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Jacko Must Make Beatles Sale
Thursday, April 14, 2005
By Roger Friedman
Jacko Must Make Beatles Sale
A deal to extricate Michael Jackson from his perilous financial situation is at hand.
I can tell you exclusively that the deal Jackson is being offered must be signed in the next few days, or he really will have his proverbial head on the chopping block.
I'm told Jackson will likely be presented with a deal sculpted by what I call his "permanent government" of lawyers and advisers, not the many shady characters who've come and gone over the years.
This "government" includes music publisher Charles Koppelman (who's also on the boards of Martha Stewart and Steve Madden's companies), attorneys John Branca and Al Malnik, Jane Heller of Bank of America and private investors represented by Goldman Sachs.
First, the deal: Sources say Jackson will be selling most of his 50 percent interest in Sony/ATV Music Publishing, aka the Beatles catalog.
In return, all his debts will be paid off, including $270 million in loans from Bank of America, all the debt piled up at his Neverland ranch and all loans against his own Mijac Music Publishing, which owns Jackson hits such as "Billie Jean" and "Beat It," as well as songs by Sly and the Family Stone and others.
Jackson will wind up with somewhere in the neighborhood of $10 million in cash, I am told.
He will retain ownership of all his tchotchkes, including the $2 million King Kalla diamond watch he bought from David Orgell jewelers.
He will still reap a $7 million to $8 million annual income as well. He'll also get some income from Sony/ATV.
Sources point out that Mijac is now worth around $100 million, and will be an even better asset once it's free from debt.
Jackson's immediate plan, if he accepts the deal, is to downsize his Neverland costs. This would mean eliminating the zoo and cutting back the carnival.
Ultimately, the wisest thing to do — should he be found not guilty by the jury in his child molestation trial — is sell the ranch and move to a more reasonably sized estate with lower maintenance costs.
Of course, the pending plan does not cover money he owes to ex-wife Debbie Rowe. Jackson ceased paying alimony to her last year, and is involved in a court fight over that and custody of the couple's two children.
One easy remedy to his financial woes, of course, would be to stop incurring overwhelming legal debts.
I'm also told that Jackson is once again without counsel for his business dealings. The reason? As has often been the case lately, Jackson did not pay the lawyer who represented him most recently, sources say.
I am told there is some urgency to Jackson signing this deal.
Bank of America has, according to sources, lost its patience over his mounting debt. If for some reason he doesn't accept this latest proposal, I am told that he will really be in a dire situation.
Jackson, mind you, is not likely to sign this deal. Insiders tell me that he's encouraged his fans to spread the word that he's the victim of a "conspiracy."
"Michael doesn't want people to think he lost the Beatles," says a longtime friend. "He wants his fans to think it was stolen from him. He has to be the victim."
My sources also say that Jackson considers Branca one of the "conspirators," since his former attorney would reap a 5 percent commission on this sale — almost three times as much money as Jackson will make.
But push has come to shove, to use a cliché, and Jackson is unlikely to find a better deal.
Thursday, April 14, 2005
By Roger Friedman
Jacko Must Make Beatles Sale
A deal to extricate Michael Jackson from his perilous financial situation is at hand.
I can tell you exclusively that the deal Jackson is being offered must be signed in the next few days, or he really will have his proverbial head on the chopping block.
I'm told Jackson will likely be presented with a deal sculpted by what I call his "permanent government" of lawyers and advisers, not the many shady characters who've come and gone over the years.
This "government" includes music publisher Charles Koppelman (who's also on the boards of Martha Stewart and Steve Madden's companies), attorneys John Branca and Al Malnik, Jane Heller of Bank of America and private investors represented by Goldman Sachs.
First, the deal: Sources say Jackson will be selling most of his 50 percent interest in Sony/ATV Music Publishing, aka the Beatles catalog.
In return, all his debts will be paid off, including $270 million in loans from Bank of America, all the debt piled up at his Neverland ranch and all loans against his own Mijac Music Publishing, which owns Jackson hits such as "Billie Jean" and "Beat It," as well as songs by Sly and the Family Stone and others.
Jackson will wind up with somewhere in the neighborhood of $10 million in cash, I am told.
He will retain ownership of all his tchotchkes, including the $2 million King Kalla diamond watch he bought from David Orgell jewelers.
He will still reap a $7 million to $8 million annual income as well. He'll also get some income from Sony/ATV.
Sources point out that Mijac is now worth around $100 million, and will be an even better asset once it's free from debt.
Jackson's immediate plan, if he accepts the deal, is to downsize his Neverland costs. This would mean eliminating the zoo and cutting back the carnival.
Ultimately, the wisest thing to do — should he be found not guilty by the jury in his child molestation trial — is sell the ranch and move to a more reasonably sized estate with lower maintenance costs.
Of course, the pending plan does not cover money he owes to ex-wife Debbie Rowe. Jackson ceased paying alimony to her last year, and is involved in a court fight over that and custody of the couple's two children.
One easy remedy to his financial woes, of course, would be to stop incurring overwhelming legal debts.
I'm also told that Jackson is once again without counsel for his business dealings. The reason? As has often been the case lately, Jackson did not pay the lawyer who represented him most recently, sources say.
I am told there is some urgency to Jackson signing this deal.
Bank of America has, according to sources, lost its patience over his mounting debt. If for some reason he doesn't accept this latest proposal, I am told that he will really be in a dire situation.
Jackson, mind you, is not likely to sign this deal. Insiders tell me that he's encouraged his fans to spread the word that he's the victim of a "conspiracy."
"Michael doesn't want people to think he lost the Beatles," says a longtime friend. "He wants his fans to think it was stolen from him. He has to be the victim."
My sources also say that Jackson considers Branca one of the "conspirators," since his former attorney would reap a 5 percent commission on this sale — almost three times as much money as Jackson will make.
But push has come to shove, to use a cliché, and Jackson is unlikely to find a better deal.
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