Keller Williams Realty is offering to pay for instruction and materials for anyone to become a real estate agent starting on July 6. The idea came from the amount of
How did Michael Jackson die poor with so much debt?
The easy answer is that he spent more than he earned. What he spent it on and how much he spent tells you about the man, some of his motivations and desires.
(Michael Jackson portrait by artist Guy Peellaert for the book Rock Dreams.)
He made a total of $175 million on Thriller. At the height of his fame in 1988, he earned $125 million. 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 $55 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, commissioned portraits, arcade games and grandiose clutter.
He was never poor . He died asset rich with debt and cash flow problems, but not poor. His family was considered working class in Gary, In. Michael was living in Hollywood and receiving $25,000 a month royalty checks by age 10.
Michael had several estates besides Neverland, the Jackson family compound Hayvenhurst worth $4.2 million, a luxury condo in a gated millionaire enclave in CA, a three story condo in Encino CA, a mansion in Hollywood Hills, CA.
He had an extensive art collection insured for $600 million, and antiques collections.
In 1990 Michael signed a $50 million contract with Sony.
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 possessions fill 9 warehouses in Los Angeles and it cost $1,485,000.00 a year to store 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 suites for $9,000. -$17,000. per suite per night. To put that in perspective that’s a $63,000- $119,000 per week hotel bill.
Michael actually held the record for highest rent paid in NYC after he rented an upper east side townhouse for $75,000. a month while working on The Wiz. This is in the late 1970’s when the average rent was $105.00 a month.
Between 1998–2000 Michael borrowed $200 million from Bank Of America to cover lifestyle expenses. He used his Sony/ATV ( Beatles) catalog as collateral.
Michael borrowed $25 million at high interest for living expenses, using his own company MiJac as collateral . The interest totaled $67 million.
(Inside Michael’s favorite limo, a 24k gold clad 1999 Rolls Royce Silver Seraph.)
Michael was a profligate spender. Example: he bought 3 bottles of a perfume called Gianni Vive Sulman Parfum VI at a cost of $89,000.00 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, a $2 million Vacheron King kulla diamond watch.
He had 75 cars registered in his name. He commissioned a $1 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, bar, video game consoles. In 2001 when he was living on loans he bought a $98,000 Bentley Arnage.
He earned $125 million on the Bad tour. After tour expenses and taxes etc , his profit / income was $40 million. Pepsi paid $15 million worth of tour expenses.
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 Neverland ( excluding other residences, dependents and non essential personal expenses) the time averaged an astonishing $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.
$85,500 monthly transportation.
$475,300 monthly costs for MJJ productions, Optimum productions.
(Gold sequined duvet costing $50,000. Sits beneath a $500,000 commissioned portrait of Michael in the last supper with Elvis, Walt Disney, Abe Lincoln, Albert Einstein, Thomas Edison as apostles.)
Michael paid $63 million to make the short film Ghost.
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 from his father for $2 million after Joe purchased it in 1971. Michael had it bulldozed to the ground and an even BIGGER mansion completely rebuilt to his taste as the new Jackson family compound, with a Snow White Diorama, candy store, ponds, swimming pool, water park, statuary, fountains, recording studio, mini zoo. The SECOND mortgage went into arrears around 2006
(Jackson family home, Encino, CA.)
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, 470,000.
He paid Disneyland Paris $2 million per day to close down so he could have it to himself.
You get the idea right?
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. Besides the usual tour expenses an artist is responsible 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.
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.
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 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 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 spent $700,000 on 4 Sworovski dining room chairs. 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.
(Private Chapel in Vegas home.)
Michael earned $16 million making Captain Eo. He spent it on a Rolls Royce, Mercedes Benz, hotel suites, toys.
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 50% share of EMI MUSIC publishing catalog. His cost is unknown however his estate just sold it to SONY for $358 million. Some of the catalog songs were Michael’s own.
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 $27,000 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.
The tour production company sued him for breach of contract (because he did not finish the Dangerous tour). Undisclosed multimillions. After paying his usual zillions in tour and personal expenses, lawyers, settlement, taxes, and his own salary, he donated the remaining to charity.
Interestingly, it went to his own charity organization Heal The World. Michael technically “donated tour profits to charity” according to his management . He then sold the broadcast rights to his Dangerous tour to HBO for $24 million recouping his donation to Heal The World
Michael grossed $60 million on the History tour, before taxes, expenses, salaries and AGAIN technically “donated tour profits” . It was incorrectly broadcast by media as the entire $60 million. But why correct that mistake if it makes you look Good ?
He donated his $1.2 million Superbowl earnings to charity then sold the superbowl performance footage to a Network media company , recouping some of the donation.
He donated $5 million from the Victory tour to charity. Each of the brothers,including Michael, earned $6 million apiece for the tour.
Michael donated a settlement from Pepsi for $1.5 million to a Los Angeles hospital.
He Did NOT donate the entire $70 million We are the World profits to charity. He paid (millions in) production costs out of the anticipated profits, then donated a percentage of HIS royalties, which were shared with Quincy Jones and Lionel Richie.
His Heal the World foundation, which existed for 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 and run the corp were wasted.
He DID give millions to charity but his Guinness record is “giving to the most charities” (39) . That makes him a generous, philanthropic-minded person who donated millions, but the myth of MJ personally donating $300 – $500 million of his own money 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.
(Michael in his closet with lots of stuff.)
After a second child molestation charge in 2003 and subsequent multimillion dollar trial, that was one of the costliest trials in California history, he stopped paying many expenses including 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 Bahrain 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 pharmacist, Mickey Fine, filed a lien against Jackson for not paying his prescription bills, a total of $101,926.66 .
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.
Obviously by the late nineties, early 2000’s the downward spiral was picking up speed.
(A few of the antiques and commissioned portraits from Neverland.)
Neverland was going into foreclosure by April 2008, but that action was stopped by an agreement with an investment bank, Colony Capital. Colony was willing to take over the costs, while allowing Michael to keep 87% 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 over $23 million second mortgaging it. He defaulted on those second mortgages.
Michael THEN sold Colony Capitol another unknown percentage for $35 million according to the Santa Barbara County assessment office.
His continued ownership dwindled as he had borrowed against his 87%. The property was renamed Sycamore Valley Ranch, its original name.
MJ and Colony were betting on Neverland selling for over $100 million, making money for all. It did not. The price was reduced to $67 million, then to $31 million.
Immediately after the Colony deal was struck and Neverland was no longer in foreclosure, Jackson as a percentage owner would not agree to sell but have it sit there abandoned and bleeding money as a shrine to himself. It was only listed for sale after his death.
By 2005, Jackson had his monthly living expenses to pay PLUS was he making MONTHLY payments of about $4.5 million on a debt of $270 million .
Lets talk about Michael’s spending style despite that $270 million debt. In the 2005 child molestation trial, Michael wore a different handmade suit every day to keep his spirits up and encourage fans. Each hand-crafted suit by Michael Bush cost an average $10,000 – $17,000 per suit, plus an (undisclosed) salary, for working round the clock. The trial lasted 14 weeks which is approximately $750,000 – $ 875,000 worth of suits.
It was spare change compared to the millions in lawyer fees, security, media damage control experts, medical needs, and transportation. Use your imagination, do the math.
(Michael had a collection of jeweled crowns, jeweled military medallions, thrones, insignia)
Michael paid for his 30th anniversary concert at Madison Square Garden in NYC. Ticket prices for “chair” seats were $5,000-$10,000 and the remaining venue seats sold out for two nights. Michael paid (millions in) production costs with advances against ticket sales. There was $275,000 for personal security, $1 million payment for Marlon Brando to appear , a $250,000 necklace as payment to Elizabeth Taylor, he paid his brothers to perform, unknown millions to Britney Spears, producer David Gest, other performers and ” gifts” to friends and guests. Madison Square Garden always takes a percentage.
Michael was in a very active phase of his Demerol addiction at the time, and it showed. He “overslept “ in his $12,000-a-night Plaza Ritz penthouse suite and was 2 hours late to his opening. He earned $15 million for the 2 concerts but most was spent before he hit the stage.
(MJ and Taylor on the red carpet for 30th anniversary concert, high on Demerol, fly open and no one says anything. Wow, what great friends!)
He bought Elizabeth Taylor a $362,000 diamond-encrusted Vacheron watch , $320,000 diamond ballerina ring, $600,000 necklace as a thank you for rebutting the Martin Bashir documentary, $194,000 diamond bracelet, Van Cleef & Arpels $87,000 diamond heart, $200,000 Massoni “monkey” necklace and earring suite, along with MILLIONS more in jewelry during their friendship.
Michael paid $1.5 million to host her last wedding at Neverland. That’s a lot of wedding cake.
(One of many gifts to Elizabeth Taylor, 22 ct diamond, sapphire, platinum ring. $700,000.)
Michael liked to shop. He filled his world with stuff.
There is the infamous scene in the Martin Bashir documentary, Living with Michael Jackson, where Michael spends over a half million dollars purchasing the ugliest antiques ever in a Las Vegas mall, in 10 minutes. This was not a performance for the film, this was a very frequent feature of Michael’s life and representative of his spending, which was unflagging until the end.
Jackson’s yearly expenditures remained triple the income, no matter how many millions a year that income was.
He had spent the $1.2 BILLION he earned in his adult solo career.
(Michael’s last estate on N. Carolwood Dr. in Holmby Hills, CA when he was considered “penniless” and “ forced “ into a deal with AEG to perform 50 shows. Rent, $100,000 a month )
When he negotiated with AEG LIVE to do a series of 50 concerts, it’s true the schedule was unreasonable, but AEG expected him to work hard for his projected multimillions, even if he was 50 years old. AEG had already spent about $40 million on production, Michael’s expenses and cash advances to Michael.
Michael was desperate for the money that HE BELIEVED 50 shows, a projected world tour, product endorsements, merchandise, would generate. Initial ticket sales totaled $85 million. He was now $500 million in debt.
Most associated with “This Is It” believed he might be able to do two weeks of shows but the rest would never happen. By then Michael had well-known drug problems, was mentally and physically unstable, and had not been onstage in almost in 10 years.
He had been asked to leave at least 4 luxury hotels that year when his credit cards were declined (according to body guards).
UNBELIEVABLY, Michael had begun spending his anticipated “This Is It” earnings, ADVANCED TO HIM BY AEG, even as he struggled in rehearsals, was being administered propofol and benzodiazepines at night, and was seeing Dr. Arnold Klein again for a cocktail of opioids, benzos, and cosmetic work.
Around the time of his death Michael was paying, with money advanced by AEG, Dr Conrad Murray a salary of $150,000 a month and $40K a month to Dr Arnold Klein for Botox, Demerol, Restylene and Midazolam (a surgical sedation benzodiazepine).
He was also paying $180,000 a month on security and transportation. $100,000 a month rent on his Carolwood Drive mansion, while preparing to move to a rented English castle outside London.
(Above, Michael’s future home, a castle outside London.)
The excess continued for upcoming London despite the debt and money being advanced from AEG (thereby accruing even more debt).
Items later auctioned off at Julien’s Auctions reflect a particularly sad shopping spree at this time . A Cadillac Escalade van, a $400,000 gold desk, $700,000 red velvet couch etc., etc., etc….etc….
The continued grandiose excess is mind boggling considering the stress it had caused him and his children.
(Part of spending spree for London home. Ebony and gold antique desk.)
It has been estimated by those who knew him that this trend of living a life far exceeding income would have continued had he lived.
On his trajectory of spending profits taken as advances and loans while not cutting his lifestyle costs, he would have found himself financially back at square one after “This Is It.”
For this reason, it is speculated Jackson had no true intention of completing his tour obligations despite rehearsing. He was in poor health and of questionably sound mind. He was getting old. His financial investments and tangible assets could have afforded him a comfortable life away from his debts, performing, prying eyes, the chaos his life had become, and the despoilment of his legacy.
Michael Jackson’s $1.1 million private family funeral costs was paid by Jackson’s estate and a $50,000 loan from Janet Jackson.
A few of the expenses were:
($35,000 burial outfit custom made of pearls and beads by Thompkins and Bush.)
$15,000 Tompkins and Bush design fee.
$590,000 Internment at forest Lawn Mausoleum.
Endowment care at forest lawn $88,500.
Promethius gold-plated casket $25,000.
Invites and programs $11,760.
Clothing for Jackson children $15,000
Post funeral private family reception :
•bar tab $10,800
•tray food $4,200
And saddest of all, framed photo of Michael – $4,300.
RIP Michael. We miss you.
Katherine Jackson v AEG LIVE court transcripts, financial disclosures, medical records.
Conrad Murray murder trial,court transcripts.
Forbes Magazine, Michael Jackson yearly career earnings 1979-2009.
Michael Jackson Inc, book, Zack O’Malley Greenburg, Simon and Schuster publishing.
Rolling Stone magazine, monetization of music.
Julians Auctions, catalogs, Michael Jackson home contents, memorabilia with known original purchase prices.
Public records. Financial disclosure statement filed with LA COUNTY superior court, Jackson v Rowe.
Public records. Sycamore Valley ranch sale William Bone to Jackson.
Interviews: John Braca, Jackson lawyer, Frank DeLeo, Jackson manager.
Sony/Atv music publisher, “Beatles” catalogue aquisition, sale, income.
Interview: Elizabeth Taylor discussing Jackson jewelry gifts and Christies Elizabeth Taylor jewelry auction with original purchase prices and designers.
NY Times real estate, sale of Michael Jackson’s former townhouse.