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Questions remain on Jackson's wealth

Acquittal leaves ‘many options’ to improve finances
/ Source: Reuters

A day after Michael Jackson walked shakily from a California court to face a free but uncertain future, questions abound regarding his finances and plans for his most treasured asset -- his stake in a music catalog with Beatles songs worth some $500 million.

Jackson, who was acquitted of all charges by a jury on Monday, is deep in debt, according to testimony at his trial.

But his courtroom victory could provide breathing room to address his cash shortage and take advantage of the interest in his stake in the income-spinning song catalog, which includes classics such as “Yesterday,” music industry executives said.

If Jackson had been convicted, many believe a quick sale would have been far likelier. The Beatles songs are jointly owned by Jackson and Sony Corp. through Sony/ATV Music Publishing company.

The 46-year-old star had borrowed against his holdings and has $200 million in loans secured by the catalog, according to prosecution testimony at Jackson’s trial. Those loans, first provided by Bank of America Corp., were sold in the past month to New York private equity fund Fortress Investment Group, which declined comment.

“I think at this point, he’s kind of absorbing everything. He’s got good partners with Fortress and at some point, he’ll want to start focusing on it, but he’s got many options,” said a person familiar with the matter.

Fortress was renegotiating the loans to extend their expiration beyond the December 2005 deadline, the person said.

“At some point, he might decide he has to sell the catalog but he’s not in a position where he’s forced to and it’s an appreciating asset,” the person said.

Attorney John Branca and music publisher Charles Koppelman were among Jackson’s changing cast of advisers until Jackson more recently looked to billionaire financier Ron Burkle for advice. Burkle declined comment.

Is Sony eager to buy?Music industry experts believe Sony is eager for the chance to buy the share of the catalog it does not already own.

“Sony/ATV has the ability to better exploit the catalog and would be better served to have a bigger stake in the economics of these copyrights of the Beatles,” said Barry Massarsky, a music industry consultant.

Jackson bought the publishing rights to the catalog for $48 million two decades ago at the height of his career.

“It’s one of the most-valued catalogs in the world and if I were Michael Jackson, I’d sell anything else before I sold ‘Yesterday’,” said Kathy Spanberger, president of Peermusic, a music publishing company.

Jackson’s musical achievements have long been overshadowed by his eccentricities and legal troubles, and it remains unclear if he can overcome his tarnished image, music executives said.

Jackson is said to have completed his obligations under a Sony Music contract, but there is little talk of a rival deal despite an immediate spike in interest in his music since his acquittal.

On Tuesday, for instance, “Billie Jean,” a track from Jackson’s 1982 “Thriller” album, shot up to become the 83rd most popular track out of a million on online music service Rhapsody.

“Michael brings significant baggage to the table. Any major label, no matter how predatory they are, will be hard-pressed to sign him to any long-term recording contract at this point,” said one label executive.

Others agreed. “I have a feeling that people, at least at first, are going to be very cautious,” said entertainment manager Ken Kragen.

Even so, Jackson could stage a concert tour to capitalize on his popularity outside the United States, experts said.

“If Jackson is determined to generate quick money, the best thing he could do is tour overseas,” said Gary Bongiovanni, editor for concert trade magazine Pollstar.