Nseabong Okong-Ekong
4 July 2009
analysis
Lagos — Suddenly, everyone has realised that Michael Jackson can not die! In fact his transition has generated goodwill, far better than when he was living. Michael has taken on a whole brand new life in death. Anything connected to Michael is a hot cake now. Regrettably, Michael will not be a direct beneficiary of any of these gains. Of what use is all the monies of the world to a dead man?
The good feeling, however, will live with members of his family and his die-hard fans who will be re-assured to know that their idol did not depart this world with the encumbrance of debt. Actually, Michael's planned 50-series last dance in London was meant, in part, to cancel out his huge debt. Although the entire concert had sold out, the income from it would only have met some of his financial obligations. And there is nothing to say that Michael would not resumed his extravagant lifestyle, therefore cancelling out the gains accruing from the concert. There is a good chance that he would have been forced to eat his word about the July 13 London concert series being his last. Like the legendary boxer, Mohammed Ali, he would have been forced to come out of retirement several times for pecuniary reasons. The world would never know how Michael would have overcome his financial crises or whether he would have gone down the fast lane into bankruptcy. The likelihood of a Michael Jackson distancing himself from trouble and controversies was remote; which means he would have continued to incur huge debts in litigation and out-of-court settlements.
Everything Michael had is held down in a trust to be administered by his mother. A court has already given temporary power to carry out this function according to the late King of Pop's Will which was made seven years ago. Of course, there is expected to be an avalanche of demands to seek legal interpretation or intervention to push the will one way or the other. There will be genuine requests and ones that are outright ridiculous. Some cranks will see this as their claim to fame; as every opportunity to take a pot shot at Michael will be celebrated in the news.
NSEOBONG OKON-EKONG uses agency reports to analyse Michael Jackson's business sense and concludes that the King of Pop had become a financial institution that birthed a few dreams, while killing many hopes.
In death as in live, Michael Jackson remains a monumental tower of wealth, not only to his personal credit but also to scores of persons whose nest were feathered by riding on his back. The late King of Pop's net worth was reportedly put at nearly USD300 million as of March 31, 2007. Documents stating this claim were obtained by The Associated Press. Already, Jackson's financial empire has become the focus of a legal battle between the singer's family and creditors. Jackson had $702.91 million in assets, including his Neverland Ranch, his share of the Sony/ATV Music Publishing catalogue that includes the rights to songs by the Beatles, and an assortment of cars, antiques and collectibles, according to a statement of financial condition prepared by Washington-based accounting firm Thompson, Cobb, Bazilio Associates. The five-page report says Jackson had debts of $409.91 million, leaving him with a net worth of $236.6 million. Highlighting his shaky financial health, the singer known for his lavish shopping sprees had just $668,215 in cash, according to the report, which is dated June 12, 2007. The report says the accounting of Jackson's finances is 'based on information produced by his advisers'. It paints a picture of Jackson's tangled finances and the mountain of debt he left behind. The report values Jackson's 50 per cent stake in the Sony/ATV Music Publishing catalogue - his most prized assets - at $483.72 million. Another of Jackson's prized possessions, his Neverland Ranch, is valued at $40.87 million, according to the report.
It says Jackson took out a $28.48 million loan against the 1,011 property in the rolling hills of Santa Barbara County.
He also had $24.77 million worth of cars, antiques, collectibles and other property.
Another source of income that Michael Jackson may never have bargained for in his lifetime is sales grossed from his return to the top of the Billboard charts.
Billboard says albums by the pop singer who died suddenly penultimate Thursday at the age of 50 will occupy nine of the top 10 spots on the Top Pop Catalogue Album chart released last Wednesday. Jackson's album Number Ones was No.1 on sales of 108,000 copies during the week which ended on June 28 followed by The Essential Michael Jackson and Thriller on sales of 102,000 and 101,000 respectively.
Billboard, in an article on Billboard.com, said that, Number Ones was the only Jackson title on the chart. It was at No.20 on sales of 4,000 copies.
Billboard said Jackson's 1979 Off the Wall was at No.4 on sales of 33,000 copies followed by Bad on sales of 17,000.
The Jackson 5's The Ultimate Collection was fifth on sales of 18,000 copies followed by Dangerous, Greatest Hits: History - Volume 1 and The Ultimate Collection.
Billboard said the only non-Jackson-related album in the top 10 was a re-issue of the soundtrack from the movie Woodstock, which was at No.10 on sale of 8,000 copies.
Billboard said Jackson's solo albums sold 415,000 copies this past week compared with sales of just 10,000 copies in the week that ended June 21.
It said Jackson's catalogue had sold only 297,000 copies the entire year through June 21.
Billboard noted that sales of the top three selling Jackson albums were higher during the week than that of the best-selling album on the Billboard 200 charts, The E.N.D. by the Black Eyed Peas, which sold 88,000 copies.
Billboard also said there were 2.6 million digital downloads of songs by Jackson and the Jackson 5 during the week, up from the previous week's 48,000.
Like is won't to happen when a big tree falls, Michael's death has not only affected his immediately family, but many who had their businesses tied to him are also counting their losses. Undoubtedly, one of the biggest losers is the promoter for the cancelled Michael Jackson concerts, Mr. Randy Phillips says insurance will cover some of the financial losses.
The insurance only applies if the star died accidentally, such as through a drug overdose, but not if he died of natural causes.
Promoter AEG took out an $18 million insurance policy, although that would still fall short of the $25 to $30 million the company spent in advance, which included covering some of Jackson's debts, staff and rent.
In an uncanny twist of fate, Michael Jackson's planned concert series in London which was supposed to clear some of the singer's debt and launch a comeback has become an albatross to his family and business associates.
The pop icon's fans can get full refunds for the cancelled 50-night concert extravaganza - or opt to receive souvenir tickets.
In a move that could help recoup some of its losses from the ill-fated tour, Los Angeles-based AEG Live said fans could choose to receive the actual tickets, which it said feature graphics 'inspired and designed' by Jackson himself. Fans have until August 14 to take the ticket offer.
For those opting for a refund, all service charges paid to authorised ticket sellers will be included, the statement said.
Fans spent more than $US90 million on tickets, which were priced between $US82 and $US124, though some went for hundreds of dollars on Internet auction sites.
AEG Live may be counting on diehard fans to want to hold onto their tickets as bittersweet reminders of what might have been - or to cash in later should they become collector's items. Many did just that after Elvis Presley died in 1977.
Jackson's death has left AEG Live, which operates the 02 Arena where the pop star was to have performed, with a colossal problem.
In addition to the money taken in by ticket sales, which must be refunded, the company had already paid Jackson millions and spent millions more getting ready for the planned July 13 premiere - not to mention that one of the city's biggest arenas has been left with 50 open nights.
The skirmishing over refunds and open bookings is just one aspect of what is likely to be years of legal wrangling over financial matters, including Jackson's considerable debts, assets and custody of his three children. The battles are likely to dwarf earlier fights for the control of assets left by other departed rock gods, including guitar hero Jimi Hendrix and reggae trailblazer Bob Marley.
Promoters are generally required to take out insurance to cover concert cancellations or non-appearances, said Malcolm Tarling, a spokesman for the Association of British Insurers.
Many of the policies are extremely specific, allocating levels of payouts according to the reason for the cancellation - including the cause of any death. If a drug overdose was specified as a risk with lower coverage, AEG may be entitled to less money.
Much of the company's ability to weather the financial storm caused by Jackson's demise may depend on how much of its losses are covered by insurance.
And that will be determined in part by what the Los Angeles County coroner's office finally determines as the cause of the mega star's death. Officials have warned it will be up to six weeks before a cause of death can be pinpointed because complicated toxicology tests are needed.
AEG Live has so far been tight lipped about the amount of insurance coverage it had for the concerts and which companies were the underwriters. Insurance market Lloyd's of London says its member corporations underwrote some policies, but said AEG likely had multiple contracts, with several insurers all taking on a portion of the risk.
A pointer to the legal fireworks following Michael Jackson's death has begun with the filing of his seven-year-old will in a Los Angeles court. The will gives his entire estate to a family trust and names his mother as a beneficiary of the trust and the guardian of his three children.
The will also names singer Diana Ross as a successor guardian to 79-year-old Katherine Jackson if necessary.
The will, dated July 7, 2002, estimated his estate at that time at more than $US500 million. It gives the entire estate to the Michael Jackson Family Trust. His former wife Debbie Rowe is cut out of the will.
The documents said Jackson's estate consisted almost entirely of 'non-cash, non-liquid assets, including primarily an interest in a catalogue of music royalty rights which is currently being administered by Sony ATV, and the interests of various entities.'
It also names Jackson's long-time lawyer John Branca and John McClain, a music executive and a family friend, as co-executors of the will.
Jackson left behind three children: son Michael Joseph Jr., known as Prince Michael, 12; daughter Paris Michael Katherine, 11; and son Prince Michael II, 7. Rowe was the mother of the two oldest children; the youngest was born to a surrogate mother, who has never been identified. The children are named in the will.
In a statement, Branca and McClain said: 'The most important element of Michael's will is his unwavering desire that his mother, Katherine, become the legal guardian for his three children. As we work to carry out Michael's instructions to safeguard both the future of his children as well as the remarkable legacy he left us as an artist we ask that all matters involving his estate be handled with the dignity and the respect that Michael and his family deserve.'
Katherine Jackson was granted temporary guardianship of Jackson's three children. A judge held off on requests to control the children's estates, and gave her limited control over her son's troubled, but lucrative finances.
Rowe, who was married to Jackson in 1996 and filed for divorce three years later, surrendered her parental rights. An appeals court later found that was done in error, and Rowe and Jackson entered an out-of-court settlement in 2006.
Neither Rowe nor her lawyers have indicated whether she intends to seek custody of the two oldest children.
Michael Jackson's father, Joseph was cut out of a will drafted by the pop icon seven years ago.
As the Jackson family were granted temporary control of the singer's affairs, the Wall Street Journal reported a 2002 will divided his estate between his mother, three children and one or more charities.
However Joe Jackson, who had an uneasy relationship with his son, does not feature, the Journal report said.
A lawyer for Jackson submitted the will, which was believed to be his last, to Los Angeles Superior last Thursday, it added. The singer's parents have not seen the will, their lawyer said in a statement to the daily.
Joe Jackson, a former steelworker, raised his nine children into musical sensations. Michael Jackson said his father would beat him if he missed a note and tell him he was ugly, contributing to the tragic pop icon's fragility.
'This is where they belong,' Joe Jackson, also 79, told reporters after the decision. 'We're going to take care of them and give them the education they're supposed to have.'
Rowe, a dermatologist who met Jackson when he was under treatment, has kept a low profile since their divorce. But she appealed through her lawyers to let the children mourn their father in peace.
Rowe 'requests that Michael's family, and particularly the children, be spared such harmful, sensationalist speculation', lawyer Marta Almli said.
Another attorney expected Rowe to make a decision on her next step in the coming days.
Legal experts say that Rowe, as the biological mother, would have a strong chance to gain custody of her two children.
Joe Jackson said no funeral date would be set until results of a second autopsy on his son were complete.
The Los Angeles Times meanwhile reported that Los Angeles Police Department detectives are seeking to identify and interview 'multiple doctors' who treated Jackson in the years before his death.
Attention has so far focused on the role of Jackson's doctor Conrad Murray, who was with the star just before his death last Thursday.
Lawyers for Murray and law enforcement sources have said he is not suspected of wrongdoing and has cooperated with the investigation.
Jackson's death has sparked a worldwide outpouring of grief and tributes which continued on Tuesday with crowds gathering at New York's famous Apollo Theatre for a celebration of the star's life.
In Lagos, the Silverbird group, Thursday organised a huge concert featuring the crème of Nigerian artistes plus a good mix of enthusiastic members of the public. The event at the Silverbird Galleria was a fitting tribute to the late King of Pop. It had many Michael Jackson look-alikes. The show was a huge success. As a result of the teeming crowd, getting into the venue was as difficult as getting out of it. Some of the popular artistes who were at the venue to support the show were Tuface Idibia, RooftopMCs, Waje, Mr. Kool, Nene and MI. Each of them was requested to do a make-over of Michael Jackson.
A grandeur African Concert in honour of Michael Jackson is also being planned Lagos. It is the brainchild of the founder of the Gauranga Foundation and ex President of PMAN (Performing Musicians Association of Nigeria), Bolaji Rosiji, partnering with the foremost events group in Nigeria, Z-Mirage/ZMC and a South African group. The project is tagged "Remembering Michael Jackson" (R.E.M.I)
The Remembering Michael Jackson Concert, R.E.M.I, will be an African affair, involving most of the African foreign missions in Nigeria. Performing at the concert will be the crème de la crème of African, European and American Artistes.
On why Gauranga Foundation decided to honour the late Michael Jackson, the ex PMAN President and said 'The Gauranga Foundation shares the vision of Michael Jackson's Heal the World Foundation.
Early ratings show UK channels BBC News and Sky News saw a huge spike in their viewers within minutes confirming Michael Jackson's death at around 11.30pm BST.
Figures suggest Sky News' audience peaked with around 761,000 viewers, whereas BBC News held an estimated 606,000. Sky reported an initial surge in viewing at 11pm with their audience doubling from 203, 000 to over 400,000 and growing as the news of Jackson's death began to spread.
Meanwhile US TV networks rushed to clear schedules and add tribute programmes to both Michael and actress Farrah Fawcett, who also passed away same day after a long battle with cancer.
US channel ABC News devoted two hours to Michael in a special edition of its show '20/20' called 'The Life and Death of Michael Jackson' which was co-presented by journalist Martin Bashir - who famously produced the expose 'Living with Michael Jackson'. The network followed this with 'Farrah Fawcett: Her Life, Her Loves, Her Legacy'.
A woman claiming to be Michael Jackson's wife has demanded his body be returned to her. Nona Jackson, who claims to have had 15 children with the late pop star, has filed a 93 page claim to Michael's estate. She states in the claim: "All my husband's properties, monies and assets must be transferred to me immediately.
"My husband's body must be returned to the coroner's body or the mortuary immediately (sic)." In another part of her claim, Nona states: "Though he died to this earth, he lives with my father, Satan the Devil Khalid Lucifer."
A Los Angles judge has refused her request. Following Michael's death from a suspected cardiac arrest last week, Nona posted a message online, saying: "I have become a widow, I have paid ultimately for loving Michael Jackson but it is all I have to give him, the gift of eternity. He had to be loved even once in this lifetime and I have done that. I too can die in peace some day." I feel her evidence fails to establish any genetic relationship. Last year, Nona filed for a restraining order against Michael's ex-wife Debbie Rowe, saying she made it hard to concentrate when she attended award shows with the star. She also claimed to be the real mother of Jackson's three children, Prince Michael, 12, Paris, 11, and Prince Michael II, seven.
Nona - full name Nona Paris Lola Ankhesenamun Jackson - has previously made claims about Jackson in court in 2006 and again in 2007, although none had sufficient evidence to back them up.
Randy Phillips, CEO of AEG said that when he saw and heard the response to the announcement of ten concerts, and saw the scramble to snap up the tickets, he rang Michael to tell him that they would have to increase the number of concerts to satisfy the demand. Very quickly the number increased to thirty and when a further twenty were added he again called Michael, who was "blown away", and cried with emotion at the news of the complete sell out of the tickets.
"If you look at Elvis, there is a ready-made museum in Graceland and I imagine the Jackson family are considering that option for Neverland - it's a perfect opportunity.
"The gate entrance from visitors would not be particularly important; the estate would make much more from what is sold to the fan once he or she is there. That would produce a stream of income that was not available in Jackson's lifetime."
Michael Jackson didn't come to be known as the "King of Pop" for nothing. He often hit the stage resplendent in gold and rhinestones, his lifestyle was notoriously lavish and he ruled a kingdom of adoring disciples: pop music fans, who bought more than 750 million records worldwide and flocked in their millions to sold-out concerts. Such was Jackson's influence, that even though he hadn't performed since 1997 or released a record since 2001, he was able to command $85 million in ticket sales for a sold-out tour he would never perform.
But despite the fact that Jackson's talent and shrewd business sense allowed him to rake in millions over his lifetime, when he died of a heart attack penultimate Thursday, he was reportedly more than $500 million in debt.
To those of more modest means, it seems impossible that someone who earned more than $500 million in royalties alone should run out of money. In fact, many people assume that the super-rich don't have to worry about money at all. Nine-figure fortunes are so far beyond most peoples' own incomes, that it's hard for them to even imagine the bottom of such a large pot of gold.
Michael Jackson's king-sized financial problems have dethroned this myth. So how does a mega-millionaire rack up such massive debt? It occurs for the same reason as it does for those with more average earnings: expenses exceed income.
Although hundreds of millions of dollars may seem like bottomless wealth, poor money management can lead to the depletion of even the most stately sums. This is because people - whether famous or not - generally fall victim to what's known as the lifestyle creep; their desires rise right along with their incomes. So, their lifestyles rise to meet - or in Jackson's case, surpass - their incomes.
According to a forensic accountant who testified in Jackson's 2005 trial for molestation charges, Jackson was suffering an "ongoing cash crisis", and was spending $20 million to $30 million more than the estimated $19 million he earned through royalties each year. While Jackson's expenses may have been extravagant, his behavior is shockingly average: the U.S. Commerce Department reported in 2007 that Americans, on average, were spending more than they had earned. Although the recent credit crisis has recently reversed this trend somewhat, it is clear that in good times, people tend to jump on the hedonic treadmill and keep on running.
Take Michael Jackson's 2,600 acre Neverland Ranch estate. The property was Jackson's personal kingdom, boasting a fairground, a 50-seat cinema, a zoo and an assessed value of more than $17 million in 2006. It sounds extravagant, but at least in terms of paying the mortgage, it's actually to scale with a $19 million income.
But Jackson was also described as collector and shopper, who reportedly spent $4 million on a single Las Vegas shopping spree in 2003. Ten-foot glass urns may not be on everyone's shopping list, but for the super-rich, the scale of expenses expands along with income, and there is no shortage of extravagantly expensive luxury items to cater to people with ultra-thick pocketbooks and an exclusive limit-free credit card.
The truth is, money is a finite resource. By definition, this means that no matter how much you have, it can never be unlimited. And as long as there are millionaires, there will be no shortage of ever-grander (and ever more expensive) luxury products. Good money management applies to all income brackets. Michael Jackson carried an air of aristocracy even among the most elite celebrities, but although he lived like a king, he died in debt.
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