bIGGER THAN EVER: Jacko's $1bn COMEBACK
On the first anniversary of his death, the King of Pop has earned a $1bn fortune from beyond the grave to pay off his massive debts, writes Caitriona Palmer
Published 26/06/2010 | 05:00
When Michael Jackson died of a drug-induced heart attack last year, the singer was so mired in debt that the electric and water authorities were threatening to disconnect service at the California home he co-owned with his elderly mother.
But on the first anniversary of his death this week, the former King of Pop has made the ultimate financial comeback: earning an estimated $1bn (€813m) from the grave that has allowed his estate to pay off his debtors and avoid foreclosure on the Encino mansion in LA where his orphaned children now live.
With Jackson no longer around to indulge in profligate spending sprees, and with an insatiable fan base hungry for anything MJ related, Jackson's estate managers have been able to carefully manage and control the massive earnings from his posthumous album, DVD and merchandise sales.
"What they've done brilliantly is that they've taken advantage of the emotion surrounding the tragic and unexpected passing of Michael Jackson, and done it in a way that's tasteful yet profitable, and that's challenging," says Robert F X Sillerman, a financier who once controlled the estate of Elvis Presley.
But it's not just Jackson's bank balance that has reaped the profits. The singer's once freakish and eccentric public image has also undergone a dramatic facelift.
Now the star is publicly lauded as one of the greatest song writers and performers who ever lived, with less attention focused on the train-wreck style of his final years when he lived in relative obscurity, haunted by persistent allegations of child abuse.
"His sainthood began the moment that he died," said David Reeder, whose company Green Light works with the estates of other dead celebrities. "That's been beneficial for the estate. They haven't had to overcome a lot of obstacles that might have made him less desirable commercially."
When Jackson was found unresponsive in his rented mansion in LA on June 25 last year, the singer was on the verge of a financial meltdown, having accumulated more than $500m (€406m) in debt from mad-cap spending sprees and risky financial planning. Desperate for money, Jackson had signed on for a 50-date comeback tour at the O2 in London -- the This Is It tour -- that would signal his return to live music after a 12-year hiatus.
In the days after Jackson's death, the full disaster of his financial portfolio became apparent. The singer was so broke that he was unable to pay a $1,300 telephone bill and a further $9,000 to the Los Angeles Department of Water and Power for water and electricity bills for the Encino mansion.
In addition, Jackson also owed $341,000 to Thomas Mesereau, the lawyer who had successfully defended him against child-molestation charges in 2005.
But with his estate now managed by two long-term friends, music executive John McClain and personal lawyer John Branca, 'Jackson Inc' is back in business, and the money is rolling in.
The two men have brokered a string of impressive deals for Jackson's estate, including a $250m deal with Sony to release dozens of previously unheard Jackson songs, a Jackson-themed video game, two Cirque du Soleil shows, and a treasure trove of merchandise including millions of dollars in mobile-phone ring tones.
Meanwhile, a documentary film --This Is It -- based on Jackson's final concert rehearsal footage grossed over $252m worldwide, making it the most successful music concert film of all time.
Although estimates on how much Jackson's estate has earned range from $250m to nearly $1bn, the executors have already paid off nearly $200m of Jackson's debt, including the $5m mortgage on the home where Jackson's mother Katherine is raising his three children.
But sources close to Jackson say that the estate's new wealth has come at a price and that the singer -- an obsessive perfectionist -- would never have allowed such a wide reproduction of his work.
"Michael knew that if he sold things, he could sell them left and right, but he was always interested in making sure that the quality was high," Brian Oxman, a lawyer for the singer's father, Joe Jackson, told Weekend Review. "And I don't think that what we're seeing measures up to the quality that Michael Jackson wanted.
"We always knew that he could do a lot of things which he didn't want to do," Oxman said. "We are disappointed that there is this flood of Michael Jackson items which he never would have permitted. Never."
Billboard magazine journalist Cortney Harding agrees that the Jackson estate must tread carefully between mollifying a hungry Jackson fan base and releasing material that the artist himself would be proud of.
'One of the things that the estate has to be really careful about is striking the balance," she told Weekend Review. "People really want his music but they don't want everything. They don't want a tape of him singing in the shower.
"So I think they have to strike a really solid balance between releasing stuff of quality -- and not too much of it -- but at the same time satiating the public appetite," she said.
Harding also believes that Jackson's three children -- Prince Michael (13), Paris (12) and Blanket (8) -- have played an enormous role in helping rehabilitate their father's image in the days after his death. Maligned in the press and public sphere as a washed out joke, a child-like freak with a dubious penchant for the company of little kids, Jackson's unnervingly polite and normal children allowed for a complete reworking of his image -- and an eager public lapped it up.
Harding remembers rolling her eyes at Jackson's over-the-top memorial service in LA last July and then feeling sheepish when Paris stood up to eulogise her father.
"She was so clearly devastated and I thought, 'Oh wow. This kid is really heartbroken and mourning her father'," Harding said. "So I think for people to say, 'Look at these nice normal cute respectable kids that he had. How bad could he have been?' I think that was really beneficial."
"There is no question that his children are his greatest achievement," said Brian Oxman. "When we look at Michael's [kids] we have a whole new appreciation of who he was, and it changes opinions of a lot of people when they see, 'Okay, this man had some real substance to him. Look at his children'."
There is still one major hurdle for the Jackson estate to clear -- a $300m Barclays' loan that is due to mature at the end of this year that is backed by Jackson's 50pc share in the lucrative Beatles' catalogue.
But by all accounts, Jackson's estate is well on target to be back in the black. Sony Music has sold 31.5 million Jackson albums since his death last year and will release its first album of previously unheard Jackson songs this December. Music pundits are expecting that when Forbes magazine publishes its annual list of highest-earning dead celebrities later this year, Michael Jackson will unseat Elvis Presley and assume top position on the list.
The Jackson brand will continue to weave its magic from beyond the grave for many years to come, said Cortney Harding.
"Elvis is still making money all these years later. John Lennon is still making money all these years later," she said. "There's a lot of life left in his music."