Michael Jackson’s net worth has always been the topic of much discussion and nothing has changed in that regard in recent years. As one of the most famous singers to ever walk the planet, the idea that his finances were ever in question may seem like a hard one to wrap your mind around.
However, Michael struggled with profligate spending. He amassed hundreds of millions but thanks to overspending, his estate was left with a massive debt when he passed away. In the decade-plus since his passing, his estate has amassed roughly $2 billion, putting him squarely in the black once more. Let’s take a closer look at his net worth and see how we got to where we are today.
The Glory Days
Between the years of 1985 and 1995, Michael earned between $50 to $100 million each year, thanks to his extensive record sales, tours, merchandise and endorsements. Unfortunately, he was spending it just as fast as he made it. He developed a lifestyle that cost him $50 million annually to maintain. The money that he spent for his child care case with Debbie Rowe and to settle his child molestation cases easily ran into the tens of millions.
Neverland Ranch alone cost him nearly $20 million to purchase and $10 million in maintenance costs. He even spent an added $35 million, so that he could turn the property into his own private amusement park. Michael also loved to spend on all kinds of exotic items, whether we are talking about luxury cars, animals from all different parts of the world and his famous diamond studded gloves.
Fortunately for his estate, he has since remained one of the most profitable public figures in the world, allowing them to recoup their losses and then some.
How Did The Debt Grow So Large?
Some may be wondering how a universally beloved singer could be a half billion in debt at this level of stardom but the answer is a simple one. Michael received a $380 million loan from the Bank of America to continue to fund his extravagant lifestyle. He had a 50 percent stake in Sony/ATV music publishing and that is what was used as collateral. As anyone could imagine, the interest rate on the loan was quite massive, costing him tens of millions each year. It was not long before he blew through the entire loan and an additional $120 million, causing the debt to reach $500 million.
What Is Michael Jackson Net Worth Today?
In a cruel twist of fate, Jackson’s death was a boon to his financial situation and his estate has benefited handsomely. Ever since his death in 2009, he has remained the highest-grossing deceased celebrity on the planet. The executors of his estate wasted no time regaining control of his finances in the years following his passing.
As soon as they had the chance to do so, they set up a monumental deal with Sony, selling off all of Michael’s future music rights. This deal fetched them $250 million. From there, they spent a great deal of time combing through all of the footage that Michael left behind. He had a sizable amount of home video that was taken during the last year of his life and they came up with the perfect idea.
They took the footage and made it into a film called This Is It, which has since grossed over $500 million worldwide. The record contract and the massive success of the film led to far more opportunities and the endorsements came calling once again. Cirque du Soleil and Pepsi both struck their own deals with the estate.
Pepsi’s deal was a licensing contract that allowed them to use Michael’s image and likeness. The Cirque deal led to the production of two different shows that were based on the singer’s life and musical catalog. The Jackson estate became 50/50 partners with the Las Vegas based company, allowing the estate to gross millions in the process.
Real Estate, Music Catalog, and More
In addition to these positive developments, the estate also has control over three massive memorabilia warehouses that are currently located in Southern California. At the moment, none of the items are going to be sold. The estate intends to wait until Michael’s children have reached the age of 18. Once this milestone occurs, the children will have the chance to decide which items will be sold and which ones they would like to keep.
The aforementioned stake in the Sony/ATV music catalog is also generating eight-figure payouts on an annual basis. The estate has managed to haul in over $700 million since his passing and this has left his net worth in a much rosier place than it was before. The executors used the funds to pay back the loan that he owed to Sony and now he is said to be worth at least $500 million.
The estate has managed to achieve its most crucial goal. They did not want to be reduced to having to sell off his entire music portfolio. Thanks to the moves that they have made, they have finally been able to achieve solvency for the singer. His will states that 40 percent of his assets will be left to his three children, 40 percent will be left to his mother Katherine and 20 percent will be given to various charities for children. Once Katherine passes away, her 40 percent will go to the children, leaving them with 80 percent.
So…What Happened To Neverland Ranch?
Of course, people wanted to know what was going to happen with the infamous Neverland Ranch, for a variety of reasons. Since this is the location where Michael spent much of his adult life, people were naturally curious as to what would take place. The estate has never had intentions of holding onto the property and it was not long after his death before it was placed on the housing market.
In 2015, the house was made available to the highest bidder but the estate struggled mightily to find a buyer. There was a major renovation, the home was renamed, and the price was slashed, to no avail. Michael initially purchased the home for $19.5 million but when you account for inflation? That comes to $44 million in today’s dollars.
All of the renovations that Michael made in order to make the home feel like his own are well documented, as he used the property as a means of filling the void of his lost childhood. The connections that the home had to major celebrities like Kim Kardashian (who had her 14th birthday party there, due to the connections her father established) and Elizabeth Taylor (who used the house for her 1991 wedding) did not allow it to sell any faster, either.
Millions were spent on upgrades and the price was set at $100 million. No takers would bite at that price and it was soon lowered to $67 million. With all of the controversy that took place at the property, it is understandable that the estate would struggle to sell it. It took until December 2020 before the property finally changed hands, when billionaire Ron Burkle finally submitted an offer of just $22 million that was accepted.
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Written by Allen Lee
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