Michael Jackson makes money abroad, but overall finances remain a mystery
Friday, November 28th 2003, 12:00 am
By: News On 6
LOS ANGELES (AP) _ Michael Jackson, whose albums once generated tens of millions of dollars in sales, would like the world to believe he has a billion dollar fortune at his disposal.
Others who have tried to estimate the pop icon's wealth say his status is so precarious he has trouble paying his bills.
The truth about Jackson's finances is as mysterious as what goes on behind the gates of his Neverland estate. Depending on the source, the man who once danced atop the pop-music universe is either spending his way into bankruptcy or presiding over a wealthy music and real estate empire.
Forbes magazine has estimated Jackson's net worth at $350 million, a figure that would be much higher if not for an estimated $200 million in debt. His assets include his 2,600-acre Santa Barbara County ranch, homes in Las Vegas and Encino, Calif., and other properties.
His stake in Sony/ATV, which includes catalogs for the Beatles and many Elvis Presley songs, is estimated by Forbes to be worth at least $350 million. Jackson bought ATV in 1985 for about $47.5 million and sold it to Sony for about $95 million in 1995, retaining a half interest.
According to some newspaper reports, his Sony/ATV stake helped Jackson secure a $200 million loan in 2001 from Bank of America to fund his living expenses and the cost of producing his ``Invincible'' album. Sony Music would not comment on the report, and Jackson's financial adviser did not return calls seeking comment.
Jackson also continues to receive steady income from his own recordings, although his album sales have spiraled downward for years. He hit his peak in 1982 when ``Thriller'' generated $115 million in sales, his best-selling album.
While Jackson's star has faded in the United States, his popularity abroad has helped prop up his financial empire.
His latest greatest hits album debuted last week at only 13th on the U.S. charts but No. 1 in Britain, while selling well in Australia, Ireland and New Zealand. Next spring, a Japanese clothing maker is scheduled to roll out an ``MJ'' line of business suits that will sell for about $480 in U.S. dollars.
This week, the Wakita Co. said it would move forward with its plans despite accusations that Jackson molested a 13-year-old boy. A spokesman said the contracts to sell the suits at department stores were delayed because the allegations surfaced just as the deals were about to be signed.
``If he is convicted, it will not be good for our image and we will have to reconsider the plan,'' Wakita Co. spokesman Junichi Ota said from company offices in Japan.
Jackson has been dogged for years by rumors of souring finances. Declining record sales, a fading endorsement career, lawsuits, settlements and the singer's lavish spending habits have created the impression that his financial house is a shambles.
In a BBC documentary aired in February on ABC, he is seen buying millions of dollars worth of items, including a chess set, urns, tables, paintings and other objects from a gift shop inside a Las Vegas casino.
He tells the reporter he is worth $1 billion or more. He also is shown telling a young visitor to Neverland that he plans to build a waterpark on the property.
The Neverland estate remains one of Jackson's prime assets. He paid $14.6 million for it in 1998. Real estate appraisers estimate the property's current market value at more than $50 million, according to a report in the Santa Barbara News-Press. It now includes amusement park rides, a train and a zoo, requiring about $3 million in annual operating costs.
The closest the public has come to gaining credible insight into Jackson's finances came in a lawsuit filed in May in which a former adviser alleged Jackson was ``a ticking financial time bomb waiting to explode at any moment.''
Union Finance and Investment Corp. of South Korea claimed Jackson owed the firm $12 million in fees and expenses, plus interest.
Jackson had hired Union Finance in 1998 to help straighten out his finances, according to the lawsuit. The firm said it soon discovered that Jackson had only two months worth of available funds.
A month before the lawsuit was settled, exhibits containing Jackson's financial details were sealed by a judge. The agreement included a confidentiality clause, a standard part of many of the lawsuits Jackson has settled in the past.
Jackson has been the target of numerous lawsuits over the years, many of which have cost him millions.
In 1993, he paid an estimated $15 million to $20 million to the family of a boy who accused him of molestation. Jackson never faced charges.
In January, Sotheby's auction house sued Jackson's production company, saying the pop singer bid $1.3 million for two paintings and then changed his mind and refused to pay. The lawsuit asked the court to award at least $1.6 million in damages.
In March, Jackson was ordered to pay concert promoter Marcel Avram $5.3 million for pulling out of two millennium concerts.
Not every lawsuit has gone against the 45-year-old singer.
In 1997, five former Neverland employees lost a wrongful termination suit against Jackson and were ordered to pay $1.4 million in attorney fees and $60,000 in damages.
A jury rejected claims that the employees were fired for cooperating in a probe into the 1993 molestation allegations.