Michael Jackson will leave behind more than his legendary music after his unexpected death on Thursday. The King of Pop will also be remembered by his mountains of debt -- which reportedly totals some $400 million.
Despite selling more than 61 million albums in the United States, filling concert-halls for much of his life, and serving as the theme for a decade-long attraction at
theme parks, Jackson ended his life so riddled with debt that he had to be bailed out by friends and colleagues more than a failing bank.
Most recently, Jackson received help from Thomas Barrack, chairman and CEO of the real estate investment firm
. Barrack purchased Jackson's Neverland Ranch for $22 million, just before the fairyland destination would have been sold at an auction to cover Jackson's debt.
Jackson purchased Neverland in Santa Barbara County's wine country in 1998 for $14.6 million.
At one point, Jackson owed
Bank of America
more than $270 million. In 2005 the bank sold that debt at a discount to private equity firm
Jackson was on the cusp of making a comeback before his untimely death, preparing to go on tour in July. This tour was designed, in great part, to help to pay off that debt.
Now instead of the tour, which was set to kick off in London on July 8, serving as a cash cow, it's another expense in Jackson's name. Tickets for the tour sold out on Tickmaster, of which
is a major stakeholder. It's unclear if fans will want their money back and how they will be paid if they do.
But how did the iconic pop star incur so much debt? It's no secret Jackson liked to spend. In 2003 it was reported that Jackson spent $20 million to $30 million more each year than he earned.
Then there was the 1993 lawsuit where he was accused of molesting a 13-year-old boy. Jackson settled the suit, but more allegations surfaced, ultimately resulting in the 2005 trial in which he was acquitted of all charges.
In order to get back on his feet, he agreed in 1995 to merge his ATV Music library, which he purchased in 1985, with
library for $95 million. He used half of the ATV assets as collateral to secure the Bank of America loan in 2001.
As Jackson borrowed more and more money, Union Finance & Investment sought $12 million in unpaid fees and expenses in 2002.
In the last years of his life Jackson was entangled in several lawsuits, including a $7 million claim from Sheik Abdulla bin Hamad Al Khalifa, the second son of the king of Bahrain.
In his lawsuit, Al Khalifa claimed he gave Jackson millions of dollars to help shore-up his finances, cut an album, write an autobiography and subsidize his lifestyle -- including more than $300,000 for a "motivational guru." The lawsuit was settled last year for an undisclosed amount. Neither the album nor book were ever produced.
Clearly, while it seems Jackson's 50% interest in the Sony/ATV music catalog could ultimately be worth as much as $500 million, his debt will not go away quietly.
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