Michael Jackson’s estate has generated at least $1 billion in revenues since the singer died a year ago, thanks in part to a lucrative new record deal with Sony Music and the most
Despite his ability to sell out 50 arena dates, when the King of Pop announced in March last year that he would perform a run of 50 concerts at London’s O2 Arena, public perception of him, even by some of his supporters, was as little more than a hallowed oldies act, a performer whose heyday, albeit phenomenal, was more than two decades in the past.
To his detractors, though, Jackson was even less than that: either a laughingstock – “Wacko Jacko” – or worse: a freak, a deviant, a pariah.
Flash-forward 15 months, and Jackson’s image in the public consciousness has undergone a dramatic revision. Since his death from drug-related cardiac arrest on June 25 last year, a popular reclaiming of Jackson as a beloved, once-in-a-lifetime musical genius took hold. While media pundits endlessly poured over the tawdry circumstances of his demise, millions of fans simply shrugged their shoulders and happily popped in their Thriller CDs.
Not wanting to speak ill of the dead is a human and rational desire – once someone is gone, he or she is unable to defend him- or herself. But the changed tone of the conversation surrounding Jackson has done more than just remedy some of the damage inflicted by his years of weird-to-aberrant behaviour; it has also created a series of enormous business opportunities for his estate, opportunities that in all likelihood would not have emerged had Jackson lived.
And analysts agree that the public’s perception of Jackson has changed. According to Brand Asset Consulting’s quarterly survey of more than 16,000 Americans, after his death, Jackson’s relevance increased 125 per cent, and his esteem increased 32 per cent from the previous quarter the survey was administered, prior to his passing.
The success of the film This Is It helped drive the brand forward by presenting Jackson not as bizarre and spectral recluse, but as talented artist, dancer and workaholic.
Closer home, the sight of 11-year-old Paris eulogising her father at the memorial service – “I just wanted to say ever since I was born, Daddy has been the best father you could ever imagine,” she said simply – helped humanise Jackson and counter the perception of him as a neglectful, unfit parent. Prior to his death, only a handful of people had ever seen Jackson’s three children – Paris, now 12; Prince, 13; and Blanket, eight (both pictured, right).
But now here were these grieving children who appeared polite, pleasant and normal. In interviews after his death, insiders emphasised that Jackson’s children were well cared for and well raised, and the video and photo evidence released by the family in the past year seems to bear this out. “Anyone who had doubts about Michael’s ability as a parent, those were erased at the memorial,” says Randy Taraborrelli, a Jackson biographer who had known the star since the ’70s. “Seeing those kids gave some people a sense that they had misjudged him, that he was a good parent.”
Diane Dimond, a journalist who has covered Jackson for many years and who broke the story of the 1993 molestation allegations against the singer, says Jackson’s family is being savvy about the children’s exposure. “The family is smart to put them out there every once in a while,” she says.
“The Jacksons are masters of PR, and it sends a great message to show the world these nice, normal kids.”
Jackson’s most damning scandals centred around inappropriate behaviour with children, and thus his own seemingly well-adjusted offspring serve as a sharp rebuke to the allegations of sexual abuse that plagued him for so long.
Sarah Churchwell, author of The Many Lives of Marilyn Monroe, says that as with Monroe, death rewrote Jackson’s story. And unlike other gone-too-soon celebrities such as Elvis Presley or James Dean, Monroe and Jackson are seen as victims, unable to defend themselves against a ravenous public appetite for celebrity.
“Both Marilyn and Michael, and to a certain extent Princess Diana, are seen as falling prey to the manipulations of others,” Churchwell says. “People see them as being childlike and want to protect them.”
She adds that larger power dynamics are also at play. “If Madonna died tomorrow, the grief would be different. She is a woman who is seen as being very powerful and in control – she’s not a tragic figure. If you are sufficiently powerful, the public doesn’t love you in the same way,” she says.
But Churchwell cautions that just because people are now treading lightly around Jackson’s death doesn’t mean he’ll get a free pass forever. “Initially, after Marilyn Monroe died, there was a sense of pity,” she says. “It took time for Marilyn to evolve into a symbol and for her reputation to change.”
The impending trial of Jackson’s physician, Conrad Murray, on involuntary manslaughter charges might stir things up, and Taraborrelli predicts there will be “a lot of character assassination, which might be hard for fans to endure.” But the fact that Jackson is often portrayed as a victim of doctors like Murray and not as a fully willing participant in his drug addiction might be enough to shift the blame off the star.
Interest in Jackson’s quirks will probably just fade over time, says branding consultant Rob Frankel. “Have you heard any new Elvis jokes in the past several years?” he asks.
One question that looms large for Jackson’s estate, just as it has for the estates of Elvis Presley and John Lennon, is how to extend public goodwill and grow Jackson’s legacy while avoiding appearances of exploitation.
Representatives for Sony Music, and for Jackson’s attorney, John Branca, declined to comment for this story.
Adam Hanft, a marketing and branding expert and chief executive at Hanft Projects in New York, says he would give the family and the estate a C+ grade in terms of their management of the Jackson brand so far. “The one thing they really need to do is work on continuing the emotional connection with his fans,” Hanft says. “I looked at MichaelJackson.com, and it’s just a sales platform; it’s an example of what not to do. There are so many outlets and social media platforms for fans to participate, and they need to embrace some of those.”
Hanft adds that it will take a while for mainstream brands to embrace Jackson, but it will happen eventually. “It’ll take a brand such as Nike, who after all did stay with Tiger Woods, to cross Michael back into the mainstream branding community,” he says. “It’ll take someone who is a little edgy and willing to take some heat to get the ball rolling.”
$392m
Music sales
Sony Pictures bought Jackson’s rehearsal footage from AEG for $60 million. In retrospect, the price was something of a bargain.
Michael Jackson:
This Is It, released in October, earned $72m at the US box office, according to boxofficemojo.com, becoming the highest-grossing concert film in history. Overseas, it took $188m.
After AEG recouped the company’s investment of more than $35m in the cancelled shows at London’s O2 and the film, the bulk of the theatrical take – court documents indicate it could be as high as 90 per cent – went to Jackson’s estate.
On the home video front, the DVD earned $43m in US sales, with 2.7 million units sold since its January release, according to The-Numbers.com.
It is estimated to have made another $25m in rental revenue. In Japan – where the film was also sold as part of a special This Is It bundle for the PlayStation 3 – DVD sales topped $18m on its first day of release; 351,000 Blu-ray copies have been sold, says rankings service Oricon, adding $7m to the total.
In terms of TV, the industry standard is that exclusive rights for ad-supported TV costs 12 per cent of American box office for a four-year window; however, this rule of thumb is in flux as the length of exclusive windows extend and the outlets involved increase.
In November, Viacom bought the exclusive US TV rights to This Is It on its MTV and BET family of networks for six years. Given the additional years in the contract and the film’s box-office tally, the deal could be worth upwards of $15m.
With its family-friendly rating, This Is It can be shown in all distribution media outside of traditional theatres, including airplanes, cruise ships and hotel chains. Licensing fees for nontheatrical performances are generally forecast to be about seven per cent of total revenue for a film or $24m for This Is It.
$429m
Music sales
Since his death, Jackson has sold about nine million albums in the United States, while the Jackson 5 and the Jacksons have sold about 800,000 units, according to Nielsen SoundScan. Outside the States, Jackson’s album sales for the past year stand at around 24 million units. Based on a blended worldwide retail sales price of $11.62 ($12.30 per unit less mechanical royalties), his album catalogue generated an estimated $383m in sales.
On the digital side, the pop icon’s songs generated 12.9 million track downloads in the US in the past 12 months, according to SoundScan. Accordingly, the total number of worldwide downloads is estimated at 26.5 million, with a value of $34m (net of mechanical royalties).
Jackson’s ringtone sales totalled about three million worldwide, with revenue of about $5m (net of mechanical royalties), at $2 per unit. Monies generated from subscription services and digital performance royalties are typically one-third that of mobile revenue, adding another $2m.
US digital performance royalties represent about 13 per cent of the revenue generated by single-track downloads. Applying that rate to global track sales, Jackson’s recording catalogue generated another $4.5m from global digital performances.
$130m
Music publishing
Jackson’s music publishing company, Mijac, could be valued around $150 million, based on a reported value of at least $75m in 2005. At that value, it generates some $25m per year in revenue. In the last year, sources say that number could have doubled to $50m.
Jackson also owns half of Sony/ATV, formed in 1995 when Sony paid Jackson $90m for 50 per cent of ATV Music Publishing. Barry Massarsky of Massarsky Consulting says Sony/ATV is comparable to BMG Music Publishing two years ago when Universal Music Group acquired it for $2bn. Massarsky estimates Sony/ATV is worth about 80 per cent of BMG at the time of acquisition, or $1.6bn, Jackson’s share is half that, or $800m. Based on a multiple of eight to 10 times net publisher’s share, Jackson’s share of the revenue is $80m per year.
$31m
Recording contract
In March, Sony Music Entertainment reached a deal with Jackson's estate to release 10 albums of the singer’s music through 2017. The albums’ content will vary – a collection of previously unreleased tracks is expected in November and a reissue of 1979’s Off the Wall is expected next year. All told, the estate is guaranteed between $200 million and $250m for the deal.
Some of that amount was likely paid in an advance. No albums have yet been released, however. If just one of the contract’s eight years is recognised, that would add $31m to the money the estate received in the last 12 months.
At the time of the deal, John Branca, who serves as special administrator for the estate alongside John McClain, said that Elvis is the model for Jackson’s legacy. “To this day, there’s interest in Elvis,” he said. “And I think there will be enduring interest in Michael. It’s our job to continue to expose Michael to new generations.”
$35m
Licensing/Touring
Despite being cancelled, the 50-show This Is It tour at London’s O2 paid big dividends. Revenue from tickets retained by fans as souvenirs and not refunded brought in an estimated $6.5 million, and Bravado’s This Is It concert merchandise brought in $5m, both less AEG’s share. An AEG-produced Jackson memorabilia exhibit in Japan brought in another estimated $3.5m. Plans call for the exhibit to head to China.
Last August, Bravado followed its AEG/This Is It merchandise deal with a new pact with the Jackson estate that included a $10m advance, sources say. Based on conversations with insiders, Billboard estimates licensing royalties and retail sales accounted for another $10m in revenue. Actual retail sales were far greater.
Gaming firm Ubisoft has said it would release a dance-oriented Jackson videogame for the holiday season. Licensing fees were not disclosed. And finally, sources say there wasn’t any advance on royalties and no guarantees paid for the estate’s two-pronged deal with Cirque du Soleil for a tour and a Las Vegas residency.
After startup costs are shared by the estate and Cirque, revenue will come from box-office receipts and other ancillaries. The financial tragedy here is what might have been. Billboard reported before Jackson’s death that the O2 shows would gross up to $100m and merchandise possibly another $15m. Beyond that, AEG had a 36-month global touring plan in place with Jackson had the run successfully been completed.
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