Even though the King of Pop has passed, Sony awarded the Michael Jackson estate the biggest recording contract in history. The deal will award the Jackson estate a guaranteed $200 million, though the contract may net as much as $250 million. In return, Sony will release 10 Jackson albums–a mix of new and old songs–over a period of 7 years. The Wall Street Journal has the story:
The dollar amount is especially striking against the backdrop of the music industry as a whole, in which U.S. album sales have plunged 52% in a decade. Superstar deals worth tens of millions of dollars per album were rare even at the peak of the CD-sales boom in the late 1990s. Yet it also underscores that the biggest acts are becoming even more essential to record labels, as individual fans purchase fewer albums each year.
Since Mr. Jackson’s death on June 25, Sony has sold an estimated 31 million of his albums globally. By the first anniversary of his death, his estate expects to have earned $250 million from sales of music, merchandise and tickets to the posthumous concert film “This Is It.”
The deal should give Mr. Jackson’s heirs plenty of breathing room with respect to the crushing debt load he had built up in his final years. With his album sales dwindling and concert touring ground to a halt, Mr. Jackson borrowed heavily to finance his lavish lifestyle
The estate is likely to pay off about $125 million in debt by the end of this year, including $35 million owed to AEG Live, the promoter that was to stage a series of concerts by Mr. Jackson in London. The estate is likely to refinance another $325 million backed by Mr. Jackson’s two biggest assets: Sony/ATV Music Publishing, his venture with Sony that owns copyrights to 251 Beatles songs; and his 2,600-acre Neverland Valley Ranch outside Santa Barbara, Calif.
Could Michael Jackson have made this much money while he was still alive, given his tendency to accumulate debt? The King’s death sounds like a windfall for Sony, as sad as that is.