Artykuły

• Cost of Neverland placed huge strain on finances
• Soaring sales since death boosts Sony and Warner

• Chris Tryhorn
• The Guardian, Tuesday 30 June 2009

 

 

With Michael Jackson once again dominating the charts across the world in the days since his death, the earning power of the man who sold an estimated 750m records has never been clearer. But Jackson left a mountain of debt behind him, and how the tangled web of his finances will unravel and who might benefit is far from clear.

He was days away from a potentially lucrative 50-concert residency in London before he died – pictures of the final rehearsals for the shows emerged last night – but there seems to be no doubt that Jackson was facing severe cash problems before he died.

His former nanny Grace Rwaramba revealed to the Sunday Times at the weekend that she had to use her own credit card earlier this year to pay for a birthday party for one of his children.

Jackson first ran into big trouble in the 1990s, when the cost of maintaining the Neverland ranch (which he had bought in 1988 for $14.6m, or £8.8m) with its zoo, cinema, fairground and miniature train, placed a severe strain on his finances.

"He had a tremendous burn rate of several million dollars a month running Neverland, shopping and going crazy, flying people all over the world. He kept borrowing against his asset base, and put himself in a deep cashflow situation," his former publicist, Stuart Backerman, told the Vancouver Sun.

He also paid out $25.5m in out-of-court settlements with the families of boys who had accused him of child abuse. Meanwhile, the hits were no longer flowing, with diminishing returns from albums that were appearing four years apart.

"He is the biggest exemplar of the MC Hammer phenomenon, where an artist adjusts his spending to match the peak of his cashflow and then doesn't adjust when the cashflow goes down ‑ and as a result is left in deep trouble," said the veteran DJ Paul Gambaccini. "When you start having an entourage, it's very hard to let them go, you feel you need them around you. You create a little community that exists to support you."

In 1995, to ease the growing pressure on his finances, he agreed to merge his prize asset – the Beatles song catalogue, which he had acquired a decade earlier – with the library of his record company, Sony. Three years later, things had got so bad that he had to take out a $140m loan with Bank of America secured against his 50% stake in the joint venture, Sony/ATV.

Jackson's borrowings continued to swell, while his debt with Bank of America was sold on to the New York company Fortress Investment Group. Some reports have put his debts at the time of his death as high as $500m, and while he hung on to his 50% share of the Beatles rights, it is unclear who will get them now and whether his stake is worth the $1bn that has been mooted.

Sony/ATV takes in $300m-$500m a year from the Beatles, Bob Dylan, Eminem and others' songwriting royalties, according to Rolling Stone.

Aside from his extravagance, Jackson's big problem was that he had not put out any new material since 2001. Sony filled the gap with greatest hits compilations and special editions of his classic albums such as Off the Wall.

Last year the company released the anthology King of Pop, following other greatest hits collections Number Ones – currently number one in the album charts – and The Essential Michael Jackson, which also features Jackson Five songs.

Hopes for a new album were raised in 2006 when Jackson appointed Guy Holmes, the man behind Right Said Fred and Crazy Frog, to spearhead efforts to come up with fresh material. The star found a benefactor in Sheikh Abdullah of Bahrain, who was reportedly prepared to bankroll Jackson's costs if he recorded the sheikh's own compositions. But the deal came to nothing.

Musically, Jackson had become directionless, DJ Paul Gambaccini argues. "Everything suggests it's not just his real fans who bought the act, it appears as if he bought the act: he believed that he was the King of Pop, he believed he was still a major star even though in today's marketplace he did not even have a presence. He seemed clueless about what to do next."

A return to live performance – which is increasingly lucrative for today's music aristocracy – was Jackson's best hope. His comeback at London's O2 was to have begun next month and was expected to earn him up to $100m. The fact that such a prolonged run sold out so fast proved Jackson still had extraordinary pulling power.

Since his death on Thursday, sales of his songs and albums have gone into overdrive, propelling the Number Ones compilation to the top of the album charts and many vintage tracks into the top 200 singles.

It has come as a boost to Sony BMG, whose Epic label released all of Jackson's major solo albums, while Universal has profited from the sale of material dating back to the Jackson family's stint with Motown between 1968 and 1976.

Another of the four music majors, Warner, administers the publishing rights for the many songs written by Jackson himself, taking a cut from their commercial exploitation on television, in films and in advertising. Although a posthumous fillip to record sales has been observed ever since the early days of rock'n'roll with the deaths of Buddy Holly and Eddie Cochran, this is the first time that digital sales have allowed many different individual tracks to be purchased at the same time in the immediate aftermath of a pop star's demise.

Retailers happened to be fairly well stocked with hard copies of Jackson's albums because plenty had been pressed in advance of the O2 concerts.

How long the sales bounce will be sustained is open to question.

adjust - dostosowywać (się)

aftermath - pokłosie, następstwa

asset - aktywa, kapitał

bankroll - finansować

be mooted - być poddanym pod dyskusję

benefactor - dobroczyńca

boost - polepszać, zwiększać, wzmagać 

bounce - skakać, odbijać się

cashflow - przepływ gotówki

charts - listy przebojów

clueless - bez pomysłu, bez pojęcia

demise - upadek

entourage - (z francuskiego) otoczenie, świta

exemplar - typowy przykład

extravagance - rozrzutność

fillip - bodziec

go into overdrive - przybierać na sile, wzmagać się

lucrative - intratny, lukratywny

maintain - utrzymywać

merge - łączyć, scalać

posthumous - pośmiertny

propel - napędzać, wprawiać w ruch

rehearsal - próba

release - wydawać

reportedly - rzekomo

retailer - kupiec, detalista

reveal - ujawniać

soaring - szybko wzrastający

spearhead - przewodzić

stint - ograniczenie

strain - obciążenie, napięcie

sustain - podtrzymywać

swell - powiększać

tangled - zawikłany

unravel - rozwiązywać, rozwikłać

vintage - vintage; pochodzący z najlepszego okresu dla danego gatunku, produktu itp.

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