Michael Jackson Concert Promoter Takes Big Financial Hit
The night before Michael Jackson died, the “King of Pop” rehearsed at the Staples Center in Los Angeles, California in preparation for his ironically named “This is It” comeback concerts in London next month. Staples is owned by concert promoter AEG (Anschutz Entertainment Group), which hoped to seal its role as the world’s preeminent concert promoter with Jackson’s sold-out concert series. Scheduled to open on July 13 in London, England, Jackson would have appeared in 50 concerts at AEG’s O2 Arena, through March 2010. It would have been the highest-grossing single concert engagement ever.
Billboard magazine estimated that Jackson’s London concerts would net AEG about $115 million once related merchandise sales were factored in, and a $450 million gross was anticipated from a three-year Michael Jackson global tour. Now, AEG has to refund $85 million worth of concert tickets…soon. The company also spent up to $30 million on concert production costs: The “This is It” shows were expected to be the most technologically advanced, expensive arena shows in history. The elaborate shows were to include almost two dozen sets, high-wire acts and light shows. And up to $10 million in advances is thought to have been paid to Jackson.
Ray Waddell of Billboard wrote that refunding the $85 million in ticket sales “will be messy, as well as expensive, and it will need to happen quickly by law.” Just to complicate matters, the tickets were bought by fans in many countries — from as far away as Botswana — and insurance reimbursement for AEG will depend on the singer’s cause of death and the level of insurance coverage bought by AEG.
Waddell said: “AEG’s yearly financial results may now depend on Jackson’s cause of death. One entertainment insurance industry insider says that if Jackson died from a drug overdose or a preexisting condition, the producer could be on the hook for any loss — which would include any money already sunk into the production, as well as the considerable cost of refunding consumers for the 750,000 tickets already purchased. If Jackson signed a contract saying he would return his advance in the event he didn’t perform, the company could end up in court with a long line of other Jackson creditors.”
AEG. the world’s second-largest concert promoter, is owned by Colorado billionaire Philip Anschutz. And maybe the fact that the owner is already a billionaire who can absorb the financial losses is the only good news in this complicated financial nightmare. Anschutz’ net worth is estimated at $7.8 billion, and he’s ranked by Forbes as the 31st richest person in the country.
Read more celebrity news about Michael Jackson’s death.
Photo credit: NBA and Reuters
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