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AEG’s other major challenge will be collecting on the insurance policy, which provided only partial coverage to begin with—especially if it’s determined that Jackson’s death was drug-related or a suicide.
I.B. BAD ON WHAT'S NEXT IN JACKSON SAGA
Will Set to Name Katherine and Kids as Beneficiaries, Branca and McClain Co-Executors
From the moment the news of his death erupted across the Internet June 25, Michael Jackson became a mighty moneymaker once again. In the next three days, a half million physical and digital albums were sold, and Sony Music is racing to fulfill orders for 7 million albums, 3 million in the U.S. alone. He also sold a staggering 2.4 million individual tracks, debuting with 48 of the 200 top slots on the Digital Songs chart.
 
The earthshaking events of recent days are coalescing into a battle for control of Jackson’s estate, with the prize in the billions. On the front lines of this conflict are several individuals who have deep ties with the late superstar. The key players include Jackson’s trusted longtime attorney John Branca, whose numerous activities on behalf of his client range from making the 1985 50/50 deal with Sony/ATV for the Beatles catalog to making a series of nimble moves that kept Jackson from being buried under massive debt in recent years; fellow Jackson lawyer Joel Katz, a highly regarded major player; and Frank “Tookie” DiLeo, who managed Jackson during the gravy years of 1984-89.
 
Another featured player in this drama is AEG Live’s Randy Phillips, who in essence bet his career on the success of Jackson’s “This Is It” run of 50 shows at London’s O2 Arena. The latest chapter in their interwoven stories began when Phillips brought in Branca, Katz and DiLeo, each of whom had close relationships with the late artist, to protect AEG Live’s investment in the O2 run by increasing the chances of his actually doing the 50 shows.
 
Concurrently, Phillips’ boss Phil Anschutz was himself involved behind the scenes, bringing in fellow billionaire Tom Barrack to restructure Jackson’s massive debt. Here we flash back to 1983, at the height of the history-making Thriller phenomenon, and seven years after Epic topper Ron Alexenburg signed the Jacksons, bringing Michael to CBS Records.
 
Just as Jackson was cementing his superstar status, power brokers behind the scenes were forcing out his manager, Freddy DeMann, with Epic promotion head DiLeo handed the reins. After a five-year run, DiLeo was himself unseated, as his protector, Walter Yetnikoff, was being forced out as the head of Sony Music, formerly CBS.
 
Arnold Stiefel and partner Randy Phillips were poised to take over, but those same power brokers once again intervened, pushing them aside and installing Sandy Gallin and Jim Morey. The incident caused Phillips to become obsessed with Jackson, and nearly two decades later, he seized the opportunity to act on his obsession.
 
Which brings us back to the myriad complexities of the present situation. Branca, who has a copy of Jackson’s most recent will in his possession, is co-executor of the estate, along with John McClain, making him responsible for helping manage the asset and protecting the heirs as well as Jackson’s mother Katherine. What’s more, Branca and Katz will, in all likelihood, be the attorneys for the estate, continuing the roles they played for Jackson in life. They’ll be extremely well remunerated for their efforts; most believe their legal fees will run into the millions.
 
These roles could conceivably pit Branca and Katz against father Joe Jackson—who is not named in the will, though his wife is—his advisor Jesse Jackson and the recently retained “Jackson legacy” attorney Londell McMillan. At stake is an estimated $2-3 billion over the next 10-15 years, largely the result of Branca’s efforts on Jackson’s behalf over the years.
 
Also in play are the masters to Jackson’s albums, which will revert to the estate in five years, part of his sweet deal with Sony Music: a 50/50 joint venture plus an artist royalty.
 
Phillips, meanwhile, is desperately searching for ways to make up for the massive losses involved in the aborted undertaking. The red ink includes $30m in production costs, $10m of it an advance to Jackson. Then there’s the matter of how to deal with the fans who shelled out the $90m for tickets; AEG fervently hopes a majority of them will choose to hold on to their tickets as “keepsakes.”
 
Speculation is also swirling that some of the 50 dates could be used for memorial concerts at the AEG-owned O2 Arena, which could otherwise be dark for months. Another scenario involves creating a CD, DVD, TV special and/or feature film from the rehearsal footage, which would undoubtedly bring in huge revenues.
 
AEG’s other major challenge will be collecting on the insurance policy, which provided only partial coverage to begin with—especially if it’s determined that Jackson’s death was drug-related or a suicide.
 
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