Top News

Settling Michael Jackson's Estate May Be a Thriller


The King of Pop will likely leave behind one royal estate battle. Michael Jackson, the onetime child star whose string of hit songs got people boogying from Boise to Bahrain, died suddenly on June 25 after being rushed to UCLA Medical Center in Los Angeles in a coma. The singer faced a near-constant drumbeat of legal troubles in life. He'll likely cue up plenty of them in death as well. Although he sold hundreds of millions of records, Jackson's biggest financial hit is a 50% interest in a music publishing catalog that includes the rights to the Beatles' songs. Jackson, 50, always stayed one beat ahead of a conga line of creditors. At every turn there seemed to be one more wealthy benefactor to bail him out. Most recently that was Thomas Barrack, the founder of the Los Angeles real estate investment firm . Last year, Barrack purchased Jackson's Neverland Ranch near Santa Barbara, Calif., for $22 million, just before the property was sold at auction to cover back debts. Barrack also brought in Denver billionaire Philip Anschutz, who was helping finance a comeback for the singer. Jackson was scheduled to play a series of 50 concerts at London's O2 Arena, which Anschutz owns. The concerts, for which Jackson was to be paid $1 million per night, were to begin July 13. Spokespeople for both Barrack and Anschutz's entertainment business declined to comment. Financial Assets Included Sony/ATV Catalog A genius of a songwriter and performer, Jackson was not so in tune with his personal finances. At one point the star owed more than $270 million to Bank of America ( (BAC)). In 2005 the bank sold that debt at a discount to the private equity firm Fortress Investment Group ( (FIG)). Jackson, who reportedly spent as much as $30 million a year during the good times on clothes, travel, and toys for his ranch, successfully fought an attempt to auction many of his personal possessions earlier this year. Over the years those suing Jackson for past-due bills included his former publicist, video director, attorney, and financial advisers. Not much is known about Jackson's estate planning or will. He leaves behind three children and his well-known brothers, sisters, mother, and father. The star had one asset that will likely be the target of much maneuvering by creditors and heirs in the coming months and years—his 50% interest in the music catalog. Shortly after his string of early 1980s hits that included Thriller, one of the best-selling albums of all time, Jackson was shrewdly advised to buy the Beatles catalog for $47 million. Ten years later, Jackson merged his music company with Sony Corp.'s ( (SNE)) music publishing arm in a deal reportedly worth $90 million to him. Today, that company owns the publishing rights to thousands of hit songs by everyone from Neil Diamond to Lady Gaga. Jackson's half interest has been estimated to be worth as much as $500 million. Jackson's own hits are owned by a separate company, also now part of his estate. But like his life, Jackson's estate is unlikely to be settled without controversy.
Palmeri is a reporter for Bloomberg News and Bloomberg Businessweek in Los Angeles.

Later, Baby
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

Companies Mentioned

  • BAC
    (Bank of America Corp)
    • $16.15 USD
    • 0.02
    • 0.12%
  • FIG
    (Fortress Investment Group LLC)
    • $7.41 USD
    • -0.04
    • -0.54%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus