17 Nov How Michael Jackson Made $150 Million in 2014
Bloomberg.com
By Anthony Effinger and Katherine Burton
Nov 16, 2014 9:00 PM PT
Elvis Presley boasts 12.4 million “likes” on Facebook (FB) and 187,000 followers on Twitter (TWTR) and recently released a duet with Barbra Streisand. Never mind that he died in 1977.
And that’s just the beginning for the King of Rock ’n’ Roll and other long-dead celebrities, Bloomberg Pursuits magazine will report in its Holiday 2014 issue. Reviving a corpse from a cryogenic deep freeze is still the stuff of science fiction — and even Madonna is unlikely to be entombed like Lenin when she dies — but every other promotional possibility is on the table. Jamie Salter, the branding guru who owns a majority of Elvis’s estate, is planning a “live” show in Las Vegas with Presley appearing as a hologram, much like the one of Michael Jackson that appeared at a show in Sin City earlier this year. Pinup queen Bettie Page, managed by dead-celeb superagent Mark Roesler, is slated for a holographic burlesque herself.
Today, deceased icons from pop culture’s heyday are enjoying unprecedented success, out-earning even their former flesh-and-blood selves, says Salter, one of the new breed of brand managers using technology to wring big bucks from superstars otherwise resting in peace (or so we hope).
These late luminaries are profitable in part because they first captivated fans in a pre-Internet age of truly mass media, dominating the popular imagination in ways few contemporaries can match, Salter says.
‘Reputations Intact’
Even better, they aren’t able to create the sort of mischief that bedeviled their handlers back in the day, potentially damaging their brand in the bargain. They can no longer lapse into drug-induced comas in hotel rooms (Elvis), assault girlfriends with vodka bottles (Jimi Hendrix) or set themselves on fire while freebasing (Richard Pryor).
“They can’t get pulled over for drunk driving,” says Donna Rockwell, a clinical psychologist with a celebrity clientele. “Their reputations are intact.”
Model Kate Moss, by contrast, can still embarrass sponsor Burberry Group Plc (BRBY) by appearing to snort cocaine on the cover of a British tabloid. Bets on the dead have lately paid off big. Salter bought the Elvis estate, including Graceland and the rights to the singer’s image and music, from Core Media Group Inc. in November 2013. Salter’s New York–based Authentic Brands Group LLC expects profits to rise by 25 percent this year thanks to Elvis-themed bathrobes, calendars, cookie jars, cuff links, luggage, Christmas-tree toppers and, oh yeah, music.
“We bought Elvis at the right time,” Salter says. “None of the kids listen to his music, but look at how they’re dressing, and their flipped-up haircuts.” (For a page ripped straight from Presley’s pompadour playbook, just Google Justin Bieber’s latest coif.)
Fame Psychology
Resurrection experts like Salter are making money on even-dustier icons. Visa Inc. (V) used the voice of Amelia Earhart in an ad during this year’s Winter Olympics celebrating women’s ski jumping. The once-sleepy Earhart estate, managed by Roesler at Indianapolis-based CMG Worldwide Inc., has since gotten offers to lend the trailblazing pilot’s name to a retail store and a restaurant chain.
The bizarre business works because the truly famous tend to remain famous, even in death, says Nathanael Fast, a professor at the University of Southern California’s Marshall School of Business who has done research on the psychology of fame. People like to talk about things they have in common, Fast says, and celebrities are among the more-pronounced topographical features of our cultural common ground.
Outselling Living Artists
Indeed, dead musicians today regularly outsell even living ones. And no one crushes mere mortals like Michael Jackson. When he died of a lethal cocktail of the anesthetic propofol and the anti-anxiety drug lorazepam on June 25, 2009, the King of Pop was more than half a billion dollars in debt, according to a March filing in Los Angeles Superior Court — much of it incurred from the upkeep of his 2,700-acre (1,093-hectare) Neverland Ranch, legal bills from defending child-molestation charges and legendary spending sprees on Rolls-Royces and almost anything else with a luxury label. If Jackson were an investment, he would have been a junk bond.
The singer’s savviest financial move was to name as his executors Los Angeles lawyer John Branca and music producer and family friend John McClain. With Jackson no longer dangling babies over balconies, Branca and McClain have been able to get down to business. In their hands, the Jackson estate made $250 million by extending the singer’s contract with Sony Corp. (6758), and more than $260 million from This Is It, a film cobbled together from footage of Jackson rehearsing for a series of concerts canceled in the wake of his death.
Immortal Tour
The estate shared a further $371 million in ticket sales with Cirque du Soleil on a big-top-inspired act called — what else? — The Immortal World Tour. (A second Jackson-themed Cirque du Soleil show called One permanently occupies an 1,800-seat theater at Las Vegas’s Mandalay Bay.)
Branca and McClain paid off Jackson’s debts in their entirety in 2012. Now, the money accrues to the estate and its beneficiaries: Jackson’s mother, Katherine, and his three children: Michael Joseph “Prince” Jackson Jr., 17; Paris Michael Katherine Jackson, 16; and Prince Michael Jackson II (aka Blanket), 12. Branca and McClain earn a 10 percent commission on much of the cash that flows into the estate, which so far totals $600 million, according to court documents. And 2014 could be the singer’s biggest year yet. After all, like Elvis, he’s still minting new music, releasing seven albums and DVDs since his death, including this year’s chart-topping Xscape.
Exploiting Stars
Naturally, the Michael Industrial Complex has its detractors, who accuse the estate’s managers of exploiting the star, releasing old songs not up to Jackson’s exacting standards.
“He would not have released anything like this compilation, a grab bag of outtakes and outlines assembled by Jackson’s label,” Jody Rosen wrote in Rolling Stone about 2010’s nevertheless million-selling Michael.
One of the consultants to the Jackson estate, Jeff Jampol, says that’s the single biggest challenge for managers of the dead: monetizing their memory without devaluing their good name. Jampol, 56, has been deeply in love with rock ’n’ roll since he first saw David Bowie play the Santa Monica Civic Auditorium in 1972. Music got him through a decade-long heroin addiction, during which doctors almost removed his leg, the flesh on it dead from repeated, misdirected injections.
After hitting rock bottom numerous times, Jampol got clean in 1989 and subsequently mentored longtime Doors manager Danny Sugarman through his own recovery. Afterward, Sugarman asked him to help manage the estate of the Doors, whose Bacchus-like lead singer, Jim Morrison, had died in 1971. (Of the four founding members, only drummer John Densmore and guitarist Robby Krieger survive.)
Platinum Albums
The Doors have done well with Jampol. Their album sales now total from 1 million to 2 million a year, up from 400,000 in 2003, when Jampol joined. They’ve sold a digital box set on iTunes, and in November will release Feast of Friends, an unfinished film chronicling their 1968 tour.
Jampol, who is 6 feet 8 inches (2 meters) tall and remarkably boyish-looking despite his decade lost to drugs, works out of the Hacienda Arms Apartments on Sunset Boulevard, once the most notorious brothel in California. These days, it’s hung with Doors albums in gold and platinum. Rick James’s bass stands by the door.
No Do-Overs
In addition to managing the Doors, Jampol shepherds the posthumous careers of Rick James, Janis Joplin, Otis Redding, Tupac Shakur, the Ramones and Peter Tosh. To hear Jampol tell it, he’s caring for careers as delicate and precious as Faberge eggs. One wrong product-endorsement deal, one craven tribute album, and a legend is reduced to mere lucre. And unlike, say, Madonna, who can endlessly reinvent and recover from the occasional misstep, his artists don’t get a do-over.
“It’s very gossamer,” Jampol says. “Every couple weeks, I poke my head into somebody’s office and tell them, ‘It’s now 10:45 a.m. If you’ve had coffee this morning, and you’re particularly energetic, by this afternoon you could completely desecrate and destroy what took Janis Joplin years to build. So have a careful day!’”
The estate of actor Steve McQueen, controlled by his son, Chad, and granddaughter Molly, is exceedingly cautious about entering into product-endorsement deals, says Lisa Soboslai, vice president of Bill Gates’s Corbis Entertainment licensing company, which represents McQueen. His heirs insist almost exclusively on pitching products McQueen actually owned, including Barbour jackets, TAG Heuer watches and Triumph motorcycles.
“They don’t want to do anything that’s not believable,” Soboslai says.
New Fans
Unlike some in the business, Jampol isn’t trying to sell old music to old fans of old artists. He’s trying to find new fans for old artists—and he isn’t sticking to just music. He’s promoting his artists as icons, betting the things that made James, Joplin and Morrison big in their day will connect with a new generation.
“Every four years, there’s a brand-new crop of kids who are blank canvases,” Jampol says. “If I can have my artist, with his or her magic, in the pop culture conversation where those 12-year-olds are, I win.”
Jampol often enters that conversation through social media, which he has wholeheartedly embraced. Thanks to Jampol’s efforts, the Doors have 17 million “likes” on Facebook. Wilco — whose The Whole Love earned a Grammy nomination for Best Rock Album of 2012 — has just 630,000.
The 27-Club
Celebrity superagent Roesler is another forward thinker on the subject. He’s been managing estates on behalf of heirs since 1981. One of his most profitable clients is James Dean, an actor with all the assets necessary for a boffo posthumous career: a catchy name (improbably, it was his own), a timeless look and a knack for embodying rebellion as effortlessly as Albert Einstein manifests intelligence. (For the record, Hebrew University of Jerusalem is the beneficiary of the late physicist’s estate, per the last will and testament of the man himself.)
Sadly, Dean’s demise at age 24 while speeding in a Porsche to an automobile race in Salinas, California, illustrates an unfortunate truth: An early death bodes well for future returns. The music industry reinforces this truism like no other. The so-called 27 Club includes dozens of stars cut down at that tender age, including Kurt Cobain, Amy Winehouse, Hendrix, Joplin and Morrison, to name but a few.
Dead-Legend Business
Salter, who is backed by private-equity firm Leonard Green & Partners LP, got into the dead-legend business in 2010, when he bought the majority of Marilyn Monroe’s estate for more than $30 million, according to a person familiar with the transaction. (He now owns all of it.) Before Salter got involved, the Monroe estate brought in less than $3 million a year through 300 licensing agreements for low-end products such as shot glasses and T-shirts. Salter has since whittled the number to 85, and the estate is on track to make about $18 million this year, according to people familiar with its dealings. Salter declined to comment on the revenue.
Many of his Marilyn-branded products make sense: spas and nail salons, a line of lingerie, hair spray and, soon, eyeliner. For teens, there are $25 T-shirts with Marilyn’s image and $49 body-hugging dresses, both sold at Macy’s. Last year, the late star appeared in an understated TV ad for Chanel No. 5 comprising archival footage overdubbed with an interview.
“They ask you questions,” Monroe says. “What do you wear to bed? Do you wear a pajama top? The bottoms of the pajamas? A nightgown? So I said, ‘Chanel No. 5.’”
Taking Risks
Other projects stray from the established narrative. In his office, Salter has a snowboard plastered with an image of Monroe in fishnets and a bustier. He has also created a cartoon character called Mini Marilyn aimed at little girls that’s more Hello Kitty than Some Like It Hot.
“Mini Marilyn empowers girls, encouraging them to be confident, take risks and dream big,” reads minimarilyn.com.
Left unmentioned is the prospect of naked pool parties with a Mini Bobby Kennedy and a Mini JFK. When Salter bought the Elvis estate, he also got Muhammad Ali’s name and image — even though the former heavyweight champion is still very much alive.
“He’s going to be huge,” Salter says of the 72-year-old, who suffers from acute Parkinson’s disease.
Not only did Sports Illustrated name Ali “Sportsman of the Century,” but he stands for religious freedom and social justice, having gone all the way to the U.S. Supreme Court to establish his right to conscientious-objector status during the Vietnam War.
Not a Sprint
In an interview, Salter hints at a deal with a big athletic brand.
“The story line has to work,” he says. “You have to remain on message. It’s a marathon, not a sprint.”
These days, with posthumous record releases vying with viral cat videos, the dead have to seem more alive than ever to effectively compete for consumers’ attention. After Ali dies, or perhaps even before that eventuality, we should expect to see him re-enter the ring, probably in Vegas, possibly as a hologram — and most definitely in his prime.
Full article: Bloomberg.com