year-old Prince Michael II, known as Blanket. But things are not so cut and dry.

A custody battle may be on the cards as sources close to the Jackson family say ex-wife Rowe is to receive initial custody while long-term arrangements have yet to be sorted out. Family attorney Brian Oxman revealed to Radar the children are likely to be in the care of Katherine, Jackson's mother. "Probably Mrs Jackson will take care of them," he said.

It is still too early to learn, if ever, the full contents of Jackson's will, but early reports suggest McCartney could be one of the beneficiaries. Reports earlier this year said Jackson had left McCartney his stake in the Beatles' song catalogue. But given that this share already has a $200m loan against it, there could be a while before the McCartney gets the songs.

No doubt Jackson's family, his creditors, and partners such as LA-based real estate investment trust Colony Capital and music catalogue joint venture partner Sony, will all be laying claim to some of these assets.

But Sony at least has a chance of recovering some money. The company that owns the rights to Jackson's music may boost revenue through a rebound in sales of the late pop icon's CDs and DVDs, analysts say.

Tokyo-based Sony had planned before Jackson's death to start selling five of the star's CD packages including Thriller and Bad from July 8 in Japan.

Sony owns the rights for Jackson's Off the Wall, Thriller, Bad, Dangerous and HIStory albums.

Meanwhile Sony didn't comment on the increased sales. A statement by Howard Stringer, Sony chief executive officer, said: "Michael Jackson was a brilliant troubadour for his generation, a genius whose music reflected the passion and creativity of an era."

For the Corams, who have reasons to be upset after the cancelled Dubai concert of 1994, memories of the icon are still very fond. Recalling husband and managing partner Richard's first meeting with Jackson and actress Elizabeth Taylor, Padma said: "When Richard flew to Singapore to see him before his trip to Dubai, Michael stunned him on the homework he had done on the city and our company.

"At the team meeting at the Hyatt Regency, Michael's only request was to visit a park, a school and stack his room with paper and pencils as he doodles a lot.

"No alcohol no tantrums. He was a child in an adult body."

For fans, the self-styled King of Pop's music will now live on in his recordings, but it is a fair bet that the legacy of his high-spending lifestyle will be around for a good few years too. (With agencies)

 

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