Concert promoter AEG Live took a titanic risk in signing [artist id="1102"]Michael Jackson[/artist] up for a 50-date concert run at the O2 Arena in London, mostly because the frail singer had a long history of announcing major deals and projects and then not following through. But, before his death on June 25 at the age of 50, Jackson seemed primed and ready to perform the shows, which generated more than $85 million in ticket sales.
Given that AEG had sunk more than $30 million into the production and is now offering full refunds to the nearly 1 million ticket holders, it would seem that the Los Angeles-based company could be in for some serious financial headaches as a result.
But, according to CEO Randy Phillips, that's not necessarily the case. Speaking at a news conference last week, Phillips claimed that a combination of savvy insurance planning and a stronger-than-expected demand for the commemorative tickets for the now-canceled shows might help erase some of those potentially crippling losses, the Los Angeles Times reported.
"For the record, this great company I work for is not bankrupt," Phillips said. "They're not going out of business and they're certainly not in trouble. I'm heartbroken, but the company is fine." While AEG offered full refunds for the tickets beginning last week, Phillips said nearly half the concertgoers who've answered so far have opted to hold onto their commemorative tickets, which, if that ratio holds, could help the company break even on ticket sales.
The concert-promotions company might also be able to turn to insurance underwriter Lloyd's of London to recover some of the production costs, such as salaries for nearly 200 employees, stages, aerial dancers, elaborate illusions and the price of expensive talent such as show director Kenny Ortega and choreographer Travis Payne. AEG reportedly bought a $17.6 million policy that covered the first 23 shows, but Phillips said the insurance payout would depend on the coroner's final verdict on how Jackson died. The initial autopsy on the singer was inconclusive, so a definitive cause of death is awaiting the results of toxicology tests, which could take several more weeks. Requests for confirmation from Phillips on AEG's plans were not returned at press time.
If Jackson is determined to have died accidentally — for example, if the toxicology tests show he died of an overdose of prescription medication — then Phillips said AEG has a legitimate claim and "we claim the full $17.6 million." Other potential sources of revenue include a documentary using the more than 100 hours of high-definition video shot of Jackson's rehearsals, including his final one just two days before his death. The majority of the proceeds from the sales of that project would go to Jackson's estate, but some would be shared with AEG, as well as profits from a televised tribute concert in London being discussed that would use some of the elaborate stage sets Jackson was going to employ during the shows.
Though AEG would not get a cut of any sales, Jackson's estate could also profit handsomely from the release of the singer's final two studio albums. Billboard reported that at the time of his death, Jackson was working on not only his long-awaited pop-music comeback CD, but also a separate unnamed instrumental classical work.
Akon has spoken often about his work with Jackson on the long-in-the-works pop album, and he told the magazine that the singer's main motivations for releasing the disc were his children, his fans and the smash ticket sales for the O2 dates. "He said, 'My fans are still there. They still love me. They're alive,' " Akon said. "His kids are like his first priority, and they had never seen him perform live. He was trying to create the most incredible show for his kids."
Among the songs Jackson was working on with Akon and songwriter Claude Kelly was the leaked "Hold My Hand." Jackson also reached out to composer David Michael Frank — who collaborated with Jackson on a 1989 TV tribute to Sammy Davis Jr. — two months ago, inviting Frank to his rented Los Angeles home so that he could help on an instrumental album of classical music he was preparing.
"He had two demos of two pieces he'd written, but they weren't complete," said Frank, who was impressed with Jackson's knowledge of classical music. "For one of them, he had a whole section of it done in his head. He had not recorded it. He hummed it to me as I sat at the keyboard in his pool house and we figured out the chords — I guess this recording I made is the only copy that exists of this music." Jackson reportedly called Frank several weeks ago to check on the progress of the orchestrations, mentioning that he was also interested in including a jazz piece for the collection. At press time, representatives for Jackson's family had not responded to requests for information about plans for the unreleased songs.
MTV's live coverage of the Michael Jackson public memorial service at the Staples Center in Los Angeles will begin on Tuesday at 12 p.m. ET / 9 a.m. PT.
For complete coverage of the life, career and passing of the legendary entertainer, visit "Michael Jackson Remembered."
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