Michael Jackson, the legendary pop start who died yesterday at 50, made an awful lot of money in his four decades in the music and entertainment business. He also lost a lot of money, especially over the past decade, leading to a few scraps with the alternative investments industry.
But alts firms came to the King of Pop’s rescue just as often, and a hedge fund was one of the major backers of Jackson’s planned comeback.
Jackson’s debt stands at about $500 million, The Wall Street Journal reports, and the crushing debt-service payments, combined with millions in losses suffered on bad investments and millions more frittered away on his extravagant lifestyle, wiped out much of his fortune, and got him into troubled with his private equity creditors.
Six years ago, Fortress Investment Group bought some of Jackson’s loans from Bank of America. But the pop star missed several payments, and by 2005, Fortress was threatening to call in the loans.
That crisis was averted when Citigroup refinanced some $300 million of Jackson’s debt. But last year, when Jackson fell behind on payments again, Fortress moved to foreclose on his famed Neverland Ranch in Santa Maria, Calif. This time, a hedge fund, Colony Capital, came to Jackson’s aid, buying his loans from Fortress and setting up a joint-venture with Jackson that now owns Neverland. Colony paid $22 million for Neverland, and is currently renovating Jackson’s longtime home for sale.
And it was Colony that helped back Jackson’s planned run of 50 concerts in London that was to begin next month.
“You are talking about a guy who could make $500 million a year if he puts his mind to it,” Colony’s Thomas Barrack told the Los Angeles Times last month. “There are very few individual artists who are multibillion-dollar businesses. And he is one.”
Indeed, ticket sales for the sold-out concerts totaled some $85 million, according to Billboard magazine, and the total haul was expected to reach $115 million.
“Over the last year, I have had the opportunity to know and work with this gentle, talented and compassionate man,” Barrack said in a statement. “We were privileged to help support his return to public life for his family, friends and fans, who meant so much to him.”