How did Michael Jackson lose all his money?

How did Michael Jackson lose all his money?

He made a total of $175 million on Thriller. At the height of his fame in 1988, he earned $125 million (Forbes Mag source). His lawyer John Branca negotiated for him to buy the Beatles catalog for $48 million. It generated $11–$18 million a year life time income. His living expenses were three times that much. Michael bought Neverland for around $19 million. He put in excess of $37 million, building the amusement park, zoo, movie theater. He peppered the grounds with millions of dollars worth of commissioned bronze statues. It cost a minimum of $5 million a year to maintain. It had a salaried full time staff, up to 150 people. The interior was littered with literally hundreds of millions of dollars worth of marble statues, gold candelabras, gilded pianos, antique toys, mannequins, figurines, comissioned portraits, arcade games and grandiose clutter.

Michael had several estates besides Neverland, the Jackson family compound Hayvenhurst worth $4.2 million, a luxury condo in the gated millionaire enclave of Studio City, CA, a three story condo in Encino CA.

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He had an extensive art collection insured for $600 million, and antiques collections. He flew in private chartered luxury planes that were tricked out like palaces in the sky at an average cost of $198,000 per ride.

His possesions fill 6 warehouses in Los Angeles and it cost $1,485,000.00 a year to store, maintain and keep an archivist.

Michael spent months at a time in the most luxurious hotels in the world. He would rent an entire floor (or two) of hotel suites for $9,000 -$12,000 per suite per night.

Michael actually held the record for highest rent paid in NYC for many years after he rented an upper east side townhouse for $75,000 a month while working on Off the Wall and The Wiz. This is in the late 1970’s when the average rent was $105.00 a month.

Michael borrowed $25 million at high interest against his own company MiJac for living expenses. The interest totaled $67 million. He also borrowed at a high interest rate, $300 million against his part ownership in the SONY ATV music publishing catalog.

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Michael was a profligate spender. Example: he bought 3 bottles of a perfume called Gianni Vive Sulman Parfum VI at a cost of $89,000 PER BOTTLE. He paid $1.5 million for the Gone With The Wind Academy Award statue, $659,000 for a ferris wheel, $978,000 for a custom made carousel.

He had 75 cars registered in his name. He comissioned a $2 million replica of a 1909 Detamble Model B Roadster. He owned at least 6 Rolls Royces. His favorite Rolls Royce was a 1988 $350,000 Phantom which is now in a storage warehouse in Los Angeles. He owned a 1997 Neoplan bus with an 18K gold bathroom and hand embroidered crown on the plush carpet. Price $2.7 million. A 1999 Silver Seraph Rolls Royce Limo clad in 24K gold, antiques ,cut crystal, full service bar, video game consoles. In 2001 when he was “broke” he bought a $98,000 Bentley.

Court documents filed in LA superior court Sept 1999 for his divorce from Debbie Rowe show his financial disclosure for basic cost of living at the time averaged a whopping $2,339,300 PER MONTH (yes you read that right, two million three hundred thirty nine thousand and 300 dollars a month).

The breakdown follows:

  • $95,700 a month on gardening (Neverland)
  • security, 52,900 per month.
  • Upkeep on zoo and Amusement park, $66,200 per month.
  • Housekeeping and PR expenses $60,000 per month.
  • Legal fees $178,100 per month.
  • $120,000 personal and property insurance per month.
  • $25,600 monthly medical needs.
  • $42,000 gifts.
  • $85,500 monthly transportation.
  • $475,300 monthly costs for MJJ productions, Optimum productions.

Michael owned and paid expenses for the Jackson family compound in Encino, CA since the 1980’s, where his mother lived. He initially bought the mansion, had it bulldozed to the ground and an even BIGGER mansion completely rebuilt to his taste as the new Jackson family compound, with ponds, swimming pool, statuary, fountains, recording studio, mini zoo. The mortgage went into arrears around 2006–2007.

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Divorce settlement to Debbie Rowe, $10 million lump sum plus a $2 million house (Washington post 2005).

10 Carat diamond and platinum custom Engagement ring for Lisa Marie Presley, $270,000.

He paid Disneyland Paris $2 million per day to close down so he could have it to himself.

Michael’s earning potential dwindled after the 1993 child molestation allegation. Product endorsements disappeared. His clothing line cancelled. Record sales never did as well as off the Wall, Thriller or Bad.

He had not been on tour since 1997. His tours were wildly expensive and enormous productions. Vesudes the ysual tour expenses an artist is respoy for there were millions of dollars in special effects and personal luxuries, which the producers would not approve but Michael wanted, coming out of his pocket. He could only perform three times a week due to the exertion but paid dancers $550,000 a week out of his pocket for their full time employement.

In the nineties legal and personal troubles caused him to become deeply distrustful of everyone. He disbanded his original business team and advisors, most of whom were advising him well, and replaced them with a rotating carousel of sycophants, yes men, enablers, parasites, questionable characters. He also blamed everyone from longtime trusted manager Frank DeLeo to Quincy Jones for Bad not outselling Thriller and fired them all.

His expenditures remained as outlandish as ever but there was now no one to execute lucrative ideas or see profitable, or even charitable, projects to completion. He overspent, even for a multimillionare and there was no one to tell him no. Anyone who tried was promptly gotten rid of. He began to rely heavily on high interest loans and advances to fund his lifestyle. He would take from one of his companies to fund another.

Many of these new advisers were kept incommunicado with each other or actually competing with each other, which resulted in contradictory advice. They knew they were considered disposable and there was no loyalty on either side. There was only greed on their part and favoritism on Michael’s part, which creates unfavorable outcomes. His income was enormous and stable and had not dipped below $13 million a year since 1979. Lawsuits were expensive, but not as draining as his lifestyle.

His finances were collapsing due to chaotic handling and whimsical overspending.

Sales of INVINCIBLE were “disappointing” in 2001 and despite the SONY /Tommy Motolla / Michael Jackson blame fest, claims to have sold 10 million albums. His earnings that year were $34 million but that money (taken as advances and loans) had already been spent on his lifestyle before it was in his hands.

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Sony spent $40 million on producing and marketing Invincible in a time when the average cost for making an album was $ 1 million. Jackson claimed racism when Sony would spend no more $. He borrowed millions using his half of the ATV catalogue as collateral, putting himself in conflict with his record company and SONY ATV business partner. The 22% interest on that debt was unaffordable even for Jackson but he believed Invincible would be a mega hit and he would recoup. Michael put himself at risk for becoming financially insolvent. The unproductive war with SONY had begun.

‭Michael lived in an abundant amount of luxury even for a multimillionaire. One of his homes in Las Vegas had, among other amenities, a full size medieval chapel. He wore custom made sterling silver boots to a white house visit. His bed quilt was covered in hand sewn gold sequins and cost $50,000. He paid close to $10 million for a 17th century oak floor from a French Chateau to be brought to Neverland. The grandiose clutter was astounding.

Michael earned $16 million making Captain Eo. He spent it on a Rolls Royce,Mercedes Benz, hotel suites, designer clothes, statues, antiques, toys and a train.

In discussing such astronomical amounts of money earned it is impossible for most of us to fathom what Michael spent it on. It’s difficult to understand his financial difficulties for two decades prior to his death. I have to remind myself while writing this that if you earn $50 million a year but spend $250 million a year, it’s a problem.

In 1994, despite earning well over $118 million Michael arranged a $300 million pay out from SONY in exchange for a percentage of the Beatles catalogue (known as the Sony /Atv merger), to pay debts and fund his lifestyle. Michael sold a piece of his most valuable asset to a corporate entity he was antagonistic to, and in future would accuse of trying to kill him . Michael became a part of the SONY music publishing division but SONY NOW OWNED A PIECE OF THE CATALOG and this merger became a constant issue full of paranoia, accusations, lawsuits.

Michael, along with a consortium of investors, bought a 40% share (Mj personally owning a 10% share ) of EMI MUSIC publishing catalog. His cost is unknown however his estate (family) just sold it to SONY for $258 million. Some of the catalog songs were Michael’s and he can now (as of 2018 in the USA ) be heard singing in the background of commercials as Sony sells his “Off The Wall ” and “Thriller” music masterpieces as commercial jingles. Truly tragic.

The Dangerous tour and album earned Michael close to $100 million. The tour was cut short due to Michael’s opioid addiction. Liz Taylor, dripping in diamonds and with cameras rolling, took Michael to London where she handed him off to Elton John, who was the person who REALLY took him to rehab. Michael stayed one week at the $15,000 per day facility before he called his manager to check him out. Thus began, by not completing rehab, drug problems on and off for the remainder of his life and sycophants that catered to his whims at the cost of his life.

The tour production company sued him for breach of contract (because he did not finish Dangerous tour). Undisclosed Multimillions. After paying his usual zillions in tour and personal expenses, the lawyers and settlement, taxes,other costs and his own salary, he donated half of the remaining to charity, among them his own charity organization Heal The World. Michael technically “donated tour profits to charity” according to his image control experts.

He then sold the broadcast rights to his Dangerous world tour to HBO for $20 million.

Michael earned $60 million on the History tour. He donated a portion of that to charity.

He donated his 1.2 million dollar Superbowl earnings to charity.

He donated $5 million from Victory tour to charity.

He Did NOT donate the entire $70 million We are the World profits to charity. He paid (millions in) production costs out of the profits then donated a percentage of HIS royalties, which were shared with Quincy Jones and Lionel Richie.

His Heal the World foundation , which existed 4 years, donated and recruited donations to 39 childrens charities before it dissolved in administrative chaos. Michael insisted on being CEO but had no experience as a nonprofit foundation executive. The millions it had cost to set up the corp were wasted. Part of his Dangerous tour charity donations came back here.

He DID give millions to charity but his Guinness record is “giving to the most charities” (39) an unknown, unproven amount. That makes him a generous, philanthropic minded person who donated many millions, but the publicity of MJ personally donating $300 – $500 million to charity does not add up.

It’s a myth that the Chandler settlement cost him $23 million. His insurance company Lloyds of London paid the settlement.

He borrowed heavily against Neverland beginning in the nineties, partly to pay the expenses for living at Neverland.

After a second child molestation charge in 2003 and subsequent multimillion dollar trial he stopped paying many expenses including mortgage on Neverland. In 2005 MJ abandoned it, millions of dollars in contents, the zoo animals, the amusement park. His income that year according to Forbes magazine was $23 million.

He moved to Bahrain, bought a $1.2 million mansion, lived in it less than 10 months then abandoned it. He was sued by a member of the royal family for breach of contract. $5 million. More lawsuits began from unpaid employees, breach of contract suits, business partners, psychos and users.

In 2008 a Beverly Hills pharmacy, Mickey Fine, filed a complaint and lien against Jackson for not paying his prescription bills, a total of $101,926.66, dating back to 2005.

A $2.4 million settlement was made to a former maid who sued Michael for molesting her son. I’m NOT claiming he did it, I am stating he was sued and settled.

Michael had essentially lost Neverland, the paradise he had paid so much to build, by defaulting on payments.

Neverland was going into foreclosure by 2008 but that action was stopped by an agreement with an investment bank, Colony Capital. Colony was willing to take over the property, costs and payments while allowing Michael to keep a percentage of ownership. Michael had to sign over the deed to Neverland. Don’t feel too bad. If your house was in foreclosure no bank would offer that deal to you.

Colony Capital paid off the foreclosing bank for $23 million. Michael had bought Neverland in cash but had borrowed way over $23 million second mortgaging it. He defaulted on those second mortgages.

Michael then sold Colony Capitol another unknown percentage for $35 million more according to the Santa Barbara assessment office.

Colony would take 12% of the sale. Michael technically owned 87%. His continued percentage ownership dwindled as he had borrowed against his 87%. Significant amounts of money were to be repaid to Colony with 21% interest BY SELLING OFF NEVERLAND. The property was renamed Sycamore Valley Ranch, it’s original name.

MJ and Colony were betting on Neverland selling for over $100 million, making money for all. It has not sold and the price is reduced to $67 million.

Immediately after the Colony deal was struck and Neverland no longer in foreclosure, Jackson as a percentage owner would NOW not agree to sell but have it sit there abandoned and bleeding Colony Capitol’s money as a shrine to himself. The longer MJ let this go on, the less $ he was ever likely to see from Neverland. It was only listed for sale after his death. The Jackson Estate has a $1.00 interest share in the property at this point.

By 2005 Jackson was making MONTHLY payments of about $4.5 million on a debt of $270 million .