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| 08 November 2007 |
The AEG contract was for a maximum of 31 concerts between July 26 and September 30 2009, and the first leg had to be a minimum of 18 shows. A greater number of shows could be agreed, but the initial contract was as stated above, UNLESS AEG could prove that more shows were needed in order to recoup the advances it paid to Michael.
We now know from the cancellation policy that the Specified Costs, Expenses and Commitments estimated to have been spent by AEG and/or The Michael Jackson Company before the shows began, were $17.5m. After 13 shows (estimated income of $18,643,040) this money would have been recouped, and the concerts would be in profit.
So this means that the minimum of 18 shows in the contract were more than enough to cover the costs estimated to be spent before the shows began.
This Is It had sold out 50 concerts.
Where is the written contract for the additional 19 shows, making it up to 50? I certainly have not seen or heard of one, so to my mind that suggests that either the agreement was verbal, or the contract for the 19 shows is being kept under wraps for now.
The other fact that seems to have gone unnoticed by a lot of fans, is that the cancellation policy covered costs spent by AEG and/or The Michael Jackson Company, which means that both AEG and The Michael Jackson Company benefit from the policy, not just AEG.
The AEG contract ran until 31 December 2011. Yes you read that right December 2011. Which means, if AEG could prove that more shows were needed to recoup advances, they could keep Michael performing for 2 and a half years. And the contract also allowed for AEG to extend beyond 31 December 2011, if there was a World Tour or if the advances had not been paid.
The contract also agreed to pay Dr Tohme Tohme $100,000 per month, under an agreement with Tohme’s company TT international LLC. Tohme’s salary was part of the advances agreement, that was paid out of Michael’s 90% of the profits. If Tohme had not been looking out for Michael’s best interests when the contract was being discussed, he could have kept other promoters offers from reaching Michael. Leonard Rowe says he knew of other concert offers which were for $10-15m PER PERFORMANCE, and would have solved Michael’s financial problems, and Michael would not have had to sign with AEG at all. So was Tohme working against Michael, and was Michael unknowingly paying for the deception financially? We know that one company, Allgood Entertainment, did manage to get their contract in front of Michael, via Frank DiLeo. The meeting between Frank and Allgood was in November 2008, when Tohme was Michael’s manager, not DiLeo. This suggests to me that Allgood were unable to make the offer to Michael directly, so they tried to go via DiLeo. Michael was negotiating with AEG in earnest from around October 2008, and did not sign until January 2009, so perhaps someone was stopping him seeing other offers, in order to ensure the AEG contract was the one that got signed? The Allgood contract was for a Jackson5 reunion for one night in July 2010 – Michael was to get $12-15m for one night. In my other blog here, I calculated that 50 shows for AEG would net Michael approximately $53m, that’s just over $1m per show NOT $12-15m per show! Michael was talking to Allgood about their contract in May 2009, that’s AFTER he’d signed the AEG contract and when he was in the middle of rehearsals for This Is It. The story goes that he rejected the idea, because Allgood wanted pay-per-view and Michael didn’t like pay-per-view. I think Michael wanted to cancel or postpone some or all of the This Is It concerts, until after the Allgood concert, but he was told ‘No’ by AEG.
Another company, Citadel Limited, were also in negotiations with DiLeo in the first quarter of 2009, for a musical event in Trinidad and Tobago, featuring Michael, to take place in the last quarter of 2009. The first leg of the This Is It concerts would have finished in September, so this is feasible. DiLeo had signed a Binder Agreement, and Citadel had wired him a total of $300,000 as part of this agreement. After 25 June 2009, Citadel wanted their money back, and filed a lawsuit against DiLeo to recoup it. It is not clear exactly when DiLeo started to work for Michael again, but I would guess maybe March 2009.
So could Michael have gotten himself out of the AEG contract? Leonard Rowe says that even if Michael had filed for bankruptcy, if his liabilities were greater than his assets, he would have lost his entire fortune to AEG. Personally, I don’t think that is true. Michael could have cancelled the concerts, because he was covered by the cancellation policy, under specific terms. But the problem with cancelling was that, after years of attack by the media, Michael’s professional image was already badly damaged, and I believe that cancelling the concerts would have destroyed him. Michael would have walked away with no money to show for months of preparation, or even made a loss.
There is another large flaw in Rowe’s assumptions. He assumes that all Michael’s assets were part of his estate, and therefore AEG could force Michael into bankruptcy in order to get hold of the assets. But I have done some research and found that Michael’s major assets were all in bankruptcy remote trusts, which fall outside of the estate. Once in a trust, the assets no longer belong to Michael Jackson, and Michael cannot be forced to hand them over to creditors. I don’t know if AEG were aware of this, but Michael surely was.
Leonard says in his book that the AEG contract was despicable, and that it wouldn’t have happened on his watch. He claims the reason he was fired was that Randy Phillips was afraid he would expose the nature of the contract. Leonard has a letter showing that Michael wanted him to oversee the finances of the O2 shows. This was 25th March 2009, 3 months AFTER the contract was signed. So why did Leonard not get hold of the contract and start addressing his concerns to Michael? If he was overseeing the O2 finances, surely the starting point would be to understand the contract? Without understanding that, how could he understand Michael’s finances? He says he had found out about AEGs ticket scalping and brought it up at a meeting with AEG in May. So why did Leonard do nothing about the contract between being hired in March and May? Well, perhaps Michael didn’t want Leonard to have anything to do with the concert finances. Perhaps the 15 May meeting was about the problems with the concert scheduling? Perhaps Michael realised that Leonard wasn’t able to negotiate effectively with AEG, and so replaced him with Frank DiLeo?
Was the AEG contract good or bad? Financially, I think the AEG contract was good for Michael. AEG don’t seem to be profiting hugely at Michael’s expense.
But I do think Michael had problems with AEG, and I think those problems were to do with mounting the concerts. I have heard rumblings that the costume designer, the choreographer and the producer were planning the show without Michael’s input. Michael didn’t have the control he had had over his other concerts. This must have added to the huge pressure already on Michael, who as a solo artist, was the only person who could oversee the music, the songs and the choreography, and who in addition had to prepare his own performance. I also believe that some of the people working on This Is It, who had worked with Michael before, knew that he was not well in the last few weeks. I think they are afraid to speak the truth for fear of being landed with a wrongful death lawsuit, or of being blackballed. I think that explains the inconsistencies in the stories these people have told in interviews since June 25 2009, and is why so many people have lied about so many things. I think the Jackson family know, hence the AEG lawsuit.
