Wondering about Michael Jackson's assets

By DAVID MOON, Moon Capital Management, LLC
July 12, 2009

I missed the Michael Jackson memorial service Tuesday. CNBC didn’t broadcast it and I didn’t win any tickets in the online drawing. But I have thought about Jackson quite a bit over the past 18 days.

Anyone who has watched CNN or Fox News since June 25 has thought about him.

Jackson’s will was a total of five pages, and two of those were signature pages. Although the most relevant document in his estate plan is a Family Trust document, I don’t think I’ve ever seen a will this short. Either Michael’s will is carelessly brief or mine is needlessly long.

I’m going to look into my will.

When Jackson announced his series of comeback shows that were about to commence, we were treated to reports of his financial problems and possible impending bankruptcy. Now that he’s dead, people from the music industry have been on television shows explaining that Michael didn’t have negative net worth, he simply had a liquidity problem.

It sounded a lot like some banks to me.

Jackson owned the publishing rights to hundreds or thousands of songs that, in the right circumstances, would be worth hundreds of millions of dollars. The only problem is that those assets didn’t generate enough cash flow to support his debt service and spending needs.

In life, Jackson needed to liquidate the publishing catalogue in order to monetize the assets. In death, some of the assets may begin to generate more cash flow.

Maybe I don’t understand the music business, but it’s hard to believe that someone who sold 750 million records has debts that might total a half billion dollars.

Wow. Imagine if he had more than two ex-wives. Singer Phil Collins has reportedly paid a total of $84 million in settling his three divorces.

Maybe one of the reasons Jackson had money problems is that he was still an owner in the 2,600-acre personal amusement park, yet he was renting a home to live in.

Advice: if there’s a chance you have money problems and you decide not to live in the 13,000-square-foot home you already own, rent a place that costs less than $100,000 a month.

I doubt that all of the people who’ve come out of the woodwork to claim their 15 minutes of fame were actually close friends of Michael Jackson. If they were, did any of them notice that Mike had a live-in doctor? That’s a clue there’s a problem.

I really like my doctor, but I’m only going to ask him to move in with me if I’m about to die and I want him to watch me as I go.

My favorite Michael Jackson songs were “A-B-C” and “One Bad Apple,” that is, until this week when someone told me that the Osmond Brothers recorded “One Bad Apple.”

It’s well known that Jackson owned the rights to the Beatles’ catalogue of music, which is ironic, since he died on June 25, the same date the Beatles recorded “All You Need is Love” in 1967.

David Moon is president of Moon Capital Management, a Knoxville-based investment management firm. This article originally appeared in the News Sentinel (Knoxville, TN).

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