“Jackson is surrounded by an ever-changing cast of characters, making it difficult to determine who, if anyone, is in charge of his business affairs."


The Wall Street Journal Peers Into the Deep Hole the Onetime King of Pop Has Dug for Himself
The Wall Street Journal is the latest publication to scrutinize the precarious state of Michael Jackson’s financial situation—one in which he’s reportedly at least $270 million in the hole. The story represents the most thorough look so far at the embattled icon’s predicament.

Jackson is surrounded by an ever-changing cast of characters, making it difficult to determine who, if anyone, is in charge of his business affairs,” write WSJ staff reporters Ethan Smith and Kate Kelly. “One camp has urged Mr. Jackson to sell some of his holding to avert financial disaster. Another group—which includes supermarket billionaire Ron Burkle—says such drastic action is unnecessary. More recently, the Rev. Jesse Jackson has emerged as an outspoken advocate for the singer and has personally interceded on his behalf with bank officials.”

Things have gotten so bad that Jackson recently worried about paying his electric bill, an insider told the reporters.

The story recounts Jackson’s heavy borrowing in recent years in order to make up what he was no longer earning from from record sales and touring, even as his expenses remained constant—a colossal $1.5 million a month, according to a source.

Things got even worse in April when the Bank of America informed Jackson that he was in default, which led to some of his advisors urging him to sell his 50% stake in Sony/ATV Music Publishing, including 251 Beatles songs, which analysts value at more than $1 billion (Jackson bought ATV in 1985 for $47.5 million). These holdings have already been pledged as collateral. Most feel that selling these assets would instantly get Jackson out of hock and put him back on firm footing, fiscally speaking, at least.

These advisors, Jones and Kelly point out, “included longtime associates such as entertainment attorney John G. Branca, veteran music-industry executive Charles A. Koppelman and Miami attorney Alvin I. Malnik. A long list of buyers has expressed interest in the business, according to several people involved with the matter. Sony itself has had its eye on Mr. Jackson's stake for years and ex-Beatle Paul McCartney has closely followed the company's history, according to a person close to him.”

Last month, distressed-debt specialist Fortress Investment Group bought Jackson's loans outstanding from the B of A., but his advisors have continued to press Jackson to sell the Sony/ATV holdings as the decision in the criminal case loomed, with its possible consequences including an estimated $10 million in legal expenses and a bankruptcy filing. Thus far, Jackson has refused to heed these entreaties, getting a dissenting opinion from Burkle.

“If the jury votes to convict, these questions may be moot,” the WSJ story concludes. “People close to Mr. Jackson on both sides of the debate say a conviction would likely trigger the sale of most if not all of his remaining assets, including Neverland, the Sony/ATV stake and the Mijac catalog.”