How Michael Jackson Made $1 Billion Since His Death
It may be unseemly to say, but it's sadly true: Michael Jackson might be worth more dead than alive. Thanks in part to a lucrative new record deal with Sony Music that extends through 2017 and the most successful concert film of all time, Billboard estimates that MJ Inc. has generated at least $1 billion in revenue in the year following his death. Through interviews with industry experts and our own number-crunching, Billboard examines the various music-based revenue streams that have flowed into the Jackson estate in the past 12 months.
Value: $392 million
Sony Pictures bought Jackson's rehearsal footage from AEG for $60 million. In retrospect, the price was something of a bargain. "Michael Jackson: This Is It" was released Oct. 28, 2009, and earned $72 million at the U.S. box office, according to BoxOfficeMojo.com, making it the highest-grossing concert film in history.
Overseas, the film earned $188 million at the box office; of that, $56 million was tallied in Japan alone. After AEG recouped the company's investment of more than $35 million in the canceled shows at London's O2 and the film, the bulk of the theatrical take-court documents indicate it could be as high as 90%-went to Jackson's estate.
On the home video front, the "This Is It" DVD has earned $43 million in U.S. sales, with 2.7 million units sold since its Jan. 26 release, according to The-Numbers.com, a division of Nash Information Services. Nash estimates the film made another $25 million in rental revenue.
In Japan-where the film was also sold as part of a special "This Is It" bundle for the PlayStation 3-DVD sales topped $18 million on its first day of release; 351,000 Blu-ray copies have been sold, according to rankings service Oricon, adding about $7 million to the total.
In terms of TV, the industry standard is that exclusive rights for ad-supported TV costs 12% of the domestic box office for a four-year window; this rule of thumb is in flux, however, as the length of exclusive windows extend and the number of outlets involved in the deals increase. In November 2009, Viacom purchased the exclusive U.S. TV rights to air "This Is It" on its MTV and BET family of networks-including VH1 and Palladia, as well as MTV and BET-for six years. Given the additional years in the contract and the film's box-office tally, the deal could be worth upwards of $15 million. (By contrast, FX is reported to have paid between $25 million and $30 million for just the U.S. commercial TV rights to "Avatar.")
With its family-friendly PG rating, "This Is It" can be shown in all distribution mediums outside of traditional theaters, including airplanes, cruise ships and hotel chains. Licensing fees for nontheatrical performances vary based on the movie and its potential reach and how long it will air after it debuts in theaters, but it's generally forecast to be about 7% of total revenue for a film. For "This Is It," that puts the number at $24 million.
Value: $130 million
Jackson's music publishing company, Mijac, is administered by Warner/Chappell. Based on a reported value for Mijac of at least $75 million in 2005, Billboard estimates Mijac currently has a value of around $150 million. At that value, it generates about $25 million per year in revenue. In the last 12 months, according to sources, that number could have doubled to as much as $50 million.
Jackson also owns half of Sony/ATV, formed in 1995 when Sony paid Jackson $90 million for 50% of ATV Music Publishing. Barry Massarsky of Massarsky Consulting says that Sony/ATV is comparable to BMG Music Publishing two years ago when Universal Music Group acquired it for $2 billion. Massarsky estimates Sony/ATV is worth about 80% of BMG at the time of acquisition, or $1.6 billion. Jackson's share is half that, or $800 million. Based on a multiple of eight to 10 times net publisher's share, Jackson's share of the company's revenue is $80 million per year.
Value: $35 million
Despite being canceled, the 50-show This Is It tour at London's O2 paid big dividends. Revenue from tickets retained by fans as souvenirs and not refunded brought in an estimated $6.5 million, and Bravado's This Is It concert merchandise brought in $5 million, both less AEG's share.
An AEG-produced Jackson memorabilia exhibit is showing in Japan and has brought in another estimated $3.5 million to the estate. Plans call for the exhibit to head to China.
Last August, Bravado followed its AEG/This Is It merch deal with a new pact with the Jackson estate that included a $10 million advance, sources say.
Based on conversations with insiders, Billboard estimates licensing royalties and retail sales accounted for another $10 million in revenue to the Jackson estate. Actual retail sales were far greater.
This week, gaming company Ubisoft announced it will release a dance-oriented Jackson videogame in time for the holiday season. Licensing fees weren't disclosed.
Finally, sources say there wasn't any advance on royalties and no guarantees paid for the estate's two-pronged deal with Cirque du Soleil for a tour and a Las Vegas residency, a deal structure in line with past Cirque tributes to the Beatles and Elvis Presley. After startup costs are shared by the estate and Cirque, revenue will come from box-office receipts and other ancillaries associated with the projects.
The financial tragedy here is what might have been. Billboard reported before Jackson's death that the O2 shows would gross up to $100 million and merch possibly another $15 million. Beyond that, AEG had a 36-month global touring plan in place with Jackson had the run successfully been completed.
Value: $31 million
In March, Sony Music Entertainment reached a deal with Jackson's estate to release 10 albums of the singer's music through 2017. The albums' content will vary-a collection of previously unreleased tracks is expected in November and a reissue of Epic's 1979 release of "Off the Wall" is anticipated next year. All told, the estate is guaranteed between $200 million and $250 million for the deal. Some of that amount was likely paid in an advance. No albums have yet been released, however. If just one of the contract's eight years is recognized, that would add $31 million to the money the estate received in the last 12 months. At the time of the deal, John Branca, who serves as special administrator for the estate alongside John McClain, said that Elvis is the model for Jackson's legacy. "To this day, there's interest in Elvis," he said. "And I think there will be enduring interest in Michael. It's our job to continue to expose Michael to new generations."
Reporting by Ed Christman, Ann Donahue, Gail Mitchell, Glenn Peoples and Ray Waddell.