Michael Jackson - The Secret Business Genius? His Estate Has Made Billions Since His Death

Remember the time when Michael Jackson was the richest pop star in the world? Michael Jackson may no longer be with us but his legacy is. While that legacy was blighted by the release of HBO’s controversial “Leaving Neverland” documentary, the financial success of his estate since his death, on June 25th, 2009 has never been questioned and is worth billions. 13 years after his tragic demise, numbers suggest that he earns around $362 million each year, more than the majority of musicians alive.

His estate is managed by industry heavyweights, former A&M Records executive John McClain and longtime MJ entertainment lawyer, John Branca. Branca was the guy who scored the industry-leading royalty rate that MJ enjoyed at the time (nearly $2 per album sold), allowing him to reap untold profits from what turned out to be the best-selling album of all time.

The Michael Jackson Estate is a blueprint for others to follow, and a lot has to do with his underrated business acumen, and the shrew deals he made whilst he was alive.

To be sure, Jackson's spending habits could put a Russian oligarch to shame. He blew the profits from sales of 750 million records on extravagances ranging from $10,000-a-night hotel stays to the construction and upkeep of his sprawling Neverland Ranch. Keeping money was not one of Jackson's strong suits. But piling up stacks of it -- and finding unusual ways to ensure that more would follow -- was one of his many talents.

How The Jackson Estate Has Made Massive Profits

John McClain and John Branca have turned the entertainer’s musical legacy into a billion-dollar empire. The first thing they did was sell Jackson’s own future music rights to Sony Music for $250 million — at the time the largest deal in the music business. 

Next up was the movie, “This Is It,” compiled from hours of rehearsal footage from the upcoming tour of the same name. Released in theaters around the world, the movie went on the generate $500 million. There have also been two posthumous albums, collated from material in the vaults — Michael in 2010 and Xscape in 2014.

These two successes saw other companies come calling. Pepsi, a previous famous Jackson backer signed a deal to license his image and Cirque Du Soleil signed a 50/50 partnership with his estate to produce two touring Las Vegas shows around his music and dance routines. 

Sony/ATV Deals

There’s no question that while at the peak of his popularity, Michael Jackson was one of the wealthiest pop stars on the planet, earning an estimated $500 million from his own music career, long before social media ballooned the potential earnings of celebrities. One of his most astute investments was purchasing the Beatles music catalog (as part of the purchase of ATV music) in 1984 for about $47.5 million. In 1995 Sony Music offered to pay Jackson $95 million to merge ATV with them. Jackson immediately earned back his investment.

Between 2005 to 2013, Sony/ATV grew to own two million songs, earning hundreds of millions of dollars. Today the company is worth $3 billion, based on estimated proceeds of $50 million to $100 million per year. The estimate marks a 6,000% increase in value from the catalog's initial purchase price -- better than the 1,650% return on Class A shares of Warren Buffett's Berkshire Hathaway since 1990. MJ had to sell some of his stake in 2006 as his finances were in shambles. According to multiple sources after years of overspending and overborrowing, he had personal debts of $500 million. Prior to his passing, he was forced to go back on the road to stage the "This Is It,” comeback tour, which ultimately hastened his death.

In 2016 Sony Corporation announced it would pay Michael Jackson’s estate $750 million for his 50% stake in the Sony/ATV music publishing company. A year later, Sony/ATV and Jackson’s estate announced a long-term extension of the administration of Jackson’s Mijac catalog which includes his own compositions as well as those of Sly & The Family Stone and Philly writer/production legends Gamble and Huff amongst many others. The financial details were not released. Sony also paid $287.5 million for Michael Jackson's 10% lifetime rights to the EMI library.

Neverland

Another good move: Buying the Neverland Ranch for $20 million in 1987. The property is now estimated to be worth as much as $90 million. A bad move: Spending $35 million on improvements to the property, including a go-kart track, a zoo, and a railway line large enough for a full-sized antique steam locomotive.

Broadway

The coffers of the Michael Jackson Estate have swelled significantly with the success of the Broadway musical, MJ. Having recently won 4 Tony Awards. In the week since the June 12 Awards show, MJ pulled in $1,661,000 — the biggest box office jump that week and a new high for a new show. With plans for a two-year national run and possibly a run in London’s West End with a different cast, MJ could turn into a massive money spinner. The precedent to aspire to is ABBA’s Mama Mia which has grossed over $4 billion worldwide.

The Michael Jackson Estate’s Billions

In 2016, buoyed by the Sony/ATV music publishing deal, Forbes estimated the annual gross earnings of the Jackson Estate to be $825 million, the highest ever for a music celebrity. In 2018 it was $400 million — the eighth year since his death that he had earned over $100 million, bringing his total earnings since his death to $2.4 billion. With MJ set to further boost the Jackson Estate’s earnings, the King of Pop once again appears to be invincible.

Unfortunately for Jackson, his spending habits vastly overwhelmed what financial shrewdness he possessed. If he'd been able to control his impulsive spending, he would have been a billionaire on the strength of the Sony/ATV catalog alone before he passed away. Instead, he died nearly half a billion dollars in debt.