October 29, 2009

Today multi-year, multi-million dollar contracts are common-place in the sports and entertainment business. Whether we are talking about Tiger Woods, Michael Jordan, Celine Dion, Madonna, Michael Schumacher, Sachin Tendulkar, Alex Rodriguez or Dale Earnhardt Jr. - being good at what you do brings good things to you (if you don’t lose the plot).

A seminal moment that redefined sports and entertainment valuation was Pepsi’s signing of Michael Jackson in 1986 for a $15 million three year deal. That’s 1986, 23 years ago, when Jordan was in his 3rd NBA season - the King of Pop nailed the deal that changed the landscape forever.

It is ironic that here we are in 2009 with Tiger Woods making $100M/year, Oprah Winfrey making $385M/year… Michael Jackson is no more and yet he is going to probably going to be the richest sports or entertainment personality dead or alive for 2010.

Let’s do a quick tally:

• He had about $300M in debt in 2009. Just cooling his heels, he still made $75M/year from his Sony Publishing stake.
• Neverland Ranch, which he barely retained control of is worth $35M, probably much more now that he is no more.
• Sony Publishing stake is probably worth $500M if sold today
• Other assets - $100M?
• Another $100M in legacy album sales because of his passing, conservatively speaking. 9 million MJ albums were sold within two weeks of his passing.

the customer response to Michael Jackson’s death has been staggering and unprecedented — we took more orders for Jackson CDs and MP3s in the first 24 hours after his death than we did in the previous 11 years of the Amazon music store.

• ‘This Is It’ will gross $200M by Sunday night. It made $2.2M Tuesday night alone. Worldwide - it is going to pass $300M conservatively.
• Apparently, there are an untold number of songs he hasn’t even released - which his estate owns the rights to, so that’s another $20M on a bad day.

I am sure Forbes or Fortune will do a more accurate analysis in 2010, but I am pretty sure the Jackson estate is going to make $500M+ this year. The one who started it all in 1986 is back on top.

Michael Jackson the person was an enigma, and that’s being charitable. Michael Jackson, the entertainer was truly the King. You only have to watch ‘This Is It’ to understand what it takes to be who he was. To be 50, and be working for 42 years. To live a hundred lifetimes worth of experiences and yet be humble. To respect his profession and have supreme command over his art form.

I always look for the good in these human outliers… and Michael knew entertainment and his audience better than anyone I have seen.

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