Auction of Michael Jackson memorabilia during Julien’s Auction in Las Vegas (AP Photo/Laura Rauch)
Michael Jackson is not dead. No, he’s not on a deserted island chilling with Tupac and Elvis (who some believe faked their deaths), but he is certainly alive in corporate and social spirit, impacting millions of people.
Michael will make 1000 times more money in death than most people make when they are alive. But similar to when he was alive, massive amounts of cash will have to be generated in order to counter the enormous debt that Michael created while he was doing his thing.
Reports have stated Michael Jackson’s debt to be as high as half a billion dollars, enough to make some major corporations blush. What’s worse is that this debt was not created via a series of sound financial investments: it was conceived by building personal amusement parks, buying rare monkey statues, and rocking his way from one expensive store to the other.
Michael’s spending became his addiction. Financial needs could have been what led to him agreeing to do 50 concerts in London this year (a tour he was preparing for just before his death), when he may have not been able to handle one. It was starting to get sad watching Michael perform, similar to watching Muhammad Ali after he’d spent 10 years dealing with Don King. While the 50-year old Michael Jackson may have given a great performance, it would probably be something less than what we’ve come to expect.
African Americans love entertainment. We do it well and we are some of its biggest fans. What we don’t always grasp is the financial side of the entertainment business. We love the BET Awards, but we don’t realize that the BET Awards exist as a form of revenue generation for corporate sponsors.
While one entertainer after another is slammed financially, many non-black attorneys and managers are retiring comfortably. Remember the infamous contract signed by the group “New Edition”, who ironically did a Jackson 5 impersonation at the BET Awards? They created several number one songs on their first album and got a check for $1.87.
What can be worse is that when we are famous, some of us gain an insatiable appetite for the finer things in life: fancy cars, entourages, and expensive jewelry. But we can sometimes forget that with every financial withdrawal, there must be an equivalent investment, and the investment can’t just be in the recording studio.
Much of the wealth of African American entertainers is in the form of “human capital”: wealth created from labor or unique human skills and expertise. Human capital is typically a perishable good: you can’t rely on it forever. But rather than transferring this wealth into a non-perishable commodity, we keep going back to “the well”. The boxer always looks to find another fight to get out of financial trouble. The singer looks to do another album. The basketball player stays on the team for another season after his 40th birthday. The list goes on and on.
I didn’t want to see Michael perform after the age of 40. I wanted to see him own a few record labels. I wanted to see him managing dozens of exciting new artists. I wanted him to make his money from stocks, bonds and real estate. Rather than trying to dance like a 20 year old on his 50th birthday, Michael Jackson should have had his portfolio doing the moon-walking for him. Similarly, rather than seeking to keep on working until the day our body says no, we should seek to invest in financial vehicles that will work for us longer than we are physically able to work for ourselves.
It is my hope that as we analyze MIchael Jackson’s career, we don’t just learn a few dance moves. We should study his financial mistakes, his hurdles, and his missed opportunities.
In the life of Michael Jackson, there are many great financial lessons to be learned: The best way to honor him is to grow from his experience.