Wealth behind the Neverland fantasy

MICHAEL JACKSON’S tendency to indulge his wildest fantasies put his finances under serious strain.

As the undisputed King of Pop, and probably the most famous man in the world in the late 1980s and early 1990s, he amassed a fortune thanks to the huge success of his records and commercial tie-ups with the likes of Pepsi.

But despite being the singer behind the biggest-selling album of all time, the 1982 hit Thriller which sold more than 100 million copies around the globe, Jackson’s spending habits caused him serious problems.

Jackson’s wealth allowed him to indulge his wildest fantasies, and while some, notably the acquisition of the rights to many of the Beatles’ songs, could be seen as shrewd investments, others, such as his “companion” called Bubbles – a chimpanzee – smacked of a man completely detached from reality.

After Jackson was cleared of child abuse charges by a court in 2005, his finances apparently unravelled and in November last year he was forced to give up the title to his Neverland ranch in California after defaulting on €18 million he owed on the property.

The warning signs were there as far back as the late 1990s, when he began to take out huge loans to support himself and pay debts. In 1998, he took out a loan for €100m from Bank of America, which two years later was increased to €140m. Further loans of hundreds of millions followed.

The collateral for the loans was Jackson’s 50% share in Sony/ATV Music Publishing, a portfolio of thousands of songs, including rights to 259 songs by John Lennon and Paul McCartney, considered some of the most valuable properties in music.

In 1985, Jackson paid €33.5m for ATV, which included the Beatles songs – a move that estranged him from McCartney, who had advised him to invest in music rights – and 10 years later, Jackson sold 50% of his interest to Sony for €64m, creating a joint venture, Sony/ATV. Estimates of the catalogue’s value exceed €750m.

Last year, Neverland narrowly escaped foreclosure after Jackson defaulted on €17.4m he owed on the property. He had faced repossession earlier last year before a company called Colony Capital bailed him out by buying his loan.

In April this year, a scheduled auction of the singer’s possessions, including his famous glittery glove which inspired countless copycats, was called off after Jackson and Julien’s Auction House reached a settlement to their dispute over whether 2,000 items from Neverland Ranch were ever intended for sale.

And last November, Jackson reached an out-of-court settlement with an Arab sheikh who was suing him for €5.5m.

The star was invited with his children and entourage to Bahrain by Sheikh Abdulla bin Hamad Al Khalifa, the son of Bahrain’s king, shortly after Jackson was acquitted of child molestation charges in California.

While there, the sheikh lavished money on Jackson and built a recording studio, which he believed would be used to record albums by the King of Pop using material the sheikh had helped to write. But Jackson pulled out of the deal in May 2006 after 11 months and did not see the sheikh again.

Aside from several multimillion-dollar out-of-court settlements with the families of boys who claimed to have been abused by the singer, Jackson’s shopping sprees also ran up significant bills.

In a now-famous documentary made by British journalist Martin Bashir in 2003, Jackson was shown going on a €4.2m shopping spree, buying outlandish items such as an oversized glass chess set and a 10ft urn.

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