Part TwentySeven - Smart Business

There’s a lot of speculation going on about Michael’s finances. Most of them are about in how much debt Michael was before he died. They almost talk about this as if Michael is and was the only person that ever had debts. These days there is hardly any person walking on this earth without debts, but i guess that’s what you get with all the plastic money, it makes it so much easier for people to spent money they actually don’t have. The funny thing in Michael’s case is that his debts started to get bigger and bigger shortly after he died. It went from 200million dollars up to almost 500million dollars in no time. People even clamed he had no cash at all, and he needed to do the This Is It shows to generate new cash.

When Donald Trump came on Larry King Live to talk about Michael he said that Michael was really business savvy. His exact words were: “He was actually a very, very smart businessman.” That’s when i started to think more about the finances and Michael’s assets. In a way this part feels very much like i’m invading Michael’s privacy but to be able to tell if Michael was as brook as a lot of people claimed i felt the need to look somethings up myself instead of just believing Michael was broke.

Throughout his life a lot of people made fun and lot’s of nasty comments about Michael’s spending habbits. Michael’s favourite things to buy was art. Not only did he love art but he also saw buying art as an investment. We all know you pay a lot for good art, but we also know that it only incraces in value when time goes by. But there are also other story’s, people would just drive up prizes as soon as the name Michael Jackson would fall, i guess a lot of people were eager to get some of the money Michael had. Of course for regular people 1miljoen dollar sounds and is a whole lot of money. But i really think we need to see this in the right perspective. For Michael spending a million must be something like 1000$ is for us. I’m not saying he didn’t know the value of money but if you have let’s say 50.000.000$ than one million dollar is like pocket change.

Of course art was not the only way Michael spent his money. Michael is also known for his generosity for donating a lot of money for charity. Most of the charity he donated money to had to do with children who were underpriveledge, sick, poor etc. But he did more than just donate money there are cases know that he was hands on. Michael visited as many children’s hospitals and orpaniges as he did concerts. He brought gifts for the children there and when he saw more was needed he made sure they got it. Not many people realize that donating money on charity is part of doing smart business. Donating money to charity cuts your taxes a lot. So in a way donating to charity is also a way of saving money.

The best known and smartest businessdeal he ever mady is getting 50% ownership of Sony Corp. Music publishing devision. It all started when Michael bought the ATV catalogue in 1985 for 47,5million dollars. By buying the ATV catologue Michael made sure he had a steady stream of income. In 1995 Michael merged his Music catalog with Sony. Corp. Music publisching division. To finance this merge he sold half his ATV catalogue to Sony. This deal was the smartest move ever cause now Michael didn’t owe only half the ATV catalogue but also half of Sony Music. The last time Sony/ATV was valued, it was said to be worth $30 Billion. So that means Michael’s share was worth 15 billion.

This however does not mean he actually had 15 billion it is what Sony/ATV is worth. We don’t know how much Michael earned each year by being half owner of Sony Music and the ATV catalogue. But let’s say it he only earned 1% off that 15 billion a year that would mean he at least earned 150million dollars a year from this alone.

Michael has never never gone bankrupt even though he had debts. But to be honest smart business man always have debts. This is again because when you are rich and have debts the debts again lower your taxes. If you would just look up things he owned how much it all increased in value for instance Neverland wich he bought for 17 million dollars, in 2004 it was worth somewhere between 96 million dollars and 120 million dollars. Again this doesn’t mean he had this amount of money but it is what it’s worth and that goes for everything Michael owned. It almost seems like whatever he bought would increase in value the minute he bought it. Another thing smart business man don’t have is lot’s of cash. The reason why is taxes again, the more money you have the more taxes you have to pay. So any smart business person makes pretty sure that taxes don’t go running of with the money.

Even though he had debts he used that money he owed to credit cards as investment money. That is how smart business man work, the golden rule while you are investing is to not ever invest your own money in business, do it with borrowed money. That way when an investment turns out to have been a good deal and you need money you can easily sell it pay of the debt and still have earned a lot of money. These things i mentioned are only part of what he owned and that could make money for Michael just like that if he needed it. So there is no way that Michael could ever be broke.

This all doesn’t mean Michael never made a wrong decision when it comes down to doing business, like everybody who is doing business he must have made his share of mistakes as well. But the people who are saying he was naive in business i think they need to do some research and learn from Michael and the way he did business.

It’s been said that he needed to tour to pay of his debts but if you really look in to everything he owned you would find out he could have just sold something pay of the debt and still be a very very rich man. But that is not the choise he made, he choose to do the “This is it shows” for some reason and we might never find out the real reason why he choose to do it.

Some info regarding ATV catalogue and Sony Music:
http:// mjjrealrealm.spaces.live.com/blog/cns!A679A9B694DD1478!2869.entry