Michael Jackson Was $500 Million in Debt at the Time of His Death, Court Paperwork Reveals
Photo Credit: Michael Jackson Dangerous World Tour 1993 by Constru-Centro / CC by 4.0
New court documents reveal that Michael Jackson was more than $500 million in debt â accruing $30 million a year â at the time of his death in 2009.The King of Pop, Michael Jackson, was only 50 years old when he died of apparent cardiac arrest in Los Angeles on June 25, 2009. But he was over $500 million in debt at the time of his death, according to new court documents filed on Friday, June 21.
Due to his exorbitant spending habits, Jackson was evidently accruing debt of $30 million a year. His planned extended This Is It residency at the O2 Arena in London was part of his expansive comeback plan, for which he had written new songs and gone through many hours of grueling rehearsals to perfect his performances for shows scheduled from July 2009 to March 2010.
In fact, the night before his death, Jackson had been through a six-hour dress rehearsal at the Staples Center in Los Angeles. The superstar desperately needed the funds to pay off his debt, which may have contributed to him overworking himself.
The New York Times reports that Jackson used his stake in a song catalog that included the Beatles hits as part of collateral for around $270 million in loans from Bank of America. The bank then sold the loans in 2005 to Fortress Investment Group, a company which purchases distressed debt.âHe spent a lot of money on jewelry,â certified public accountant William R. Ackerman testified as a defense witness on behalf of AEG Live in the wrongful death trial that took place in August 2013. âHe was tapped out,â said Ackerman, who explained to jurors that Jackson spent money on gifts, travel, art, furniture, and donations to charity.
Jackson had accrued mounting debt as early as 1993, and by 1998 he owned $140 million, according to the NY Times. Notably, Jacksonâs debt increased by about $170 million between June 2001 and June 2009. According to Ackerman, the interest on Jacksonâs loans grew over the years, from a little less than 7% to 16.8% annually.
âMichael was a very smart marketing person,â said Randy Phillips, the former CEO of AEG Live, in a statement to Rolling Stone in 2009. âPeople say he was feeble and manipulated, but he was powerful and a manipulator,â said Phillips. âHe wanted to clean up his finances. He was ready to stop living like a vagabond and settle down and earn money again. [âŠ] He wanted people to see his work and not just talk about his lifestyle.â
But after Jacksonâs death, the financial liability for launching a massive tour that didnât happen fell on the estate, with roughly $40 million owed to concert promoter AEG alone. In a March 2024 filing, estate executors John Branca and John McClain, along with their legal counsel, claimed that the estate, which is now valued at over $2 billion, was saddled with debt and on the verge of bankruptcy when Michael died.According to the filing, Jackson had âmore than half a dozen lawsuits pending worldwide,â more than â65 creditorsâ claimsâ filed in the estate, which spawned additional lawsuits, several of which resulted in litigation. Attorneys for the executors handled 15 lawsuits in the US and assisted with more in Europe and Japan following Jacksonâs death.
âThe Executors were able to renegotiate and restructure financing arrangements that existed at the time of Michaelâs death, at substantially reduced interest rates, enabling the Estate to avoid the loss of any assets to the lenders and ultimately to satisfy the encumbrances that existed at the time of Michaelâs death,â the petition reads.
Those renegotiations included the debt secured by Jacksonâs catalog, Mijac Music (over $70 million at the time of his death), the estateâs interest in Sony, and the mortgage on his Hayvenhurst estate and Lindley Avenue condominium. The executors also obtained an interest in EMI Music Publishing as a result of its negotiations with Sony. In July 2018, Sony acquired the estateâs interest in EMI for approximately $300 million â over a 5,000% return on the estateâs initial $50,000 investment.
