As Michael Jackson's team prepared to buy the ATV catalogue that had the Beatles songs, a team of 20 spent about 900 hours examining close to 1 million pages of contract. The catalogue had about 4000 songs and MJ paid $47.5m for it. Today, that investment is worth $1bn. 🤯🤯
MJ's team spent about $1 million on due diligence.
In addition to cash offer, MJ had to do a charity concert for the catalogue's owner, Holmes à Court.
For his troubles, the young lawyer that facilitated the deal got 5% cut of the catalogue's future earnings and MJ gifted him a brand new Rolls Royce Corniche convertible.
The catalogue contained background music library like a door closing, etc. This was usually licensed to ad agencies. The entire lib was flipped for $6m. Lowering MJs purchase price to about $41.5m.
For the “Smooth Criminal” performance, MJ and his costume designer, Michael Bush designed the shoe that will allow the king of pop perform his gravity-defying 45 degree lean. MJ later filed and got the patent for the shoe and shares credit with Bush.
By the end of 1987, MJ had earned $250m and won 11 Grammys all before the age of 30.
The ATV catalogue gave MJ some leverage. Sony came calling and both entities formed a 50-50 JV called Sony/ATV. Sony paid the pop star $115m plus a guaranteed $10m annually as part of the deal. MJ has made multiples of the catalogue’s purchase price of $47.5m.
Before his death in ‘09, MJ and his team made some ground breaking moves, scoring so many firsts as they went along. His Thriller album is still considered the bestselling album of all time; 100m units sold.
His $5.2m 1983 deal with Pepsi, $10m in 1987 and $15 in 1990. His Bad tour did a record $125m in tickets sales with about 4.4m people in attendance. Adjusted for inflation, that price would have been about $600m today if the tickets sold for $130 a piece.
Michael partnered with LA Gear and launched a sneaker line. He got an initial guarantee than what his namesake Michael Jordan got for his Nike deal.
His Neverland Ranch purchased at $17.5m in 1988 has soared in value. Some real estate veteran say it could fetch between $75m - $100m in the open market.
After his death, Sony dropped $60m for his “This Is It.” A film based on concert series rehearsal he was billed to perform before his death.
All in all, Micheal’s estate has earned about $700m in the five years since his death.
Michael has earned roughly $1.1bn in his career. He may be gone, but his legacies will endure for a long time.
This is one book I will recommend to anyone who is or trying to break into the music industry.
Michael Jackson, Inc: The Rise, Fall, And Rebirth of a Billion-Dollar Empire.
Michael Jackson, Inc: The Rise, Fall, And Rebirth of a Billion-Dollar Empire.
