Michael Jackson's 'Tangled Web of Financial Issues'

An article in Rolling Stone describes Michael Jackson's posthumous money matters as a "tangled web of financial issues that may reverberate for months."

Jackson's unexpected death last Thursday at age 50 left behind 50 scheduled shows at London’s O2 Arena next month might have grossed a potential $70 million. That, the article says, would have gone a long way towards paying down massive debts owed on his Neverland Ranch and a multitude of legal payments, including Jackson's $25 million out-of-court settlement after child-molestation allegations in 1993.

A Newsweek article on the same topic says that once all the knots are unraveled, despite his high spending and deep debts, Jackson's estate should prove to be profitable.

Jackson’s death means the 750,000 fans who bought tickets beginning at $81 apiece for the sold-out shows must receive refunds, and the promoter, AEG Live, will have to battle with insurance carriers over the liabilities. Billboard magazine estimated AEG has already spent $10 million in payments to Jackson and $20 million on an elaborate stage production, according to the Rolling Stone piece. If his death is found to be drug-related, the situation gets more complicated for Jackson's promoters.

Jackson also owns a 50 percent stake in Sony ATV Music Publishing, which takes in $300 million to $500 million a year from Beatles, Bob Dylan, Eminem others’ songwriting royalties. Jackson had reportedly borrowed hundreds of millions of dollars against this investment, which he owned for more than 20 years.

As more information comes out and Jackson's estate is settled, it will likely serve as an interesting case study for CPAs.