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Katherine Jackson’s wrongful death suit against AEG Live will go to the jurors today after closing arguments were made by both but the prosecution and defense. Whatever jurors decide, the case could have long lasting implications on tour deals going forward, especially those for superstar artists.
In “net” tour deals, where promoter/producers like AEG Live and Live Nation pay all expenses, employ everyone, and split profits with the artist, the traditional lines of whom is legally employed by whom have been blurry. Even though the producer signs the checks, the artist typically holds final sway on everything from the lighting company to the tour caterer or masseuses, with varying levels of input.

Michael Jackson-AEG Trial Reaches Closing Arguments

 Until now, just how exposed these producers may be has not come under much scrutiny.

Testimony shows that AEG was to have paid Dr. Conrad Murray, already convicted of involuntary manslaughter in relation to Jackson’s death from an overdose of Propofol. But, as AEG attorney argued in his closing arguments, the contract was never fully executed and money never changed hands, and even if it had, Murray was Jackson’s choice, and not even on AEG Live’s radar prior to the promoter putting together the deal for the ill-fated This Is It concerts in London. So while AEG paid Murray, he was Jackson’s doctor, just as an artist might choose a specific caterer to carry on tour. “This was a choice Mr. Jackson made,” Putnam said yesterday. “He was a grown man.”
Obviously, the AEG Live/Jackson/Murray triangle is unique. While there is always some exposure to producers, and they know this and protect themselves through insurance and history with vendors, hiring a 24-hour care doctor is very different than hiring a lighting director, especially given Jackson’s own history.

Still, producers’ heads have been turned that such a potentially damaging suit was ever brought to bear.  “I believe that, regardless of the jury findings in the case against AEG, promoters and producers will think long and hard about how to structure employment and contractual relationships with individuals brought in, either on behalf of or at the behest of the artist,” says veteran music business accountant/tour producer Bill Zysblat, partner in RZO Productions whose clients include U2, the Rolling Stones and David Bowie. “This level of exposure was clearly never contemplated, and I suspect adjustments will be made as a result.”

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More than $85 million worth of tickets had been sold for Jackson's 50 date run at London's O2 Arena, which is operated by AEG Live parent AEG. Production costs ran between $23 million and $25 million, according to AEG, although other industry sources say the cost was closer to $30 million. Some have estimated that Jackson's advance on the shows could have been as high as $10-$20 million.

Earlier this week, the prosecution proposed that jurors award $290 million to Katherine Jackson and the singer's children for non-economic damages such as the loss of love and comfort. While no specific figure was given for possible economic damages, lawyers urged jurors to make their own decision while reminding them that expert witnesses had said Michael Jackson could have earned more than $1 billion had he lived longer.