Date: Feature Week of December 14, 2003
Topic: Black Press Business/Economic
Author: William Reed
Article ID: article_ema121403a

IS MICHAEL HURTING IN THE POCKETBOOK?

A Look At Finances Of �The King Of Pop�

Have you bought �Number Ones� yet?  Or, did you buy into majority community hype that �The King of Pop� is down for the count?

Michael Jackson needs your help at the record store.  One noted by Forbes as the �richest entertainer in the world� with a $750 million net worth, he is heavily in debt and counting on his latest compilation CD, "Number Ones,", to relaunch him as a $1 billion music legend.

In his last product for the Sony Music label, Epic Records, "Number Ones" features top hits from Jackson's 30-year solo career, selling over 121,000 copies its first week.  The recording came to the market at a time when CD sales across the board are problematic for major record companies.  A tracking firm recently forecast that retail sales of recorded music in 2003 will be down 8.9 percent from 2002.  Jackson's record sales have been steadily declining during the 10 years since he was last embroiled in a highly-publicized molestation scandal.

With lavish spending, and a 2,600-acre ranch and playground known as Neverland, Jackson is said to spend approximately $1.2 million a month -- including the cost of running the ranch ($240,000), limousine rentals ($195,000) and maintaining a personal staff of 120 (about $375,000).  Last year, he even racked up a $100,000 hotel bill in a brief visit to New York.  Earlier this year, Jackson tried to sell Neverland for $22.5 million but withdrew it from sale when estate agents said it would fetch only $13.5 million.  The star bought the ranch in 1988 for $28 million.

Jackson�s assets include Neverland, located in the hills above Santa Barbara, Calif., and homes in Southern California and Las Vegas.  Most of his assets are in Sony/ATV which includes musical holdings worth an estimated $450 million.  It includes 200 Beatles titles and songs recorded by Elvis Presley.  The Beatles hits alone earn him a steady $34 million a year.  Jackson bought ATV in 1985 for about $47.5 million and sold it to Sony for about $95 million in 1995, retaining a half interest.  His Sony/ATV stake helped him secure a $200 million loan in 2001 from Bank of America to fund living expenses and cost of producing the "Invincible" album.

Michael Jackson surely is in need of a hit and people to buy it.  If you notice, most radio station programmers give the recordings little play.  His first big comeback bid came two years ago with "Invincible," his first album of original music in six years.  It cost $30 million to produce but fell flat commercially, logging U.S. sales of just over 2 million copies.  Two million copies pale in comparison with the success of Jackson's 1982 mega hit "Thriller," the biggest-selling studio album of all time - certified domestic sales of 26 million copies and more than 40 million units worldwide.

The 1995 double-CD set "HIStory Past, Present and Future, Book 1," a collection of post-Motown hits and new songs, sold 366,000 copies in its first week and 2.5 million units total.  Jackson's 1991 studio release, "Dangerous," his last album before child sex-abuse allegations surfaced, sold nearly twice that in the U.S.

When the �Invincible� CD flopped Jackson couldn't repay the loan and blamed Sony for not giving the album enough marketing support.  Sony pushed for the "Number Ones" release to recoup some money from him.   All is not lost for Michael Jackson; �Number Ones� debuted at only 13th on U.S. charts but Number 1 in Britain and is selling well in Australia, Ireland and New Zealand.  Next spring, a Japanese clothing maker, the Wakita Co., is scheduled to roll out an "MJ" line of business suits that will sell for about $480.

People buying �Number Ones� will help the 45-year-old singer as he faces up to $240 million in debt and finds himself without a record contract for the first time since he was 10 years old.

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