A.J. Court Session 48: Estimating the financial loss caused by Michael’s death / No one is like him

Today, Arthur Erskine, the official accountant and expert for the Jacksons, took the stand to talk about the financial loss caused by Michael Jackson’s death. He worked on this case for more than 200 hours and was paid 475 dollars for each hour.

Erskine: “Michael Jackson was a songwriter and artist since he was five years old. He is different from all other late artists.”

In the mid-1980s, Erskine handled matters related to Michael Jackson’s royalties. In 1983, he dealt with the royalties of Thriller, the best-selling music album in history. He had not met Michael. When Michael’s lawyer John Branca in the 1980s sought to purchase the publishing rights to 4,000 Beatles songs, Erskine was hired to estimate the value of this collection. Their job was to buy this collection from its owner, Robert Holmes, an Australian billionaire. They estimated the collection at 40 million dollars, but Holmes wanted 49 million dollars. He also didn’t want to sell the song Penny Lane because the name belonged to one of his relatives. In the end, the deal was closed for 47.5 million dollars without that song. Erskine said Michael was smart to keep the royalties of his own songs.

Erskine said the average age of male singers’ active careers is 75 years, and Michael died at age 50, thus losing 25 years of income.

Erskine estimated the loss caused by Michael Jackson’s death in areas such as touring, selling items like T-shirts and hats, advertising, staging a show in Las Vegas, and a new album.

Erskine said the evidence shows that after the TII concerts in London, Michael intended to stage a worldwide tour (estimated at 37 months, two concerts per week, and a total of 260 concerts in Central Europe, Asia, Australia, and America) and a ten-year show in Las Vegas. In the Las Vegas show, Michael would not perform the program, but his music would be used. For the London This Is It concerts, the company sold 750,000 tickets in 5 hours, and the company did not expect such high demand—525,000 more people were still waiting in line for tickets.

Erskine: “Something like this had never happened, and after that it never happened again.”

Erskine said the company could have sold more tickets at higher prices and that all of them would have been purchased. Erskine listed the hypothetical net income of Michael’s tour as 452,155,095 dollars, with 12.9 million people out of the world’s 5.9 billion population. He called these figures conservative. The number of spectators for the History tour, Michael’s last tour, was 4.5 million people in 1996 and 1997, and its revenue was 165 million dollars.

Erskine said Michael decided to create a commotion with the TII tour and deliver the best shows.

He stated that the tour’s revenue in 2012 was 119,500,000 dollars. In 2012, Beyoncé signed a 50 million dollar contract for Pepsi advertising. Erskine used Beyoncé’s advertising revenue to estimate Michael’s hypothetical income, while noting that no one is comparable to Michael Jackson. Erskine said Michael could have earned 267,354,032 dollars from advertising contracts and another 50 million dollars from clothing advertising, for a total of 317,354,032 dollars. Erskine estimated Vegas show revenue at 269 million dollars. He also said Michael Jackson merchandise sales revenue was 121 million dollars.

In total, he said Michael could have earned more than one billion dollars from these activities (1,127,378,787 for a $108 ticket up to 1,511,182,374 for a $200 ticket). Erskine also said that from age 50 to 65, Michael spent 134 dollars.

He added that before retiring at age 65, Michael could have held four more tours. The company’s lawyer, Sabrina Strong, paid for Michael’s cancellation of a 1999 concert contract and his five million dollar penalty to show that Michael would not have held that many tours. Erskine said he hadn’t read previous cases and hadn’t interfered with his estimate, but logically he believes Michael would have returned to the stage and held tours.

Strong showed a video of Katherine Jackson’s interrogation in which she said she was surprised by her son’s decision for the TII tour because Michael always joked that he didn’t intend to moonwalk at age 50 and wanted to do other things. Katherine was unaware of this until Michael announced the tour during a conference in London.

Erskine, mentioning major artists such as U2, Madonna, Bruce Springsteen, and Bon Jovi, said that in 2009 Paul McCartney held 10 concerts, but because ticket prices were high and venues were large, he had the third highest-grossing tour that year. Only two artists sold all the tickets for their concerts: U2 and Madonna. Billy Joel and Elton John had sold almost all tickets. Erskine added that Michael Jackson appeared to be more successful than all of these people.

“Michael Jackson is in his own class. He is known as the King of Pop. He’s at the tip of the pyramid—much bigger than other artists. No one comes close. My view and also the view of the A.J. executives is that there is no one else like Michael Jackson.”

Erskine, referring to the million-selling albums of Michael Jackson, said the numbers reflect the huge number of his fans.

Strong pointed to the high cost of Michael’s living and said that from January to June 2009 he spent more than 570,000 dollars per month. She explained that Michael Jackson traveled a lot and stayed in expensive hotels. Erskine said he did not account for Michael’s living expenses and debts as a determining factor in his future income.

Strong addressed Michael’s medical cases. Erskine said he hadn’t reviewed them and was unaware of Michael’s drug use, but even if he had known, it wouldn’t have affected his financial estimates.

Michael had said he would retire from the stage after the This Is It tour. Erskine said it has happened that artists return to the stage after saying goodbye.

“Artists return to where they belong.”

Today, in the absence of the jury, the judge mentioned that someone had taken photos of jury members from behind the glass. He warned that photography in court is not allowed. The court windows were covered after that incident.

Source: eMJey.com / AP& ABC7