Michael Jackson, Inc.

by Zack O'Malley Greenburg

  “His creditors could say that, due to his passing, the owners of the estate have to make good on his debt in sixty days,” said Chris White, an analyst at Wedbush Morgan, shortly after Jackson’s death. “Then you’d have to put this joint venture on the block, and that would be a distressed sale.”16

  Essentially, there was a danger that creditors could force Jackson’s estate to offload his holdings at a fire-sale price. By 2009—in the depths of the Great Recession—estimates of the gross value of Sony/ATV ranged from $750 million to $1.5 billion (it’s now thought to be worth somewhere in the neighborhood of $2 billion). But a quick, mandatory sale might have fetched a sum on the lower end of that spectrum, leaving the estate with less than enough to pay back the singer’s debts of over $400 million.

  The estate was able to keep the Jackson’s stake in the catalogue, however, thanks to moneymakers like concert flick Michael Jackson’s This Is It. Just a few days after the King of Pop’s death, Branca was shown video footage from Jackson’s rehearsals and realized there was silver-screen potential. Even as the singer’s family tried to stop the estate from turning the footage into a film, insisting Jackson wouldn’t have wanted it released, Branca and McClain started shopping the idea of a documentary to the big movie studios.

  Were Jackson alive, it’s possible he would have quashed the film at the last minute, as he nearly did for the “Thriller” video—and he would have missed out on a major payday. Fox offered $25 million; then Warner, Sony, and Paramount jumped in. Branca and McClain raised the price to $35 million, then $50 million. When everyone went up to $50 million, they told Sony’s executives they could have it for $60 million plus a hefty cut on the back end; Sony agreed. This Is It would go on to become the highest-grossing documentary ever, ultimately earning the estate about $200 million worldwide.17

  The pact was one of many blockbusters racked up by the estate’s executors, whose aggressive deal making could be the subject of an entire book in itself. Shortly after Jackson passed away, Branca and McClain landed a ten-project, ten-year deal with Sony worth $250 million—the most lucrative record deal of all time—to put out unreleased material and anniversary editions of Jackson’s albums. The first product of the pact was a two-disc set called This Is It; released in conjunction with the film of the same name, it became the third-bestselling album of 2009.

  By the end of the year, Jackson had sold 8.3 million albums overall in the US—more than any other artist that year, nearly twice as many as the number two artist, Taylor Swift—and perhaps 15 million more worldwide. The estate scored another $20 million for a Jackson-themed video game, $10 million for a renegotiated deal with merchandizer Bravado to create T-shirts and the like, and a few million more for a rereleased version of the autobiography Moonwalk.

  The estate trimmed the rate on a $75 million loan associated with the Mijac catalogue from a whopping 17 percent (courtesy of his late-career mess of advisors) to a much more manageable 6 percent before paying it off altogether in late 2011. Branca and McClain also negotiated the rate on the Sony/ATV loan from 5.8 percent to 2.9 percent,18 eventually upping the estate’s annual guarantee from the catalogue to around $25 million as the publishing company continued to grow.19

  According to court documents, the estate had pulled in gross receipts of $265 million through October 31, 2010, adding another $48 million by year’s end. Of the former sum, about $160 million was paid out, divided between creditors ($48 million), debt service ($38 million), Jackson’s family ($5 million), the entire mortgage on the Hayvenhurst property where his mother lived ($4 million, which saved the house from foreclosure), and others.20

  Still, the estate’s management team has had its share of critics, particularly among Jackson’s siblings. In the summer of 2013, Randy once again questioned the legitimacy of his brother’s will and called for Branca and McClain to resign immediately in a letter also signed by siblings Janet, Rebbie, and Jermaine (who’d described McClain in a book he’d released just a year earlier as “a friend for life . . . almost an adopted brother”21 and ultimately rescinded his signature).

  They accused the coexecutors of taking advantage of their elderly mother and exploiting Michael for financial gain, and seemed particularly incensed that a judge in 2009 had authorized the executors to receive a 10 percent commission on the estate’s earnings.22 There’s little doubt that Randy would have liked to be the one getting a cut, as it appears he did for the role he played toward the end of his brother’s financial career (a 2006 court document that lists Michael’s outstanding bills at the time includes a debt of $1,650,000 to Randy).23

  A bizarre series of events followed. Katherine went missing, and many news outlets reported that she’d been kidnapped by members of her own family. It turned out that she’d been taken by some of her children to a spa in Arizona, where she stayed for a number of days, unaware of her grandchildren’s desperate attempts to reach her after she left the Calabasas home where she’d been living with them.24

  Katherine eventually returned to California and wrote that, while in Arizona, her cell phone had been taken away, her room phone was dead, and her television didn’t work despite her repeated requests to have it fixed. Tito’s son TJ Jackson, who’d been named temporary guardian of Jackson’s children in Katherine’s absence, was appointed coguardian and said that his grandmother had been lured to the spa by someone pretending to be a doctor. Her lawyers suggested that the events may have been a plot by her children to “gain control over Mrs. Jackson as a means to get at funds.”25

  Michael Jackson knew all too well how his family operated. His parents had brushes with bankruptcy, and many of his brothers encountered serious financial difficulties throughout their lives. Jermaine was threatened with jail time over unpaid child support in October 2013—around the same time he reportedly bought a Ferrari.26 Given his family’s history of that sort of behavior, his decision to exclude all but his mother from the will seems understandable.

  Jackson’s siblings ended the ordeal further than ever from their brother’s assets: they hadn’t been able to convince Katherine, the only immediate family member of theirs with legal standing in the dispute, to challenge the executors. Perhaps it’s because she realized their 10 percent fee wasn’t so pricey compared to what managers of other major acts charge. “Most managers want 15 percent,” says Chuck Leavell, who plays keyboards for the Rolling Stones.27 Longtime U2 manager Paul McGuinness reportedly received a 20 percent cut of the band’s proceeds; Elvis Presley famously paid his manager 50 percent of his earnings.

  “The bottom line is these guys did an amazing job and created amazing results for the estate,” says Katzenstein of Branca and McClain. “The judge looked at that and said, ‘You know what? You’re entitled to your fee.’ ”28 New cash continued to flood the estate’s coffers, and by the end of 2012, all of Jackson’s personal debts had been paid off (though a low-nine-figure business loan remains attached to his ATV stake).

  In a move separate from the estate but with implications for the entire Jackson family, Katherine Jackson launched a wrongful death suit in 2013 against AEG Live. The trial centered on the question of whether or not the concert promoter (as opposed to Jackson) had hired Murray, the doctor who administered the fatal dose of Propofol, and whether he was unfit to care for Jackson. An affirmative answer on both counts would have meant a hefty payday for the Jacksons; some speculated the total could exceed $1.5 billion.29

  During the five-month trial that followed, the King of Pop’s final days were relived in salacious detail. A parade of expert witnesses testified about his doctor-shopping and use of prescription painkillers; his family’s lawyers produced callous emails from AEG executives referring to Jackson as “the freak”; at the lowest point, pictures of Jackson’s naked corpse were shown.

  In October 2013, the jury decided in favor of AEG, determining that although the company had hired Murray, he wasn’t unfit to care for the singer. The decision eliminated the possibility of a massive
windfall for Jackson’s brothers, sisters, and father. They would have had access to the funds paid by AEG via Katherine—either directly, in the form of handouts, or by inheriting her share whenever she passes away. Though she’s free to give them money that she receives from her son’s estate, his will didn’t provide for them, so his postmortem success won’t spill over to them when she’s gone.

  The estate’s funds won’t be distributed to Jackson’s children’s trusts until all pending litigation is complete and all claims are settled. (In October 2013, the IRS levied a whopping $702 million tax bill stemming from a dispute over Jackson’s worth at the time of his death.30 The estate maintains it’s in compliance with tax laws and has appealed the move; legal action figures to drag on for quite some time.) But the kids remain financially well positioned. Their expenses are covered—including luxury housing in an exclusive neighborhood on the outskirts of Los Angeles, vacations with friends in tow, private school tuition, and charitable contributions in their names.31

  Of course, there’s more to life than the trappings of success, and Jackson’s death has clearly taken a toll on his children. His daughter, Paris, was hospitalized in June 2013 after an apparent suicide attempt. But she seems to have recovered; Jackson’s oldest son, meanwhile, already has a budding entertainment career—he made his acting debut in a recent episode of 90210.

  * * *

  Despite the unsavory details dredged up by the trial, Jackson’s legacy seems to be healthy. The estate pulled in an estimated $130 million in 2013, up slightly from 2012, and the singer’s image appears to be at its best state in decades. In 2012, Pepsi paid the estate $6 million to put Jackson’s face on one billion Pepsi cans—the King of Pop’s first major endorsement deal since the 1993 allegations.32

  The partnership was on display at New York’s Gotham Hall on a late-summer evening in 2012 for the launch of BAD 25, an anniversary album that featured remastered and remixed versions of Jackson’s 1988 classic (a Spike Lee documentary on the original aired in November 2012). Spotlights flooded the red carpet (which was actually blue, representing Pepsi) as news cameras from all the major networks rolled. A handful of stars, including singer-songwriter Ne-Yo and superproducer Swizz Beatz, had gathered to reminisce on the King of Pop—and imagine what might have happened had Jackson gone on to launch his comeback tour.

  “It would have still been going on, one hundred percent,” said Swizz Beatz. “Come on, man, like, our generation being able to be at an MJ concert? Even if he just stood there and the songs played and he didn’t even move, it would still be like, ‘Yo, that’s MJ right there!’ ”33

  The producer was working with Jackson on new music shortly before the singer’s death and remembers him talking about improving his diet and preparing to showcase some new dance moves and songs.

  “Man, all he kept saying was, ‘This is it, this is it, this is it,’ ” Swizz Beatz remembered. “I didn’t literally know that that was going to be it. I thought it was going to be it in the literal sense of about to take over the world.”

  Jackson’s postmortem This Is It may not have been the same as a sold-out concert series, but it proved to be a crucial step for his legacy. The amount of cash generated helped his estate keep assets like the Mijac catalogue and his share of Sony/ATV for his heirs. And it reaffirmed the public’s interest in the King of Pop—so much so that major brands felt comfortable shelling out millions to renew their associations with him.

  It wasn’t just This Is It, though, that rocketed Jackson to arguably his highest level of popularity in a quarter of a century. His death itself, one of the most significant news events of the social media era, served to turn the eyes of millions of people to him. And instead of seeing the scandals, the plastic surgeries, the P. T. Barnum–inspired eccentricities (real or constructed), they saw the King of Pop in his prime. He has since been crowned by a new generation of fans—the ones who, along with the loyal old guard, have sent Jackson’s YouTube Vevo views past 1.3 billion since 2009 (on par with Taylor Swift and Katy Perry, and twice as many as Justin Timberlake). By the end of 2013, he boasted 65 million Facebook likes, more than Justin Bieber or Lady Gaga.

  The resurrected Michael Jackson, Inc. wasn’t constrained by the struggles that plagued its founder toward the end of his career: in the last eight years of his life, Jackson did not release a new studio album or go on tour. Within just three years of his death, however, he would accomplish both feats, and the financial results were staggering.

  Chapter 18

  * * *

  IMMORTAL

  It’s about ten minutes before the start of the Michael Jackson One show in Las Vegas, and already the tabloid media’s presence can be felt. On the sides of the theater, floor-to-ceiling screens display headlines created specially for the performance: “Squirrel Saves Woman,” “Bubbles’ Mystery Friend Revealed,” “Woman Teleports to Cirque Show.”1

  John Branca is sitting fifteen rows from the stage, grinning as he surveys the headlines. He’s in town for the debut performance at the Mandalay Bay Resort and Casino, in a theater renovated exclusively for One, and he’s got every reason to be excited. The show is partly his brainchild, a joint venture between the Michael Jackson estate and Cirque du Soleil.

  Suddenly, a dozen figures wrapped in red trench coats—the ersatz paparazzi injected into the show to give the audience a taste of Jackson’s life—start marching up the aisle, bristling with microphones and cameras, faces obscured by dark fedoras and sunglasses. One points in Branca’s direction, cueing a rush toward their target. “Paparazzi’s coming to get you,” says his friend Johnny Lockwood.

  But they’re after someone sitting the next row up. They jostle each other to get closer to the unsuspecting audience member, each motion punctuated by an exaggerated click of their shutters. One of them almost hits Branca in the face with a boom microphone, then scampers off, followed by the rest of the faux newshounds. Was it worse with Michael himself?

  “Yeah,” says Branca. “They’d knock you over.”

  * * *

  The roots of One trace back to late 2009, when Branca entered into preliminary talks with Guy Laliberté, the fire-breathing billionaire circus performer who founded Cirque du Soleil. The subject was a new spectacular called Michael Jackson The Immortal World Tour.

  Cirque had launched tribute shows before, including the Beatles-themed Love! and, later, Viva Elvis. Branca wanted to start with something similar; if it proved to be successful, the estate could launch a traveling arena show, entertaining ten thousand to twenty thousand fans per night. There was one problem: the fire-breathing billionaire was in outer space.

  At age fifty, Laliberté had decided he needed a new challenge in life, so he shelled out over $20 million to make a trip to the international space station with a private interstellar travel company called Space Adventures. Branca had to wait nearly a month for him to return. When they finally met in Montreal, the attorney noticed Laliberté was chain-smoking cigarettes.

  “Guy, did they let you smoke like that in the space capsule?”2

  “No, they didn’t let me have cigarettes,” he sighed.

  Soon the topic turned to business.

  “Michael was the greatest entertainer that ever lived,” Branca began. “We need a live show.”

  “We need two shows.”

  “I agree,” said Branca. “But we have to do the one in Las Vegas.”

  “No, we need [first] a traveling concert show.”

  Branca was impressed by Laliberté’s passion. After weeks of back-and-forth, they began to negotiate a joint-venture deal to launch Immortal as a world tour, with a permanent show in Las Vegas to follow. He suggested some character sketches: one to represent Jackson himself; a mime to reflect Jackson’s admiration for Marcel Marceau; perhaps Bubbles the chimpanzee as well. He also helped pick the songs and gave input on just about every aspect of the show, kicking off a deep and lucrative collaboration between the estate and Cirque.

  Foll
owing its Montreal debut in October 2011, the show swung through Canada and the northern US before stopping for nearly a month of performances at Sin City’s Mandalay Bay Events Center during December. The mini-residency was accompanied by a makeshift museum for the Michael Jackson faithful—complete with some of his iconic military-inspired jackets, one of his trademark rhinestone gloves, and one of his vintage Rolls-Royce sedans.

  One of the most fascinating parts of the exhibit was a reconstruction of Jackson’s Neverland library. Karen Langford, whose duties with the estate include overseeing its archives, remembers picking through the 30,000-square foot Southern California warehouse in which Jackson’s books were stored, trying to decide which ones should make the cut. There were so many that she could have laid them end-to-end from one side of the building to the other—and back—with lots more left.

  “In just this particular warehouse, there is one wall that is floor to ceiling—three stories tall—that has boxes and boxes of nothing but books,” she says. “It’s massive. And I promise you that he looked at every one of them.”3

  During the month in Vegas, Immortal drew over 150,000 people to the Mandalay Bay Events Center; the packed house on Immortal’s first night included entertainers CeeLo Green, Jay Z, and Beyoncé. They looked on as a troupe of acrobats floated over the stage, contorted themselves into refrigerator-sized books, and popped out of coffins to a soundtrack of Jackson’s finest works.

  “We have all done our best to make this a celebration of his essence in his absence,” said the show’s musical director, Greg Phillinganes—who started working with Jackson back in the late 1970s—shortly after the show’s debut. “His passion for humanity . . . his commitment to excellence, his flair for the big show, we’ve tried to incorporate all those factors.”4