From the Wall Street Journal and elsewhere, noise that the company holding one of the smaller financial reins on Michael Jackson is trying to persuade him to create some sort of long-running performance or show, à la the Las Vegas residencies of Celine Dion and others.
As usual with Jackson, the story raises more questions than it answers. From the Journal:
Colony Capital, which owns the Las Vegas Hilton and is a major shareholder in closely held Station Casinos, is in discussions with Mr. Jackson to get him back onstage and in the spotlight via a long-term stand in Las Vegas. It also wants the singer to sell his Neverland Ranch, the home of his private amusement park and menagerie and site of his controversial sleepovers with young children.
Colony and its executives aren’t working with Mr. Jackson as managers or personal advisers. But they may nonetheless have a better chance of succeeding with Mr. Jackson than the many figures who have served in those capacities, thanks to Colony’s major leverage with the pop star. The private-equity group in May bought from hedge fund Fortress Investment Group a $23 million loan backed by Neverland, in Los Olivos, Calif. Mr. Jackson, 49 years old, was in default on the loan and Fortress had initiated foreclosure proceedings. After buying the loan, Colony negotiated some short-term breathing room for Mr. Jackson. Under discussion is a scenario in which he would be allowed to put off making payments for a while, in exchange for more money further down the road.
You’ll recall Jackson was on the verge of having the ranch sold on the courthouse steps in March. This embarrassing scene was staved off, apparently by Colony. Besides the disgrace of his little pleasure palace’s being sold to the highest bidder, Jackson also, by some accounts, would have been facing a steep tax bill, as much as $5 million, had it been sold off at a good price. It was also reported at the time that Havenhurst, the Jackson family manse in Encino, had been mortgaged and that Jackson had regularly been faced with default on that loan, said to be $4 million.
Those numbers, however, may just be a sideshow next to the main Jackson money issue. The big debt is said to amount to several hundred millions dollars and is supposedly backed by his music publishing holdings, specifically his half interest in Sony/ATV. The NYT in 2006 reported that Sony, which owns the other half, had agree to advance him $300 million, guaranteed by half of his interest in Sony/ATV.
Nothing further has been heard about this deal, but if in the end it went through successfully, in crude terms it seems that Jackson, rather than living off the income from the holdings, has in effect paid for his crazily profligate lifestyle by selling off the holding itself. (Note that this is all as an alternative to actually working and earning more money as well.) If it did go through and the numbers in the stories were correct, Jackson now holds the equivalent of 25 percent of a company he used to own all of, and which a few years ago was said to be worth $1 billion.
Even that would keep most folks in the necessities, but Jackson’s idea of them is different from that of most people. At the same time, he may have other, unknown debt obligations—there were mentions of multi-million-dollar tax obligations during his trial, for example—that may deplete even that income.
All of which may or may not explain why a guy who settled hundreds of millions of dollars in debts recently is still having trouble dealing with the demands of a couple of smaller ones amounting to just a few percentage points more.
Back to Colony and Jackson and Las Vegas. The question here is why Jackson needs Colony to set him up with a performance situation. He’s a big star, and has performed live in the past and knows how to set up a tour. The Journal story tiptoes around this:
Since Mr. Jackson’s 2005 acquittal on child-molestation charges, various entertainment-industry executives have pursued some kind of splashy comeback for him. For the most part, the singer hasn’t played along. In February he backed out of a planned performance during the Grammy Awards telecast. Around the same time, he also declined a proposal to perform for 10 nights at a London arena. People who have spoken to Mr. Jackson say he has simply not felt up to the rigors of performing after his lengthy legal ordeal.
That’s bullshit, because Jackson stopped making public appearances, with rare exceptions, long ago. During that time, the money available to him from touring has grown extraordinarily. Jackson knows that artists nowhere near his stature have tours grossing in the nine figures.
I think that if Jackson were capable of touring he would have already. As Hitsville has written before:
The touring issue brings up perhaps the saddest factor of all in the Michael Jackson story. As Springsteen, U2, the Eagles and the Stones know, a big-ticket A-level star tour is a tonic for the troops. Jackson could launch a $100M- —or $200M- —grossing tour whenever he wanted to. He could also take home $10M or $15M with just a two week run at MSG or Meadowlands. He’s also had comparable offers from promoters in Las Vegas and London.
Jackson’s history with tours is checkered, of course, but this seems an obvious way to stave off financial problems. (And he could make even more if he kept his ambitions reined in and did a disciplined greatest-hits show with a minimum of spectacle.) The troubling question about Jackson is this: Is a tour or a series of performances the trump card, deep down inside, he knows he can put on the table when the need arises? Or is his mental or physical condition such at this point that it’s out of the question? If it’s the latter, Michael Jackson’s last years may turn out to be truly unpretty.
p.s. : I was just looking up the derivation of the name “Sony/ATV” on Wikipedia and came upon this little bit of internet ineffability on that page, under the heading “Notes”:
As of June 2008 With Michael holding 50% of the Beatles catalog and Sony/ATV investing in new music publishing’s Michael makes a yearly earnings of $350 million dollars a year. Michael owns 50% of Sony/ATV catalog, the only reason Michael is not paying off the loans is because the Sony/ATV company is reinvesting in new music and buying small publishing companys up. like last year Sony/AVT brought the ‘Famous Music’ publishing company for $370 million. This all add to the value and income of the comany. Remember Sony/ATV was value at over $900 million in 1999 (9 years ago), before they brought a Country catolog for $140 million and before they brought the ‘Famous Music’ publishing company for $370 million and before tens of thousands and news track were added to the comany. now Sony/ATV has an estimated value of between $6 to $7 Billion and Michael still owns 50% and the media keep writing how broke he is. As of 2008 Sony/ATV is valued at 6 billion dollars more then any other music Publishing.
Michael will continue to hold on to his 50% share of the company and the company will continue to reinvested and buy other publishing companys up. Michael will continue to extend his loans and give it less than 5 years, Michael will probley have loans of over $500 million and the media will continue to make out he’s close to bankruptcy, but the company then will be worth between $7 to $9 Billion.
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