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Entertainment » Music » What Happened to Michael Jackson's Millions $$$$

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What Happened to Michael Jackson's Millions $$$$
Pradeep
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Posted 27-06-2009Reply

Counting wasn't a problem for Michael Jackson in the 1970 hit "ABC." Love, he chirped in the Jackson 5 song he co-wrote, was as "easy as 1-2-3." When it came to handling the bigger sums the singer would go on to amass, though, Jackson never really got a grip on the numbers. Profligate spending, a slew of legal settlements and a reliance on ever increasing bank loans blew a hole in the fortune Jackson earned over four decades of performing. Some estimates put the singer's debt at the time of his death at $300 million. Others put him almost twice as far into the red.

That the King of Pop earned royal sums for his music, there's little doubt. Jackson pocketed more than $300 million from sales of his recordings since the early 1980s, according to The New York Times. Thriller, which was the top-selling album of all time until eclipsed by the Eagles' Greatest Hits, 1971-1975, brought in a reported $125 million for the singer in the years after its release in 1982. Though there were early signs of an inclination to spend — he apparently missed out on landing the bones of John Merrick, better known as the Elephant Man, despite bidding about $1 million for them in 1987 — Jackson showed early investment savvy. Shelling out $47.5 million in 1985 for the rights to a catalog of music that included 251 Beatles songs was a profitable move. Those rights, as well as concerts, endorsements and music videos, would generate more than $400 million over the next two decades.

Little else about his finances was as clever. Blessed with the regular rewards from the Beatles' music and his own, Jackson started to spend. He paid $17 million in 1988 for the 2,800-acre (roughly 1,000 hectares) ranch in California that would become Neverland. Maintaining the theme park — complete with zoo, movie theater and fairground — swallowed up about $5 million annually. As Jackson gradually retreated from work, the additional millions eaten up by plane charters, antiques, lavish gifts and legal disputes — a child-molestation case in the early 1990s cost Jackson around $20 million to settle — left a hole in his fortune. To help plug it, in 1995 the singer signed over to Sony a 50% stake in the rights to the Beatles' catalog in exchange for almost $100 million.

Things would get worse. With sponsors turned off by Jackson's private life — Pepsi and sneaker brand LA Gear, for instance, had backed him — he further lost control of his finances. Duff investments and a divorce settlement with Lisa Marie Presley helped push Jackson to increasingly use his earnings from music as collateral for loans, first from Bank of America (BoA), before Fortress Investment Group, a specialist in distressed debt, took the loans off BoA's hands. By the mid-2000s, Jackson was believed to be $270 million in debt.

With annual income from the sale of his and his catalog's music at around $19 million, according to the Wall Street Journal, Jackson was still stretched. When the singer defaulted on a loan in March last year, pushing Neverland into foreclosure, private-equity firm Colony Capital stepped in to bail him out. The 50 concerts planned for London later this year could have netted Jackson as much as $100 million, with a possible world tour to follow generating five times that amount. To Jackson's debtors, if not to the singer himself, that sure would have added up.



Source: http://www.time.com/time/business/article/0,8599,1907401,00.html
 
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