Jackson, who died on June 25, left behind as much as $500 million in debts. That includes a $315 million loan owed to British bank Barclays, as well as millions of dollars in bills. “Jackson never paid his bills," says a lawyer who did work for Jackson over the years. “Countless professionals who worked for him are still waiting to get paid." In May, the singer's longtime publicist Raymone Bain sued Jackson for $44 million in unpaid fees.
But whether those debts will mean Jackson died bankrupt depends heavily on the worth of Sony/ATV. Jackson had other assets, including rights to many of his own songs, as well as about 1,000 hours of rehearsal footage leading up to this summer's London concert tour and possibly about 100 unreleased songs. But none of those assets are likely to be nearly as valuable as his stake in Sony/ATV, which has been valued at anywhere from $390 million to $1 billion.
Jackson's 1985 purchase of ATV Music, which included in its catalog some 250 Beatles tunes, for $47.5 million formed the basis of his stake in the music-publishing business and was by far his shrewdest music deal. Yoko Ono, John Lennon's widow, and Paul McCartney had considered bidding a combined $20 million for the collection, but Ono decided that was more than the collection was worth. Jackson's purchase price of more than double that is still far less than what the songs would sell for now.
In 1995, Jackson agreed to merge ATV with Sony's music-publishing business. The Japanese corporation paid Jackson $150 million to complete the deal and split ownership of the new company with the performer 50-50. In March 2007 an audit of Jackson's finances valued his half of Sony/ATV at $390 million.
But just two years later, it is likely that Jackson's stake in Sony/ATV is worth much more than that. First of all, music-publishing has not been hit nearly as hard as the rest of the music industry by the shift to music downloads and away from compact discs. Unlike a record label, a music publisher does not get paid only when an album or other original recording of a song is sold. Publishers retain the rights to a song and get paid every time it is performed or appears in a movie or advertisement by the original artist or any other performer. “I have talked to a number of music publishers who tell me last year was their best year in a while," says Susan Butler, a former music-industry lawyer who now writes the newsletter Music Confidential. “Guitar Hero and other games have created a lot of opportunity for the publishers."
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