Posted by By James “Bird” Guess - Dallas South News Contributor
Who knew Michael Jackson was one of the wealthiest Black Americans? According to TheBlackEconomy.com Wealthiest Black’s List, he was nowhere to be found. After so much attention on his legal battles, real estate foreclosure, and relentless debt negotiations it appears the King of Pop was asset rich, but cash poor.
Less than a week after Michael’s death, the Associated Press claimed his estate showed a net worth of $235 million, but less than $700,000 in cash. Although $700,000 in cash may be considered light years away from being cash poor, it depends on the cost of one’s lifestyle. The King was indeed living up to this name, leasing a $100,000 a month Bel-Air mansion in West Los Angeles, so he could be close to all the entertainment action.
The home Jackson was leasing was a French chateau estate built in 2002 with seven bedrooms, thirteen bathrooms, twelve fireplaces and a theater. Truly sounding like it was fit for a King, but with only $700,000 in cash and slow cash flow from royalties, Mike could have been considered living paycheck-to-paycheck.
To fully understand how the money issues began for arguably the greatest entertainer in history, let us take a look back at the King of Pop’s financial life. Jackson began earning money as a child pop star with the Jackson 5, but artist royalties at Motown were known to be “crumbs.” Actually the Jacksons did not begin to make “real money” until they signed with CBS Records in 1975, an agreement that guaranteed a fee of at least $350,00 per album. However, after Michael went solo and recorded the Thriller album, which according to the New York Times he received $125 million (pre-expense), his wealth began to skyrocket.
In 1985, Michael made the best investment move of his life, he purchased a 50 percent stake in the Sony/ATV music catalogue for roughly $50 million. The catalogue is currently comprised of approximately 750,000 songs including The Beatles, Bob Dylan, Neil Diamond, Lady Gaga, the Jonas Brothers and Michael’s master recordings. The catalogue’s estimated worth is roughly $2 billion.
In 1988, as his music career catapulted and he continued to stack cash, he purchased a $17 million property near Santa Ynez, California, known to the world as Neverland Ranch. However, in the 90’s Michael began to encounter a “cash flow crunch.” After the album Dangerous was released in 1991, he stopped recording on a regular basis and settled a child molestation lawsuit for reportedly $20 million. Then followed reports Michael blew $6 million in one store, spent $8 million annually on travel, and at one point lost $50 million on high risk investments.
People knew Michael was in financial trouble when he sold a stake of his interest in the ATV music catalogue to Sony for $100 million. By the late 90’s Michael received several multi-million dollar loans, including a $200 million loan from Bank of America pledging his interest in the Sony/ATV catalogue as collateral. Drowning in debt, Michael renegotiated the terms of his loans with the bittersweet help of Sony, who secured a right to purchase half of Michael’s stake in the ATV catalogue for a mere $250 million.
Currently Michael’s estate is estimated to have a net worth over $500 million. The bulk of his assets come from the estimated $1 billion ATV catalogue, which will continue to increase in value since the death of the pop icon has resulted in two million album sales in just the first two weeks following his death. The estate administrators are also preparing to auction off more than 150 unreleased songs recorded and stored away before his death.
Michael was the “King” and lived like a king, but his financial woes demonstrate no matter how “rich” an individual appears on the outside (clothing, cars, houses etc.) until you look examine their financial statements. Actually they could be living a financial fairy tale in Neverland. Despite his financial issues, Michael has and always will be an inspiration for achieving greatness.
RIP Mike, only God can judge you!
James “Bird” Guess is a motivational/empowerment speaker & the founder of The $chool of Money & Wealth. He can be reached at james@schoolofmoneyandwealth.com.
Edited by R. Ferguson
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