Michael Jackson: The Next Elvis?
A private-equity group is hoping to do for Michael Jackson something a long parade of music-industry veterans, lawyers and billionaire friends have failed to accomplish: Revive the pop star's dormant career after a 2005 child-molestation trial and a financial meltdown.
Colony Capital, which owns the Las Vegas Hilton and is a major shareholder in closely held Station Casinos, is in discussions with Mr. Jackson to get him back onstage and in the spotlight via a long-term stand in Las Vegas. It also wants the singer to sell his Neverland Ranch, the home of his private amusement park and menagerie and site of his controversial sleepovers with young children.
Colony and its executives aren't working with Mr. Jackson as managers or personal advisers. But they may nonetheless have a better chance of succeeding with Mr. Jackson than the many figures who have served in those capacities, thanks to Colony's major leverage with the pop star. The private-equity group in May bought from hedge fund Fortress Investment Group a $23 million loan backed by Neverland, in Los Olivos, Calif. Mr. Jackson, 49 years old, was in default on the loan and Fortress had initiated foreclosure proceedings. After buying the loan, Colony negotiated some short-term breathing room for Mr. Jackson. Under discussion is a scenario in which he would be allowed to put off making payments for a while, in exchange for more money further down the road.
"We bought the note and we've been having discussions with Mr. Jackson about a recapitalization and refinancing of Neverland in addition to various other business opportunities and mutual interests," says Colony CEO Tom Barrack.
Now Colony is urging the singer to emerge from the rural Nevada compound where he has recently been holed up with his family, to stage a residency performance -- either at one of its gambling and entertainment properties or elsewhere in Sin City.
Michael Amir, a spokesman for Mr. Jackson, confirms that the singer is in talks with Colony: "We're moving forward and looking to do some positive things in the future."
Since Mr. Jackson's 2005 acquittal on child-molestation charges, various entertainment-industry executives have pursued some kind of splashy comeback for him. For the most part, the singer hasn't played along. In February he backed out of a planned performance during the Grammy Awards telecast. Around the same time, he also declined a proposal to perform for 10 nights at a London arena. People who have spoken to Mr. Jackson say he has simply not felt up to the rigors of performing after his lengthy legal ordeal.
Recently the singer has been living in Pahrump, Nev., an unincorporated town 60 miles west of Las Vegas, where he has been writing new songs in a home studio and having his three children (ages 11, 10 and 6) home-schooled.
He did cooperate with Sony BMG Music Entertainment in the creation of a 25th-anniversary edition of his "Thriller" album, which posted unexpectedly strong sales in the U.S. and around the world. But even that undertaking -- which included one new song and remixes of several old hits -- may have contributed to Mr. Jackson's problems getting back to real work.
One person close to the famously distractible singer says that for a time he became preoccupied with making a feature-length movie based on the music video for the album's title track.
The current situation is the latest twist in a long-running saga that peaked three years ago. Funding his high-flying lifestyle with loans like the one backed by Neverland, he simultaneously stopped working and racked up millions of dollars in lawyers' bills to fight child-molestation charges.
The singer was acquitted in 2005 by a jury in Santa Maria, Calif. But he is still carrying almost $400 million in debt secured by his extensive music-publishing holdings, in addition to the smaller loan backed by Neverland.
Since then, according to people close to Mr. Jackson, he has cut back his personal spending somewhat. The biggest of Mr. Jackson's loans is backed by his share of Sony/ATV Music Publishing, a joint venture he owns with the Japanese media and electronics giant. Mr. Jackson's stake is likely worth $500 million or more. But the partnership agreement is set to expire in two years, at which point provisions kick in allowing one side to buy out the other.
People familiar with the situation say Sony has always presumed that it would exercise that right -- and has even worked to prevent creditors from seizing Mr. Jackson's half of the company partly with the aim of buying it later. But if Mr. Jackson had a deep-pocketed partner like Colony, it could complicate such a transaction.
Adding to the chaos until now: Throughout much of that time, Mr. Jackson has put his business affairs in the hands of a rotating cast of advisers. Some of these have dealt honestly with the singer, but others have had previously-reported conflicts of interest.
Mr. Jackson has run into trouble making payments on his loans, which have been passed around among banks and other Wall Street players who have balanced the risk of default against the possibility of acquiring the valuable assets backing them.
Colony in recent weeks has presented Mr. Jackson with a range of possible Las Vegas comeback scenarios -- each of which borrows elements of other pop stars' highly successful long-term Las Vegas runs.
One option would be for Colony to create for Mr. Jackson a purpose-built theater at one of its hotel-casinos, where he would need to perform up to 180 nights a year. Céline Dion's four-year run at Caesars Palace grossed more than $400 million, while Barry Manilow earned $23.7 million for 88 shows at the Vegas Hilton in 2007. But the rigors of any such commitment would likely be too taxing for Mr. Jackson.
The most likely option would be to create something like "Love," the Cirque du Soleil show built around Beatles tunes. Mr. Jackson wouldn't be a regular part of the performance but would appear for 20 to 30 performances a year, possibly with his brothers.
Any of these scenarios would be paired with a plan to restore his image.
The first step in that plan is to distance the singer from Neverland, which, as a focal point for the trial, is indelibly linked with those charges in the eyes of the public. Mr. Jackson has vowed never to live at the ranch again, given its associations. But he nonetheless has entertained visions of turning it into a family-oriented theme park, with rides for children. Colony executives consider the residence completely toxic to Mr. Jackson's image, and are urging him to restore the property's original name, Sycamore Canyon Ranch, and to sell it as quickly as possible.
Colony is also urging him to make a public statement further distancing himself from the controversy, in a venue like Oprah Winfrey's talk show. A person familiar with the discussions says the general idea of such remarks would be for Mr. Jackson, who moved temporarily to Dubai following his acquittal, to say that the American legal system exonerated him, and that he now hopes to move on.
The final step would be for him to stage some kind of televised performance -- ideally in the context of a high-profile charity concert -- to prove to the world that he can still sing and dance.
If all goes according to plan -- a long shot, to be sure -- in three to five years, Colony would like to develop a Thriller Casino with Mr. Jackson. That is something Mr. Jackson has kicked around for more than 10 years.
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