Billboard Magazine, in a cover story on the late Michael Jackson, reveals that the late “King of Pop” has generated an estimated $1 billion in revenue since his death. In a concurrent development, the discovery of almost 300 musical tracks cut by the Jackson 5 has been announced by the man who bought a warehouse full of Jackson 5 materials.
The piece entitled “How Michael Jackson Made $1 Billion Since His Death” has been picked up by the press, which is erroneously reporting that The King of Pop’s estate received $1 billion in income from sales of Jackson’s music. The title of the article is misleading, as the article correctly states that Jackson’s music sales have generated revenues of $1 billion, a good chunk of which accrues to his record company and other middle-men in the music and entertainment industries.
Still, the actual income to the estate may be in excess of $400 million.
Music Sales
Around 33 million Michael Jackson albums have been sold worldwide since his death, including 9 million domestically, Billboard estimates. With an average retail price of $11.62, the albums generated $383 million in sales.
There were 12.9 million digital tracks of Jackson’s music downloaded domestically since his death. Based on these figures, Billboard believes that his entire digital download sales worldwide totalled approximately 26.5 million, generating $34 million in sales.
Approximately 1.5 million Michael Jackson ringtones were sold in the the US, with probably 3 million additional sales worldwide. Estimating the cost of a downloaded ringtone at $2 each, this medium generated $5 million in sales.
An additional $2 million came in from from digital performance royalties, and subscription services generated about $6.5 million in total.
Visual Media
Billbaord estimates the Jackson estate generated $392 million in revenues from visual media and software.
The concert film This is It, based on rehearsals for the tour that Michael Jackson was planning to launch before his death, grossed $72 million in North America and $188 million globally. Sony paid AEG, which was the concert promoter, $60 million for the footage. Billboard estimated that 90% of the income received in residuals from the concert film after AEG recovered the $35 million it invested in the venture went to Jackson’s estate. That number likely is high.
Other revenues include $43 million in DVD sales and $25 million in rentals for This is It, plus $7 million in Blue-Ray disc sales. Another $15 million came in from cable TV rights and well over $18 million from Sony Play Station sales.
Music Publishing/Licensing/New Contract
On album sales and movie box office returns, the Michael Jackson state gets just a percentage, probably not more than 15-20% and half that with other visual media. Music publishing, however, is a cash cow.
Mijac, Jackson’s music publishing company, was estimated to receive approximately $25 million annually in royalties from the King of Pop’s music before his death. Royalties in the year after his death likely were twice that, as Jackson’s music filled the air waves and sales of his music skyrocketed.
Michael Jackson also owned one-half of The Beatles music publishing, the most lucrative music rights in the history of music industry, via Sony/ATV. That company was created in 1995 after Sony nailed out the financially strapped Jackson by paying him $90 million for half of the Beatles catalog, which Jackson acquired when he bought ATV Music Publishing.
The catalog is worth about $1.6 billion, making the Jackson estate’s share worth $800 million. The estate likely receives $80 million annually from The Beatles.
Licensing of Michael Jackson merchandise and the revenues from a Cirque de Soleil show based on the King of Pop’s music, which will have a run in Las Vegas and road tours, will generate another $35 million.
The Actual Haul
The Michael Jackson estate in March 2010 signed a new eight-year contract with Sony to deliver 10 albums of The King of Pop’s music, culled from previously unreleased tracks and reissues. The total value of the deal to the estate is valued in the range of $200-250 million. Billboard estimates that an advance on the contract could have generated $31 million to the revenues to the estate in the year after Jackson’s death.
What were the actual revenues to the estate, after Michael Jackson’s death? Taking the estimated record sales of $383 million and assuming a 20% royalty rate on sales, that whacks about $300 million off of the total of $1 billion.
When it comes to This is It royalties, assuming that the Jackson estate got a liberal 20% of the net after exhibitors took there share of the domestic box office, which runs from 20% to 50% (the cut from foreign movie rights is much less), the estate probably received a maximum about $11.5 million domestically and about the same from the foreign markets.
If Jackson received the top royalty of 8% on DVD sales that only top megastars like Tom Cruise get, the estate got $4 million. Thus, of the revenues generated by Michael Jackson, when one considers the income culled from those revenues, another $275 million evaporates.
Still, with income in excess of $400 million, to quote Frank Sinatra’s greatest hits, “It Was a Very Good Year.”
Jackson 5
In related development, Howard Mann — A Canadian businessman who purchased a warehouse of belongings of the Joe and Katharine Jackson family, the parents of Michael Jackson and his brothers — announced that he has master recordings of 273 unreleased Jackson 5 tracks.
The music tracks include solos by Michael. The bulk of the tracks were cut for a 1975 TV show featuring the Jackson family.
Mann reportedly is in a business relationship with Katharine Jackson, Michael’s mother, who inherited the bulk of his estate and is his executor. Katherine also is the permanent guardian of his three children.
However, the lawyer for the Michael Jackson estate recently revealed that Katharine plans on suing Mann. Mann had acquired the contents of the warehouse during a bankruptcy auction.
Katharine and her then-husband Joe Jackson filed for bankruptcy in 1999, which led to the loss of their possessions to Mann. To exploit the items, he struck up a relationship with Katharine. So far, Mann has produced a coffee table book about the Jackson family, Never Can Say Goodbye: The Katherine Jackson Archives, which will go on sale at the end of June.
The potential revenues from the unreleased Jackson 5 tracks might prove too lucrative to let Mann have a large share. Mann has said he has struck a deal with Katharine Jackson to turn the unreleased Jackson 5 tracks into albums, but one of the Michael Jackson estate’s lawyer issued a press release stating that Mann has not been given any rights “to exploit any estate assets.” The estate plans to implement “whatever action is necessary to prevent him from unlawfully profiting.”
Katharine Jackson also is suing her ex-husband Joe, whom the King of Pop left out of his will. Joe, who had managed the Jackson 5, has blamed Katharine for his son’s death.
Michael Jackson’s father has been portrayed in the press as a tyrant who was deeply resented by his son. The King of Pop claimed publicly his father made him physically sick during a lonely childhood in which he and his brothers were physically abused by Joe. He ultimately forgave his father.
Sources:
Billboard Magazine, How Michael Jackson Made $1 Billion Since His Death
Sawf News, Michael Jackson’s estate to go after Katherine’s business partner
Showbusiness 411, Jackson Five Surprise! 273 New Tracks Discovered
TMZ.com, Jackson Estate Ready to Pounce on Profiteer
