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'Michael Jackson still spends $2m a month'
February 14, 2004 17:47 IST
Despite rumours that his fortune has all but vanished, Michael Jackson continues to live like a king.
The pop superstar still spends around $2mn a month, according to the Guardian website. On a recent weekend, Jackson reportedly went on a car-buying spree despite his main creditor, the Bank of America, imposing a spending limit of $1.5mn per month.
On February 17, Jackson is due to repay a $70m loan to the Bank of America. At present, the bank takes 50% of his royalties and has a stake in other income.
Al Malnik, a Miami-based entrepreneur and adviser to Jackson, told The New York Times on Thursday that he was trying to have the loan extended to the end of 2005.
But on Thursday, Jackson's music manager, Charles Koppelman, denied the singer had financial problems, or that a $70m payment was due. "Michael is an individual who has the ability to generate huge sums of money," he said.
The apparent crisis coincides with a court hearing for Jackson in Santa Barbara on charges of child molestation involving a 13-year-old boy. But the financial revelations suggest a more immediate threat than the potentially drawn out court battle.
Jackson has two valuable assets: his catalogue of hits, such as Billie Jean, with an estimated value of $75m-$90m, and a catalogue of 250 Beatles songs, which Jackson jointly owns with Sony Music Entertainment.
The Beatles catalogue is thought to be worth between $800m and $900m. But if Jackson were forced to sell his share, which he has used as a $250m guarantee for the purchase of other song catalogues, there would be nothing left for him once taxes were paid and Sony had taken its share.
Similarly, Jackson's own songs have been used as security for the Bank of America loan. If he defaults on that, he would lose control of his songs to a New York-based finance fund.