Judge Approves Pay Bump for Jackson Estate Execs

[ivy]

@legacylegacy7

I care what Randy Phillips says under the threat of fraud and perjury and it is $1.4 Million per show.

Furthermore I can multiply 20,000 seat capacity with an average price of 75 and see it equals to 1.5 million. Almost the same amount mentioned in the court documents.

Also I have enough brain to realize that $800 to $5,000 ticket prices of 2001 anniversary shows are a lot than the TII ticket prices. Therefore Michael never could have got $7 Million per night from TII shows.

I also live in reality land where AEG also gets a share of the profits, and all the musician, dancers and staff gets paid.


You continue to live in a imaginary land where you can only show a Times article - that no longer exists btw- for $80M for 10 shows and cannot even support it mathematically.

 

[legacylegacy7]

3 months before he died Michael sold out 50 shows in London proving that he was still the biggest star in the world. Nobody will even come close to that. In 2008 he released thriller 25. A twenty five year old Michael Jackson album sold on par with brand new releases from much younger artist.

He did not have die to be the most famous artist in the world. He always was. He did not have to die to sign the biggest contracts and generate more money than everbody else. He always did.

 

[Bonnie Blue]

So, The Estate of Michael Jackson owns 50% shares of Sony/ATV LLC, not a 50% partner. I always thought Sony/ATV is a partnership, not LLC.
Big difference between partnership and LLC. Debts assumed by the partnership are partners' liabilities.

Since Sony/ATV is privately held company, it doesn't need to disclose its finanical information to the public. Complete financial info is not readily available. So, does anyone know whether the expansion of Sony/ATV in the past was financed through leverage or additional capitals from shareholders? When a company increases its investments, it can increase both assets and liabilities. Or, increase asets and shareholders' equity. If the expansion is financed by additional capital, then Michael might have borrowed money to put in more capital in Sony/ATV. Or else, his shares might have been diluted once the company got bigger.

I don't know much about mj's business dealings, too complicated for me - but wiki-ed sony-atv and they say it's a LLC not a partnership. The shares seem to be at 50:50, with each side having power of veto. Not sure if that helps.

^^Legacy - you're preaching to the converted here, we're all in agreement that mj could generate amazing amounts of money when alive, not just on death.

 

[legacylegacy7]

You continue to live in a imaginary land where you can only show a Times article - that no longer exists btw- for $80M for 10 shows and cannot even support it mathematically.

Where?

 

[KingMikeJ]

3 months before he died Michael sold out 50 shows in London proving that he was still the biggest star in the world. Nobody will even come close to that. In 2008 he released thriller 25. A twenty five year old Michael Jackson album sold on par with brand new releases from much younger artist.

He did not have die to be the most famous artist in the world. He always was. He did not have to die to sign the biggest contracts and generate more money than everbody else. He always did.

You're on a Michael Jackson forum, no one here is denying what you just said. Although the fact is, whether we like it or not, Michael's death reignited public interest in his life and career.

 

[Ben]

You're on a Michael Jackson forum, no one here is denying what you just said. Although the fact is, whether we like it or not, Michael's death reignited public interest in his life and career.

Yes, but I wonder for how long. Lets be realistic : apart from us, in a few years, who will buy his postumous albums or merch? Maybe I'm too pessimistic, but I dont see it last.

 

[ivy]

You're on a Michael Jackson forum, no one here is denying what you just said. Although the fact is, whether we like it or not, Michael's death reignited public interest in his life and career.

Absolutely. No one denied Michael's fame, no one denied his ability to earn money, $2M a night is huge, 50 sell out shows are huge. ability to turn it into $500 over a period of years is huge. and it's all Michael.

It was just about his unrealistic estimate of $80M from 10 concerts. But when a person can't grasp I guess they simply can't.

Yes, but I wonder for how long. Lets be realistic : apart from us, in a few years, who will buy his postumous albums or merch? Maybe I'm too pessimistic, but I dont see it last.

I'm sure he'll be okay. Look to Elvis. The income levels can drop but I'm pretty sure Michael's estate will generate income for decades to come.

 

[bluesky]

Yes, but I wonder for how long. Lets be realistic : apart from us, in a few years, who will buy his postumous albums or merch? Maybe I'm too pessimistic, but I dont see it last.

I would say that will depending on the estate - produce excited products (music, games, dvds) , events that the public like to buy or attend

- depending on the MJ community - keep growing and maintain the membership, interests

 

[legacylegacy7]

With all do respect. Tell us one Estate project that would not have been bigger if Michael was here to promote it. This is just unfair to him. At what point was he not the most famous sought after celebrity in the world.

 

[legacylegacy7]

You continue to live in a imaginary land where you can only show a Times article - that no longer exists btw- for $80M for 10 shows and cannot even support it mathematically.

Where?

 

[love is magical]

I don't know much about mj's business dealings, too complicated for me - but wiki-ed sony-atv and they say it's a LLC not a partnership. The shares seem to be at 50:50, with each side having power of veto. Not sure if that helps.

^^Legacy - you're preaching to the converted here, we're all in agreement that mj could generate amazing amounts of money when alive, not just on death.

Thanks Bonnie. Yes, Sony/ATV is a LLC. I went to their website and checked it out.

I was confused becasue Sony/ATV is always referred to as a partnership between Sony and Michael.

My point is that Michael's debts could be related to his investments in Sony/ATV despite the fact that Sony/ATV is a LLC. A company generally can raise capital by issuing debt (increase liablility) and/or issuing more shares (increase equity). So, when Sony/ATV decided to make an investment, it can either borrow money or ask shareholders to chip in. If Sony/ATV decided to go by the second route, Michael had to put more money into Sony/ATV in order to maintain his 50% ownership. And how Michael financed such investments? If he had millions dollars of cash in the bank account, he could pay from his short-term asset. Or, he could liquidate other investments to fund his investments in Sony/ATV. Or, he could borrow money in order to make such investments.

Again, without seeing how Sony/ATV structured it's various business deals. The above are just my guess.

Yes, but I wonder for how long. Lets be realistic : apart from us, in a few years, who will buy his postumous albums or merch? Maybe I'm too pessimistic, but I dont see it last.

How about our children and the children of our children?

With a legacy like Michael Jackson's, people will always have interest because his music is forever young. Posthumous albums are icing to the cakes. In my humble opinion, the merchandize that continues to attract people will always be his legacy catalouge.

 

[soulmum]

I firmly believe that Michael will surpass even Elvis for maintaining the legacy. We see new fans every day because there is so much out there for them to hear and learn about. The estate are doing a good job in keeping that legacy alive as are the fans. Michael will be as relevant in the next century as in this.

 

[Graf]

Yes, but I wonder for how long. Lets be realistic : apart from us, in a few years, who will buy his postumous albums or merch? Maybe I'm too pessimistic, but I dont see it last.

Michael's the greatest artist of all time, people will eternally be interested in him and his music.

From a $$ perspective when Michael was here he had unlimited potential to earn however much he wanted and even though he's not here anymore that potential is still there to an extent..It all depends on how effective and how much effort the executors/sony/promotion ect. put into everything.

 

[legacylegacy7]

Michael's the greatest artist of all time, people will eternally be interested in him and his music.

From a $$ perspective when Michael was here he had unlimited potential to earn however much he wanted and even though he's not here anymore that potential is still there to an extent..It all depends on how effective and how much effort the executors/sony/promotion ect. put into everything.

That is it exactly! When the most talented and famous man in the world was here he could have done anything he wanted. He would always negotiate the most money because Michael Jackson was always guaranteed to bring the most attention and excitement. For example if he chose to do a prime time interview he would generate the highest ratings because that's just who he was.

With him being gone the love and interest in him is still there but projects can only be promoted in a certain way.

 

[Memefan]

Thanks Bonnie. Yes, Sony/ATV is a LLC. I went to their website and checked it out.

I was confused becasue Sony/ATV is always referred to as a partnership between Sony and Michael.

My point is that Michael's debts could be related to his investments in Sony/ATV despite the fact that Sony/ATV is a LLC. A company generally can raise capital by issuing debt (increase liablility) and/or issuing more shares (increase equity). So, when Sony/ATV decided to make an investment, it can either borrow money or ask shareholders to chip in. If Sony/ATV decided to go by the second route, Michael had to put more money into Sony/ATV in order to maintain his 50% ownership. And how Michael financed such investments? If he had millions dollars of cash in the bank account, he could pay from his short-term asset. Or, he could liquidate other investments to fund his investments in Sony/ATV. Or, he could borrow money in order to make such investments.

Again, without seeing how Sony/ATV structured it's various business deals. The above are just my guess.



How about our children and the children of our children?

With a legacy like Michael Jackson's, people will always have interest because his music is forever young. Posthumous albums are icing to the cakes. In my humble opinion, the merchandize that continues to attract people will always be his legacy catalouge.

True. But from everything we know, this is doesn't seem to have been the case here. Aside from Branca getting a 5% years ago (before re-selling it to MJ), the equity hasn't changed much.

Such changes in the equity would have been communicated to Sony's shareholders. Sony is publicly traded and is the parent company of 50% of Sony/ATV

 

[love is magical]

True. But from everything we know, this is doesn't seem to have been the case here. Aside from Branca getting a 5% years ago (before re-selling it to MJ), the equity hasn't changed much.

Such changes in the equity would have been communicated to Sony's shareholders. Sony is publicly traded and is the parent company of 50% of Sony/ATV

Great point! Sony's annual report could be a source of info. I remember reading Sony's 2010 annual report, but couldn't really find much about Sony/ATV. 50% ownership of Sony/ATV still represents just a very small fraction of the entire Sony Corporation (consumer electronics, games, movies, music), so it can be immaterial to be disclosed. I'm not sure.

Actually, I'm curious to read Sony's March 31, 2012 report. The fiscal year ended March 31, 2012 is an interesting year because of the aftermath of the tsunami in Japan.

 

[Mirabella76]

It's interesting debates
But i'm agree with opinion MJ would be able to raise such amount of money by himself. Branca and MCclain are doing a great job and i'm always glad to hear a good news from Estate but that's what they have to do haven't they?
Michael was planning a successful tour, 10 singles during the tour (correct me if i'm wrong) than an album, 3D music video, films and children's hospital. I think it was not just a dream it was his plan for the near future. If he was planning such a grand non-commercial deal he had to be sure he could manage it. Of course it was a plan for 3-4 years but i'm sure MJ was able to do it.
All his financial problems were redoubled because of Sony problems, sabotage of Invincible album, trial, and all his bad times in 2000th. But he planned a great comeback and everyone could see it was gonna be very successful. So i'm sure Michael would do his dealings just as well as his executors and maybe even better

 

[walkingonthemoon]

I think you didn't understand it. Got a little confused?

Executors was supposed to get 10% and they were also paying their firms from that 10%. In other words from his 5% share Branca was paying Ziffren's costs and from his 5% share McClain was paying his studio and production costs.

So the Executors were receiving 7% as their personal fees - rather than the 10% they are supposed to get. They asked the Judge to adjust this.

So Judge allowed Ziffren's costs to be billed separately - 3%. McClain will be able to bill studio and production costs separately as well. (No percentage given for it).

So currently it's 5% for Branca, 5% for McClain, 3% for Ziffren firm and any future studio/production costs. If we assume the studio/ production costs are another 2-3 % it would bring it to 15-16% total. It's still a lot lower than the normal 20-30% if multiple parties, companies, managers etc were involved. For example if I'm not mistaken Raymone Bain herself alone was taking 15% when Michael was alive.

ATV revenues were never included, nor TII nor MIJAC. They only take percentage from what they bring in. Not from the assets Michael already had (ATV, MIJAC) and bring money on their own (with no action from Executors).

ATV/Mijac/TII revenues ARE included, although not completely. If you carefully read the petition re what Branca/McClain asked for (and recieved) http://www.radaronline.com/sites/default/files/Michael Jackson Probate 1-22z_0.pdf

What they asked for is 10% of total gross entertainment industry related income, minus:
- Mijac Sony/ATV receipts, to the extent designated for servicing the existing loans
- TII income to the extent applied to satisfy the debt owed to AEG
(- investment income not related to entertainment)

or in plain English: only the part of Mijac or Sony/ATV income that is spent on repaying the debt is excluded, all the rest of the income IS included, and likewise for TII. (the part spent on AEG debt excluded, all else included).

And if you look at the actual accounting presented by the estate, it seems that they did "recieve" (= pay to themselves since technically that is what happens) the full 10% that they are entitled to (including catalog income!). You can find the accounting (till October 2010) here: http://www.scribd.com/doc/68019500/Report-of-Status-of-Administrations-and-Petition-for-Settlement

gross income was $265 million (including Mijac/ATV income)
substract
debt payments for Mijac $5.7 million and for ATV $32.3 million ($38 million)
debt to AEG - I can't make this one out exactly, but it was reported at around $35-40 million
(and a bit more for other investment income)
and you're left with approx $180 million 10% of which is $18 million, which happens to be what was charged to the estate under
compensation to co-executive and creative director (executors) - just under $18 million

 

[ivy]

^^
If you look you won't see any payment for Ziffren's services or Marvin Gaye's studio expenses. Those came from that $18M that they are paying themselves hence reduced the 10% they are getting and the judge adjusted for it.

also schedule F shows Sony/ATV brought $17M but the debt paid on it is $34M. So they didn't receive any income from it, on the contrary they paid some of the debt from Estate's income. I think Sony/ATV is so heavily financed to bring income for some time.

and for the future reference can you give page numbers or write sections that you are talking about. I hate to spend time looking for what the other person is talking about.