Ashleigh Banfield turned up on CNN the other day to discuss Michael Jackson. The appearance of Banfield—a highly watchable journalistic cocktail of Roland Hedley and Suzanne Stone Maretto who appeared on MSNBC full-blown, accoutermented with air filters and surgical masks, in the dusty hours after 9/11, rose meteorically to cover Afghanistan for the news channel in a fetching burka, and then disappeared into the black hole of her own ridiculousness soon after—gave confirmation, if it was needed, that the circus was in town.
With any luck, it’s gonna be here for a while. A few of the acts:
1) Who killed Michael Jackson? Drug reports will come drizzling out as the media and the LAPD searches for a certain Doctor Feelgood, selected by Jackson as a live-in medico but paid for by AEG, the concert promoter, who makes a cameo in the 911 call during Jackson’s death but then dropped out of sight. Now, Jackson obviously killed himself with his drug use, paranoia and mental decline. But it must be said that, the evening before, he’d been rehearsing on the stage of the Staples Center, so he wasn’t an invalid. The doctor is now re-appearing, having now, one assumes, lawyered up. Youth wants to know: How do you die when you have a live-in doctor?
2) The hangers-on and spokespeople. Jesse Jackson is with the Jackson family, drumming up suspicions about the doctor. (Thus far I haven’t seen an intrepid newsperson ask Jesse why, if he was so gosh darn close to Jackson, he didn’t do something to stop him from drugging himself to death—or whether he ever had any suspicions about those sleepovers with young boys. It’s a question the rest of Jackson’s family should be asked as well.) The doctor will have his own spokespersons, as will, in order, AEG, the concert promoter; Colony Capital, Fortress Investment, and Barclays, the companies that had apparently bought up big chunks of Jackson’s debts; and Sony. Jackson went through dozens of managers, advisers and accountants over his 25 years of decline; these guys will be making appearances as well. The holy grail, however, will be …
3) The whispers of David Geffen. Geffen was a longtime unofficial adviser to Jackson, and undoubtedly the source behind some of the anonymous information that has come out about him over the years. His name won’t appear in any of the upcoming stories, of course, but he should be getting back into the mix soon. Look for gnomic statements about Jackson’s financial behavior in authoritative-sounding major pieces in tony outlets like the NYT, LAT or WSJ, or loucher but industry-specific ones, like Nikke Finke’s blog. And don’t think Arianna Huffington and Tina Brown aren’t calling him.
4) The kids. Jackson has three, two by his onetime wife Deborah Rowe, and another, colloquially referred to as “Blanket,” with an as-yet-unidentified surrogate.
It takes a lot to surprise me when it comes to such stories. Hitsville always assumes the worst! But I nearly did a spit-take when I heard legal analyst Diane Dimond, who is not an idiot, speak about the kids with Keith Olbermann last night. Maybe it’s been reported; but this was news to me and I bet it is to you, too:
Let me tell you: It has long been known by those of us who cover Michael Jackson that Michael Jackson is not biologically connected to those children. There was a sperm donor that made those children with Debbie Rowe. Many of us know who that sperm donor is. Michael Jackson handpicked that sperm donor. If he now suddenly comes forward and says, ‘I want my kids, take my DNA; those kids are mine, I want them.’ Then what happens? He’s gonna fight with Debbie, it’s just a mess. And then a surrogate can come forward for Blanket ….
5) The estate. Gerald Posner, who is also a smart guy, told Chris Mathews that Jackson’s affairs had been put into various trusts during the time of his child-sex trial. The implication seemed to be that he needed to protect his assets, though I’m not sure why. In a worse-case scenario, he’d get convicted of the molestation and plying-a-kid-with-alcohol charges, and then face civil action, but it’s hard to imagine he wouldn’t be able to afford simply to pay off any judgment. He wasn’t going to get a $100 million assessment against him, right? And even if a hurricane of charges made that possible, he, unlike OJ, had so much high-profile income accruing from blue-chip entities like Sony it’s hard to imagine his being able to keep collecting that money in the face of legal liabilities of that sort.
Anyway, the Journal and the NYT will go nuts in the coming weeks trying to untangle the state of Jackson’s finances and the hierarchies of the various claims against his estate. (Today, for example, the Times reported tentatively that Jackson’s mother, Kathleen, controlls his part of Sony/ATV through a trust.) Despite major stories on this in both papers it’s all still rather opaque.
One major question that I haven’t seen even asked in the coverage thus far, though it is by far the most salient, is what precisely is the status of Jackson’s partnership with Sony in the publishing company Sony/ATV. (The pair merged their publishing operations.) The Times reported some years ago that Sony had advanced him $300 million against what was said to be half of what was said to be Jackson’s half-ownership of the company.
Assuming that went though (if you read the story carefully you can see that it does not precisely say it did) and further assuming both that a) the above facts are true and b) Sony is a smart operation, Sony may come out of this with a secure 75 percent of the company and be sitting relatively pretty—assuming, finally, that the $300 million was not an inflated valuation for 25 percent of the company. (I take the point that the Beatles catalog is valuable, but it was valuable when Jackson bought it for $47 million; why is the ATV half of Sony/ATV worth $600 million today? Is it generating a modest five percent return, i.e., $30 million a year in income?)
On the other hand, the company’s ability to take control of that extra 25 percent portion may hinge on Jackson’ defaulting on the loan in some way that may or may not technically happen. The story is today’s Times makes some assertions that don’t quite jibe with its previous reporting. More on that in a second.
Specifically, there is the status of the debts held by two mysterious groups—Fortress Investment Group and Colony Capital—and then Barclays Bank. Fortress had an extraordinary hold on Jackson, carrying so much of his debt that it was collecting some $4.5 million a month just in interest from Jackson for at least a couple of years, according to the Times. Fortress has dropped out of sight of late as Colony stepped to the fore, but according to the Journal Colony held just a $24 million note on Jackson, which is how it acquired Jackson’s sleepover castle, Neverland Ranch.
In Jacko’s world, $24 million is chump change.
Colony was also said to be behind the pressure for him to get his ass back on stage and earn some money. As for Fortress, the Times says flatly today that Barclays now holds the big sum of $300 million against his share of Sony/ATV now, which is I assume the former Fortress debt. Next to the status of Sony/ATV, the big question about Michael Jackson right now is this debt; last year the WSJ said it was $400 million, so obviously neither paper is working with precise sources. And no one’s talking about what Sony got for its original bailout of Jackson, back in 2006.
Anyway, this big note has magicked itself up in the TV coverage to “Michael Jackson is $500 million in debt.” That’s sounds different from merely having a debt of that much, and is probably not correct; however much Jackson owes, it needs to be balanced against the value of his holdings, in ATV/Sony and his own personal operation. The Times says that could be worth as much as $100 million.
It’s possible, again, that the Sony bailout never went through and that the $400 million figure is a cumulative one, and not a new accumulation of debt, which might mean that his publishing holdings alone might cover his obligations. In other words, the estate might lose the publishing all together, but it would still have the rights to his recorded catalog (publishing, remember, is just songwriting royalties) and what I assume would be its share of his own personal publishing, a not insignificant asset.
On a final hand, remember that things had recently come to a serious pass with Jackson; he’d been backed into a corner and basically forced to get back on the road to get some money coming in. With his death it’s possible that some of the nuclear options that had obvious threats to his financial well-being could come to pass.
6) Collateral damage. The doctor, who went AWOL, is apparently someone who feels his interests are being served by doing what he can not to be involved in the investigation into Jackson’s death. It seems likely that he’s going to be a loser in this story. Sony may do okay it if gets its hands on at least part of Jackson share of the publishing, but still might end up with an unwelcome partner holding at least 25 percent of it. Hard to see how Colony comes out a winner, but it depends on how the loans are protected.
In the category of really fucked are the scores of people with lawsuits already pending against Jackson. Get in line, suckers! AEG, the company that thought it had finally met the getting-Michael-Jackson-back-on-stage challenge, seems on the hook for at least $30 million in outlays for the London shows, if news reports can be believed. (Plus it gets to refund some $80M-plus in sold tickets.) The company is putting on a brave face and saying insurance will cover its losses. Hard to countenance Lloyds of London would have risked $80 million on the chances of Michael Jackson showing up to do record signing, much less scores of concert, something he hadn’t managed to do for more than a decade. Even if AEG tries to do some cheesy Jackson family tribute concert in place of Jackson, could then string it out over 50 nights?
Jackson’s reputation will go into the toilet as all the stories people were afraid to tell when he was alive come to the fore. (A lot of them are going to be told by veterans of Jackson’s sleepovers.)
But no one’s more fucked than Jackson’s kids. They might as well start taking painkillers right now. Best case scenario is that they end up with Kathleen Katherine and Joe Jackson, Michael’s parents. Look how their children turned out.
7) The winners. Sony, ironically, will get one last post-iTunes cash infusion as nostalgic fans buy Jackson CDs; it will be interesting to see how much they eventually total, however. But remember that Jackson had a worldwide popularity, so Sony will be making bank disproportionately in less digital-savvy lands. (It’s also easier than it is in the U.S. to fudge sales records and royalty statement overseas.) As for Fortress, if it really was making upwards of $50 million a year on a $200 million note for a couple of years before getting bought out by Barclays it probably did fine. And if Sony arranged the Barclays refinancing Barclays should be fine as well, because Sony will just pay it for another chunk of the publishing catalog.
Those with stories to tell about Jackson will extract a lot of dough from tabloids not averse to paying for their information. The legal commentators will be riding high for the foreseeable future as a vast carnival of court proceedings spread out before them, involving hundreds of millions of dollars, drug use, incompetent advisors, shadowy behind-the-scenes figures, cartoonish figures elbowing for the spotlight, and the fates of three innocent kids.
And finally, the biggest winners of all will be Jackson’s family, hardened by years of financial game-playing with their doomed son; now free to run wild (there’s already reports of objects being moved out of Jackson’s house), they will be free to collect unimpeded the eggs from the Golden Goose who, alive, had been so difficult.
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