Greenburg Zack OMalley - Michael Jackson, Inc : the rise, fall and rebirth of a billion-dollar empire

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Praise for Michael Jackson, Inc.

A fascinating, fresh, detailed account of how Michael Jackson changed the game for artists in the entertainment industry, packed with new angles and insights. Greenburg avoids cheap sensationalism in favor of real, research-based reporting. The result is at once a story of Jacksons remarkable business acumen, as well as a cautionary tale about the price of the ticket. While Jacksons success came at a great cost, reading this book makes clear how he paved the way for generations of artists to come.

Joseph Vogel, author of Man in the Music: The Creative Life and Work of Michael Jackson

Jackson was crazy like a fox, and could be as cold in business as he was hot onstage and in the studio. Im crazy for this gripping, beautifully reported book.

Michael Gross, author of House of Outrageous Fortune

We know the circus that Michael Jacksons personal life became in the media, yet Zack found the stories of who he became in the business world, which was starkly different and industry influencing. Jackson went hard in the vocal booth and even harder in the boardroom. Artist-entrepreneurs like Jay Z, Diddy, and Lady Gaga owe him the world; were indebted to Zack for shedding light on Jacksons business acumen.

Datwon Thomas, contributing editor at Ozy.com and former executive editor of VIBE

The King of Pop is perfectly captured by Zack OMalley Greenburg, who has a journalists eye for detail with Michael Jackson, Inc. The words dance across the page, the mark of a writer with vivid, natural storytelling talent. Bravo, Zack!

Chuck Leavell, keyboardist for the Rolling Stones and author of Growing a Better America

ALSO BY ZACK OMALLEY GREENBURG

Empire State of Mind: How Jay-Z Went from Street Corner to Corner Office

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Copyright 2014 by Zack OMalley Greenburg

All rights reserved, including the right to reproduce this book or portions thereof in any form whatsoever. For information address Atria Books Subsidiary Rights Department, 1230 Avenue of the Americas, New York, NY 10020.

First Atria Books hardcover edition June 2014

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Interior design by Paul Dippolito

Jacket design by Anna Dorfman

Jacket painting by Borbay

Author photograph by Michael Letterlough, Jr.

Library of Congress Cataloging-in-Publication Data

Greenburg, Zack OMalley.

Michael Jackson, Inc.: the rise, fall, and rebirth of a billion-dollar empire /

Zack OMalley Greenburg.

pagescm

Includes bibliographical references and index.

1. Jackson, Michael, 19582009Finance, Personal.2. Popular musicEconomic aspectsUnited States.I. Title.

ML420.J175G75 2014

782.42166092dc232013045449

[B]

ISBN 978-1-4767-0596-5

ISBN 978-1-4767-0638-2 (ebook)

For Cousin Andrew, another star gone too soonand for Danielle, who rocks my world

Once every few months during the mid-1980s, a handful of Americas savviest businessmen gathered to plot financial strategy for a billion-dollar entertainment conglomerate.

This informal investment committee included David Geffen, whod launched multiple record labels and would go on to become one of Hollywoods richest men after founding DreamWorks Studios; John Johnson, who started Ebony magazine and would become the first black man to appear in the Forbes 400 list of wealthiest Americans; John Branca, who has since handled finances for dozens of Rock and Roll Hall of Famers including the Beach Boys and the Rolling Stones; and Michael Jackson, the King of Pop and chairman of the board, inscrutable in his customary sunglasses.

Shares of the entertainment company in question were never traded on the New York Stock Exchange or the NASDAQ. Though few would even consider it to actually be a company, this multinationals products have been consumed by billions of people over the past few decades. Had the organization been officially incorporated, it might have been called Michael Jackson, Inc.

In 1985, this conglomerate made its most substantial acquisition: ATV, the company that housed the prized music publishing catalogue of the Beatles. Included were copyrights to most of the bands biggest hits, including Yesterday, Come Together, Hey Jude, and hundreds of others.

At an investment committee meeting months before the deal was consummated, however, the acquisition was looking unlikely. Michael Jackson, Inc. was deep into negotiations with Australian billionaire Robert Holmes Court, whose asking price for ATV had soared past $40 millionprompting disagreement among Jacksons inner circle over how to proceed.

CBS Records chief Walter Yetnikoff, a confidant who wasnt on the committee, found the price to be exorbitant, and he had plenty of company.

Not wanting to upset anyone, Jackson remained silentas he often did in meetingsbut hed already made his decision. He scrawled a note on the back of a financial statement and passed it to Branca beneath the table.

John please lets not bargain, it read. I dont want to lose the deal... ITS MY CATALOGUE.

A few months later, Jackson purchased ATV for $47.5 million. Today, that investment alone is worth about $1 billion.

As evidenced by the size of the empire he left behind when he died suddenly in 2009, Michael Jackson was effectively a corporation in and of himself. He was not only the founder and creative force behind this empire, but also its most important product. By the middle of the 1980s, he chaired an organization that included Branca (Jacksons chief executive officer, if you will), manager Frank Dileo (his chief marketing officer), and a handful of others.

Jackson and his team made many game-changing moves beyond acquiring ATV. Among them: creating and promoting Thriller , the bestselling album of all time (roughly 100 million units sold), landing unprecedented endorsement deals with Pepsi ($5.2 million in 1983, $10 million in 1987, $15 million in 1990), and launching record-setting excursions like the Bad Tour ($125 million in gross ticket sales). The latter drew 4.4 million people, who each paid about $28 per ticket. With a modern price of $130, it would have grossed nearly $600 million, making it the second most lucrative tour of all time. At $200 per ticket, it would have been number one.

I got to witness the divinity in him every night, says Sheryl Crow, who served as one of Jacksons backup singers on the Bad Tour. [He had] that thing that is not quantifiablethat thing that you watch, and you cannot figure out why it is that you feel the molecules in the room change, but you are aware of it.