Michael Jackson has sold more than 750 million albums worldwide and had his name and face appear on everything from movies to lunchboxes, but according to lawyers the King of Pop's estate is now worth just slightly more than a flat-screen TV.
In one of the most interesting behind-the-scenes legal battles I can recall, the IRS and Michael Jackson's estate are currently at war in a trial set to start early next year. Crucially, the case is solely about his worth at the time of his death, and Jackson's lawyers contend that at that time he was in nearly crippling debt with no significant streams of revenue because of child molestation charges and rumors of rampant drug use had scared away most corproate sponsors and halted touring.
[Jackson lawyer] Weitzman estimates that Jackson earned no more than $50 million from the licensing of his name and image when the pop star was alive, even during Jackson's Thriller heyday...And importantly, what matters most for tax purposes is the value of Jackson's name and likeness at the time of his death -- not now, after his executors have worked their magic. 'Michael Jackson had no merchandising deals then,' says Weitzman. 'Only after we began the resurrection and This Is It did things begin to change.' - Billboard, "Michael Jackson's Worth When He Died at Heart of Billion-Dollar Tax Court Battle"
The IRS begs to differ. Uncle Sam is contending that Jackson's estate is worth nearly half a billion. Their estimates place its worth at $434 million, a mere $433,997,895 difference, citing the success of the This Is It documentary as well as a host of memorial and tribute concerts, shows and memorabilia. It's unclear where money from his publishing and music would fit into this equation, especially after Sony's recent announcement that they were buying out MJ's share in Sony/ATV.
According to tax experts interviewed by Billboard, by the time all is said and done here, factoring in penalties, interests and legal costs, this could well end up a billion dollar case that affects how every artist's worth is assessed after their passing, from Tupac to Biggie to Dilla.
So once again, while legal battles often seem deathly boring on the surface, especially when it comes to taxes, the courts are often our only firm insight into the value of music in an industry essentially built on smoke and mirrors, where rappers post with fake stacks of cash, Kanye West says he's $50 million in debt while living in a lavish mansion and major record labels do their best to screw artists out of every penny.
If Michael Jackson can end up worth less than a round-trip ticket to Tokyo, no one's safe.