Nearly a year after Michael Jackson’s death, the managers overseeing his estate have stabilized its precarious financial situation, but at least one major liability still looms: a $300 million loan due at the end of this year.
Thanks to the surge of fan interest sparked by Jackson’s June 25 death last year, the singer generated an estimated $200 million posthumously, allowing the estate to pay off tens of millions of dollars in debt and avert foreclosure on the suburban Los Angeles complex where the singer’s mother lives, The Wall Street Journal reported Monday.
Using income from past music sales and advances against future ones, music-publishing royalties, a film-rights sale and various other licensing deals, the estate has paid off nearly $200 million of the $500 million debt the singer had used to fund his extravagant spending in his final years.
Jackson’s biggest financial obligation remains unresolved. A $300 million loan from Barclays PLC, backed by his 50 percent stake in a venture that owns the rights to 251 Beatles songs, matures at the end of the year.
The estate has collected as much as $125 million in royalties and advances from Sony Music, which has sold 31.5 million Jackson albums since his death and plans to distribute an album of previously unreleased music around November. Sony Pictures paid another $60 million for the rights to “This Is It,” the documentary about rehearsals for Jackson’s planned comeback concert series.
Mijac, the publishing company that controls the copyrights to songs written by Jackson, is on track to generate $35 million in royalties, and the estate is set to collect $11 million in dividends from the Beatles. Television and merchandise deals could generate another $10 million, while deals to create a videogame and two Cirque du Soleil shows based on Jackson’s music are set to provide additional revenue later this year.
All of this stands in stark contrast to the state of affairs when Jackson died. Despite being poised for what was heralded as a major comeback concert series, his finances were in shambles and he was unable to meet some of his most basic financial obligations.
Among the unpaid bills at the time of his death, Jackson had not paid $341,000 to Thomas Mesereau, the lawyer who successfully defended him against charges of child molestation in 2005. That bill and many other creditors’ claims, including invoices from several other law firms, have now been paid.
The singer was also months behind on utility bills for his longtime family home in Encino, Calif., where his mother, Katherine, now lives with his three children, along with the children of two of his brothers. The Los Angeles Department of Water and Power, owed nearly $9,000, was threatening to disconnect service.