New court documents bring to light the overwhelming debt that Michael Jackson accumulated at the time of his death in 2009. Known worldwide as the “King of Pop”Jackson left an indisputable musical legacy, but also a critical financial situation.
Michael Jackson died on June 25, 2009 in The Angels, at age 50, due to apparent cardiac arrest. According to court documents obtained by People on June 21, 2009, Jackson had accumulated debts of more than $500 million.
After his death, financial responsibility for launching the tour fell to his estate. Jackson owed about $40 million to concert promoter AEG. The executors of his estate John Branca and John McClain, along with their legal advisors, stated in a March 2024 filing that the estate was on the brink of bankruptcy when Jackson died. The estate is now valued at more than $2 billion.
“The estate’s debt has been eliminated and virtually all creditor claims and litigation have been resolved,” reads the 2024 petition. The executors were able to renegotiate existing debts, allowing the estate to avoid losing assets. The renegotiations included debts secured by the Mijac Music catalog and the equity stake in Sony/ATV.
The night before his death, Jackson held a six-hour dress rehearsal at the Staples Center from Los Angeles, preparing for their concert series “This Is It” in it O2 Arena in London. This series of concerts was part of his comeback plan, which included the creation of new songs and extensive rehearsals to perfect the shows that would take place from July 2009 to March 2010. However, his exorbitant spending habits generated a cumulative debt of 30 million dollars annually, according to the Los Angeles Times.
During the civil liability trial that began in August 2013, the certified public accountant William R. Ackerman He testified that Jackson had spent large sums on charitable donations, gifts, trips, art, and furniture. “He spent a lot of money on jewelry,” Ackerman added at the time.
By 1998, Jackson owed $140 million, and between 2001 and 2009, his debt increased by approximately $170 million. Ackerman also mentioned that interest on Jackson’s loans was growing, ranging from just under 7% to 16.8% annually.
According to The New York TimesJackson used his stake in a catalog of songs, which included Beatles hits, as collateral for loans of about $270 million obtained from Bank of America, which were later sold to Fortress Investment Group in 2005.
In August 2023, the accusers Wade Robson and James Safechuck were given the green light to proceed to trial against Jackson’s companies, MJJ Productions and MJJ Ventures, for alleged sexual assaults when they were children, according to court documents obtained by People.
The 37-page resolution outlines allegations that MJJ Productions staff were complicit in the alleged abuse and helped cover it up. The plaintiffs allege that the policies allowed Jackson to be alone with minors, some of whom slept in his room. Jackson’s estate denies any liability.
Randy Phillipsformer CEO of AEG Live, declared in 2009 to Rolling Stone that Jackson “I was ready to clean up my finances”. Phillips stressed that Jackson “I wanted to stop living like a bum and make money again.”. After Jackson’s death, his estate has faced major challenges in covering outstanding costs and protecting the estate’s assets.
With the estate’s agreement with Jackson’s three children, Prince Jackson, Paris Jackson and Bigi Jacksonthe probate court oversees the estate’s finances and expenses. Every six months, attorneys must request court authorization to receive 30% of their compensation while being allowed to keep 70%.
In July 2018, Sony Corporation acquired the equity interest in EMI Music Publishing for an estimated $300 million. The deal represented a significant return for Jackson’s estate.
Furthermore, it was mentioned that lawsuits against the estate in Europe and Japan were mostly resolved or concluded in favor of the estate.
In short, despite efforts to stabilize the financial condition of Michael Jackson’s estate and resolve pending litigation, challenges remain, including the recent legal battle initiated by Robson and Safechuck.
