The Business Side of Michael Jackson
A couple of legends come to mind when you talk about pop music: Sinatra, Elvis Presley, The Beatles, The Rolling Stones, Madonna, Michael Jackson. All of these created a huge fan base, all of them set fashion trends in clothing, set trends in music, in performance. All of stood the test of time and continue to fascinate and endure.
MJ very well may be the last real superstar that created emotion and mania simply by performing his "moonwalk", that continues to amaze today and copied. MJ was not only a great singer, performer, he had a keen business mind, as well. Like some very famous and wealthy people, he had his dark side: the two child molestation cases, one in 1993, that he got out of by paying $20 million and the second in 2005, where he was acquitted. He had his Neverland ranch which employed 120 people, six recording studios and a zoo. He had three Caucasian children from a mysterious mother that he reportedly paid for, and in his last months, spent $6.5 million in Las Vegas on a shopping spree. Of course, beginning in the 90's, he seemed to want to become a "white person" spending thousands on getting his skin bleached white until it was freakishly ghoulish. His plastic surgery on his facial features feminized him. Was he trying to be a white woman? Who Knows? Still, despite his appearance, he remained the "King of Pop" with a worldwide fan base of all races.Just as all of the other legends had done.
MJ created the first 3D shows for Disney, which ran for many years. His world tours, like Thriller, were mega money makers and that LP is still the most sold LP ever. In the autobiography, Moonwalk, the writer in 1988 asked, "Do you think he likes girls"? Whatever the answer is, the book was a huge money maker for MJ. His most famous of the two marriages he had was the one to Elvis Presley's daughter, Lisa Marie. It was a rather short one, the second was kept under raps perhaps because the woman was paid to have his children. Very mysterious and hush.
MJ began to think of other's music as investments in his early teens. He knew the value of owning the copyright to songs because he would get a few cents everytime it played on TV or radio. But, it was not until his twenties that he acted upon his instinct by buying the rights to all of the Sly and the Family Stone catalog for $500K in 1984. He quickly got back his investment when a band did one and it went to #1. He then started to looked for another investment to make a fortune at. At the time, ATV owned the rights to all The Beatles' songs. ATV was selling it. MJ had always been a huge fan. Owning a piece of the Beatle legend really appealed to him, but Paul McCartney was also bidding to buy the songs he co-wrote. After a brief war, ATV sold the catalog to MJ for $47.5 million. Today, the investment is worth $1 billion!
MJ in the 1990's looked for other investments and was eyeing the purchase of Marvel Comics, thinking that Spiderman, Hulk, X-men and others, might become movie franchises, like they are today. However, while his hunch was spot on, a deal for them did not. But in 10 years later, Disney saw the same value and bought them for $4 billion.
MJ's peak earnings were in two years, $125 million in 1988 and $118 million in 1995. His LP's were costly affairs as he would spend 40% over budget on them. From 2000-9, much of his money went into upkeep of the ranch, his numerous facial bleachings. By 2009, the year he died, he had not toured since 1997 and had not released a new LP since 2001.To continue the facade of success, he borrowed heavily against his Beatle catalog and at some point he was paying $11 million in interest per year. How odd that The Beatles were keeping MJ afloat financially!
MJ's gross value in 2005 was $567 million, his ranch could be sold for $33 million, car collection for $20 million. MJ was in debt for $331 million. MJ only had $668K in cash assets.
When presented with this dilemma then, MJ decided that he had to tour again, there was no other way, that is how the "This Is It" tour began. It was all business. But, even after MJ had died, his legend carried on. The documentary film on the rehearsals of "This Is It", earned $200 million. By 2010, his old records were hot and sold over 8 million copies beating newcomer Tayler Swift, who sold 4 million. By the end of 2009, despite MJ being dead, his estate reaped a total of $313 million.
It seemed that even without the tour MJ dodged dire financial ruin, but he had to die for it. Of course, had MJ lived and the tour was a success, MJ would have been well into the safety zone financially speaking. But there was another dark cloud on the horizon: the taxman.
In 2013, the IRS filed a suit against the estate for unpaid taxes amounting to $702 million. Rags to riches to rags (or near that) again. The beat goes on.
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