Michael Jackson leaves hefty debts
LOS ANGELES/NEW YORK
LOS ANGELES/NEW YORK (Reuters) - Along with a vast musical legacy and legions of adoring fans, pop superstar Michael Jackson leaves behind a mountain of debt and an unfulfilled comeback many hoped would rake in millions and erase his financial troubles.
The King of Pop died suddenly on Thursday at the age of 50, after a career spanning 40 years that included the biggest-selling pop album of all time, "Thriller."
Despite taking in hundreds of millions of dollars as one of the most successful pop musicians of all time, Jackson racked up about $500 million of debt, according to sources cited by The Wall Street Journal earlier this month.
His top assets, however, including copyrights to his own songs and a stake in the Beatles' song catalog, are worth more than $1 billion, according to a music industry source.
Jackson's career and image were tarnished by his mounting financial and legal troubles in recent years.
Known for huge shopping sprees for toys and antiques, Jackson was accused by an accountant during his 2005 trial on child molestation charges of spending $20 million to $30 million more than he was bringing in per year.
The lavish lifestyle was made possible in part by a $200 million loan secured by his stake in the Beatles catalog. Jackson owned the music in a joint venture with Sony Corp known as Sony/ATV. Jackson refinanced those loans in 2006 in a bid to stave off insolvency.
In addition, Jackson last November had to hand over the title on his Neverland estate in California to a company made up of himself and Los Angeles-based real estate investment trust Colony Capital LLC, the firm that holds his $23 million loan on the property.
Colony Capital has been sprucing up the ranch and planned to sell it, according to the Journal. Colony Chief Executive Tom Barrack told the newspaper last month the estate could fetch $70 million to $80 million, or more if Jackson's career were revitalized.
In a statement on Thursday, Barrack said he was "deeply saddened" by Jackson's death, but did not comment on the impact on Colony's business.
PLANNED BIG COMEBACK
To help turn around his financial fortunes, Jackson was planning a major comeback in London this summer, 12 years since his last tour.
AEG Live, which was promoting the 50-concert run at the 02 Arena, stands to lose as much as $40 million if its insurance is not substantial enough to cover what it has already spent on the production, Billboard reported, and one attorney said the company would not be able to recover any of those costs from Jackson's estate.
"The concert promoters can't sue the estate," said Bob Rasmussen, dean of the Gould Law School at the University of Southern California. "Once he dies, he doesn't have any obligation to perform."
AEG, wholly owned by privately held Anschutz Co, will also certainly miss out on the $400 million the company estimated it could raise through a 3 1/2-year plan to work with Jackson.
But Jackson's greatest financial returns may come in the wake of his death. His long-term record company, Sony Music Entertainment, will likely reissue special versions of some his biggest-selling albums and possibly even rare recordings.