From the Jackson family’s perspective, it must have been a major disappointment Monday when the judge gave control of Michael Jackson’s estate to attorney John Branca and music exec John McClain. But from a business point of view, they might be the right men at the right time.
The boom in downloads of Jackson tunes and the prospect of unreleased songs to come, mean that this is a key moment to capitalize on the worldwide frenzy for the performer, who died June 25. The massive media coverage trained on the singer’s memorial service at L.A.’s Staples Center today offers strong evidence that Jackson’s estate will be highly lucrative in the coming years.
In addition to widespread TV and Web coverage of the memorial, the service will be shown in closed circuit at more than 100 theaters in the Midwest and South. Carmike Cinemas is making the high-def broadcast free in 28 of its theaters. Cinedigm Digital Cinema has arranged to broadcast the event live and free of charge in about 88 theaters, with capacity for approximately 17,000 people.
Among his major assets, Jackson owned 50% of the Sony-ATV Music Publishing catalog, which the L.A. Times estimated as worth $1.5 billion to $2 billion. That catalog, including songs by the Beatles, Elvis Presley, Eminem, Lady Gaga, the Jonas brothers and dozens of others, is a perennial money-maker.
But in the short term, Branca and McClain will be able to capitalize even more on a second catalog, Mijac Music Publishing, which is worth far less but has boomed in the past 10 days.
Mijac includes Jackson’s music as a solo artist (in addition to other singers and songwriters). Jackson also reportedly left behind a vast archive of unreleased recordings and video that will surely be mined for posthumous releases.
Time is of the essence to capitalize on the worldwide interest in Jackson’s legacy. Branca and McClain’s dealmaking experience will undoubtedly help accelerate the process.
Last week, Billboard magazine gave Jackson nine of the top 10 albums. Jackson became the first performer to chalk up more than 1 million downloads in a week since Nielsen began counting in 2004, logging 2.3 million downloads in the U.S. in one week.
On Monday, Los Angeles Superior Court Judge Mitchell Beckloff backed Branca and McClain’s claim of control over the estate, rejecting a request from Jackson’s mother, Katherine Jackson, to be put in charge or share control.
Beckloff granted Branca and McClain several temporary powers over the estate, including the right to negotiate a settlement with concert promoter AEG Live over refunds for Jackson’s canceled London shows. Beckloff stressed that Katherine Jackson should be given complete information about major transactions but that he, as the judge, would grant final approval.
Jackson died heavily in debt. But a court filing estimates that his estate will be worth more than $500 million. His assets are destined for a private trust.
The two men had been designated in Jackson’s 2002 will as the people he wanted to administer his estate. Attorneys for Jackson’s mother repeatedly objected to their appointment at Monday’s court hearing.
“It’s our desire to do everything we can to carry out Michael Jackson’s wishes and to maximize the estate,” said Howard Weitzman, who spoke after the hearing on behalf of Branca. Weitzman, whose clients have included O.J. Simpson and Courtney Love, issued a statement later calling the judge’s ruling “the correct decision.”
Katherine Jackson had applied to oversee her son’s estate, but that was before the 2002 will surfaced. One of her attorneys, Burt Levitch, expressed concerns about McClain and Branca’s financial leadership.
Jackson’s family had wanted Beckloff to delay the appointment of McClain and Branca as temporary administrators of the estate.
The family wanted more time to look into Michael Jackson’s affairs, to see if another will emerges and to accommodate Jackson’s memorial service, said a person close to the family who spoke on condition of anonymity because the person was not authorized to speak publicly.
Branca and McClain’s authority over Jackson’s estate will expire Aug. 3, when another hearing will be held.
Attorneys disclosed that another Jackson will from 1997 has been lodged with the court, but it will only become a factor if the 2002 will is invalidated. Details of the older will were not disclosed.
Levitch, an attorney for Katherine Jackson, told Beckloff that Branca had previously been removed from financial positions of authority by Jackson. Branca’s attorney says he was rehired by Jackson on June 17, days before Jackson’s death.
Katherine Jackson did not appear at Monday’s hearing. Branca did attend.
Levitch said it was unclear whether McClain would serve as an administrator because he was in ill health. Attorneys for McClain and Branca described him as having a physical disability but having a completely sound mind. They also noted a decades-long relationship with the Jackson family.
Branca had a 5% interest in the catalog in September 2005, according to Uniform Commercial Code filings in New York, but his interest was terminated in December 2007.
Katherine Jackson’s lawyers had argued in court that she needed to be special administrator of the estate to be able to determine if Branca and McClain had other dealings with Jackson or his partners that could be construed as a conflict of interest.
Paul Gordon Hoffman, an attorney for Branca and McClain, said some of Katherine Jackson’s concerns were unfounded.
“We’re not aware of any real conflicts at all,” he said in response to a claim that the men may have business dealings with parties such as concert promoter AEG Live.
In contrast, Hoffman said Jackson’s mother had more of a potential conflict administering the estate because she is a likely beneficiary.
“If there are any conflicts by the parties, Katherine Jackson rather than Mr. McClain and Mr. Branca have them,” Hoffman said.
Beckloff noted the contentious relationship brewing between Katherine Jackson and Branca, who personally delivered the will to the family’s home a week ago.
“We’re getting off to a bit of a rocky start here out of the gate,” Beckloff said toward the end of Monday’s hearing.
L. Londell McMillan, Katherine Jackson’s main attorney, said after the hearing that he did not expect a protracted fight.
“We have no reason to believe this is going to turn into a nasty fight over millions and millions of dollars,” McMillan said.
“We will be working to ensure that Mr. Jackson’s legacy will be treated with dignity. Mr. Jackson’s life and legacy will be memorialized tomorrow, and we will move forward.”
(The Associated Press and Pat Saperstein contributed to this report.)