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OutFront
Who's The Unfairest Of Them All?
Brett Pulley, 08.12.02

Michael Jackson has failed to throttle back on a superstar lifestyle his record sales can no longer support.



It isn't difficult to imagine that pop star Michael Jackson could have been exploited at some point in his long career. He has, after all, been performing since he was old enough to sing his ABCs. But his recent tirade about mistreatment by Sony Music Entertainment and its chief, Thomas Mottola, has more to do with his own ailing finances and career slump.

The current nastiness comes just as Jackson's contract with Sony (nyse: SNE - news - people ) is about to expire. He could defect to Vivendi (nyse: V - news - people ) 's Universal Music Group, which just signed another star who landed on hard times, Mariah Carey, weeks after she was dumped by EMI. "If Michael Jackson was free, I think everybody would be interested," says Universal exec Zack Horowitz. But the smart money is that Mottola will forgive Jackson's outburst and re-sign him; both sides have too much at stake.

Jackson, 43, has earned half a billion dollars over his career, Forbes estimates. In the 1980s and 1990s he was a music deity, pulling down $50 million a year. Now the Gloved One, looking meek and passé in a macho, rap-dominated music scene, is caught in a financial squeeze caused in part by his own refusal to cut back on the superstar lifestyle he can no longer support.

The bizarre star is in debt for about $200 million he has borrowed to maintain his preference for $10,000-a-night hotel suites at the Four Seasons, his $50 million Neverland ranch and assorted perks. Much of the loan came from Sony, and Jackson put up as collateral his 50% interest in Sony ATV, which owns 300,000 songs, including 200 Beatles titles. Jackson also owns songs recorded by Elvis Presley and other stars. His publishing holdings are now worth about $450 million.

Jackson needed a big hit with his latest album, Invincible. But in eight months it has sold just 6 million copies worldwide, a poor return for the $25 million he spent to produce it (on top of Sony's $5 million). Better-selling albums from, say, Britney Spears or 'N Sync cost less than $5 million to make. Jackson blames Sony for failing to promote the album. Sony contends it has spared no expense.

The singer doesn't look to be in imminent danger of going broke. Forbes estimates his current net worth at $350 million, but he has heavy liens against his property, and his spending is out of control. Jackson spends millions a year on taxes and upkeep for Neverland and homes for relatives in southern California and Las Vegas. In the spring he racked up a $100,000 hotel bill on a brief trip to New York. A Beverly Hills jeweler, who describes him as kind but careless with his money, has sued him for payment for a $2 million watch. Recently, on the way to visit pal Elizabeth Taylor at the Bellagio in Las Vegas, Jackson made an impromptu stop to pick up a $10,000 bottle of perfume as a gift.

That kind of largesse can't last much longer unless Jackson's career reignites. He can trash Sony and Mottola, but the real culprit is--as Jackson himself sang so beautifully on an earlier album--"The Man In the Mirror."

A Franchise in Decline
Michael Jackson's earnings from album sales are ebbing. Here's an estimate of the singer's income and current wealth.
 
Off the Wall: $37 million
Thriller: $115 million
Bad: $57.5 million
Dangerous: $57.5 million
HIStory: $35 million
Blood on the Dance Floor: $10 million
Invincible: $15 million
 
OTHER INCOME SOURCES:
Tour earnings: $100 million
Endorsements: $30 million
Videos/films: $20 million
Merchandise: $25 million
Cumulative earnings: $502 million
Assets: $100 million (Neverland ranch; Encino and Las Vegas homes; other properties); $450 million (50% stake in Sony ATV and other music publishing)
Debt: $200 million
Net worth: $350 million