Michael Jackson, Inc.

by Zack O'Malley Greenburg

  He decided to make the appearance on one condition: that from then onward, the network’s executives would make sure that their taste-making video DJs would refer to him only as the King of Pop.

  “They agreed, and then the name stuck,” Branca recalls. “Everybody called him the King of Pop. . . . It was part of Michael’s genius to recognize [good branding] when it was suggested to him.”8

  Jackson’s success continued on the publishing side as well. One day Branca got a call from Les Bider, the head of Warner/Chappell Music, which was then administering his Mijac catalogue. A Warner employee had forgotten to file the paperwork needed to retain the US copyright to one of the songs Jackson owned.

  “We fucked up,” Bider began.

  “Yeah, you did, Les.”

  “We’ll write him a check.”

  “He doesn’t need money.”

  “Well, what am I going to do?”

  “Les, the only way out of this—I won’t tell him—is to sell him [other] copyrights at a good price.”

  Branca then convinced Bider to send over a computer printout of all the songs in Warner’s catalogue, and picked out a group of the best, reiterating that Jackson might be pacified if he were given the copyrights at a discounted price. Bider agreed, leaving Branca to clear the decision with his client.

  “Michael,” Branca began, “I’ve got some bad news for you.”

  He then explained that Warner/Chappell had lost the US copyright to one of Jackson’s songs.

  “Branca, how could they do that!”

  “But Michael, okay, listen, they want to offer you money.”

  “I don’t want [that]!”

  “Michael, hold on, hold on, I came up with this idea,” said Branca. “I think I might be able to get them to sell you [some songs] at a really good price, not market value.”

  “Like what?”

  Branca listed the songs.

  “Close that deal.”

  Between that move and additional purchases Branca made around the same time, Jackson added hits including “When a Man Loves a Woman” by Percy Sledge, “Great Balls of Fire” by Jerry Lee Lewis, “Love Train” by the O’Jays, and “What’d I Say” by Ray Charles to his collection. He usually had a very specific motivation for wanting to buy certain copyrights, and these all fit the bill: “He wanted to cover those songs,” recalls Bider. “That’s smart business.”9

  * * *

  In 1988, Michael Jackson earned $125 million, a sum that would stand as the highest annual total of his life (and one that’s even more impressive when viewed as an inflation-adjusted $247 million). His bottom line was bolstered by a rapidly broadening business portfolio. In addition to recorded music, touring, motion pictures, clothing, real estate, and music publishing, he launched a trio of products that bore the name of his most famous dance move.

  There was the film Moonwalker, which costarred Joe Pesci and tied together a string of Jackson’s music videos from Bad. The budget of $22 million was more or less covered by an advance from production company Lorimar,10 and the flick went on to sell more than 800,000 units in the US.11

  Then there was the Sega Genesis video game of the same name, also starring Jackson, this time in animated form. Through connections in Japan, he was able to get an introduction to the executives at Sega;12 the company cooked up a popular side-scroller where the Jackson character runs around rescuing children, vanquishing enemies with a toss of his hat (or by dancing them to death).

  Finally, there was the memoir Moonwalk—edited by Jackie Kennedy Onassis and Shaye Areheart. The latter, who ended up writing parts of the book, eventually flew to Australia to take a draft to Jackson for approval during the Bad Tour. For two weeks, she’d sit at the edge of his bed every night and read him the manuscript because he wanted to hear it after marking up several drafts; he’d dictate changes. Just as he did with the “Thriller” video, however, he got cold feet at the last minute.13

  “He didn’t have a problem with the book per se,” says Areheart. “It wasn’t that he thought it could have been better, that wasn’t why. He just got worried about having it out.” Adds Branca: “He didn’t want it out because he didn’t want to be overexposed.”14

  Ironically, the book’s publisher had initially worried that it didn’t reveal enough. But a call from the publisher, along with a bit of massaging from Areheart and Branca, ultimately convinced Jackson to change his mind and allow the book to be released without any reworking.

  When Moonwalk eventually hit stores in February 1988, it zoomed to the top of the New York Times bestseller list. And indeed, the main criticism was that it didn’t reveal enough—as the Times itself opined, the book “could be dismissed as an assiduously unrevealing, frequently tedious document. Ultimately, however, these are precisely the qualities that make it fascinating.”15

  Thanks to close associates who were willing to challenge him, Jackson had narrowly avoided dashing a worthwhile project. He couldn’t have been happier with the result.

  “He thought the book was great,” says Areheart. “Michael loved it.”16

  * * *

  Hollywood couldn’t have designed two men more suited to be rivals than David Geffen, chief of his eponymous record label, and Walter Yetnikoff, who ran Sony Music.

  For much of the 1980s, Yetnikoff was the unreformed Tony Stark (an arrogant, skirt-chasing boozehound who happened to be incredibly intelligent) to Geffen’s Obadiah Stane (a brilliant operator who played business like chess and always seemed to know where to find an opponent’s weaknesses). Yetnikoff also enjoyed tweaking his foe.

  “[Geffen] used to say, ‘You should have your eyes done,’ ” Yetnikoff recalls. “I’d say, ‘David, I’m not a fucking fairy like you are.’ We were very friendly at one time.”17

  For Geffen, the idea of luring the King of Pop to his label while spiting his rival seems to have been enormously appealing. Jackson liked having one of Hollywood’s richest men on his investment committee for the free advice, but also for the help he could lend to Jackson’s movie career. The mogul’s Geffen Company had produced a string of hits in the 1980s including Risky Business, Little Shop of Horrors, and Beetlejuice.

  Geffen declined multiple requests for an interview for this book, both through an assistant18 and directly (“I don’t want to talk about MJ,” he wrote in an email. “All too sad”).19 His influence on Jackson’s career, however, is undeniable. Starting in the mid-1980s, he served as one of the singer’s advisors and even signed him to a movie development deal.20

  So when the billionaire called to ask for a song to use on the soundtrack of the Tom Cruise auto-racing flick Days of Thunder, it seemed fitting that Jackson agreed to record the Beatles’  “Come Together,” to which he already owned the publishing rights (supporting Les Bider’s point that Jackson often acquired songs with the intention of recording them himself).

  But Jackson became concerned that contributing to the soundtrack might amount to overexposure and decided he wanted out. He called Yetnikoff and asked what he should do.

  “Tell Geffen he can’t use it,” the CBS chief suggested.21

  “Well, I already told him he could.”

  “Well, call him and tell him he can’t.”

  “No, you tell him.”

  Yetnikoff wasn’t terribly enthused about the plan. But this time, he figured, the task was at least possible. That wasn’t the case a few years earlier when Jackson had called Yetnikoff the night before the Grammys and demanded he find a way to get Quincy Jones’s name removed from nominations for the production of Thriller. The two incidents were indicative of a larger pattern where Jackson would agree to something, change his mind, and then rely on Branca or Yetnikoff to get him out of the deal.

  The next time Geffen called, Yetnikoff delivered the news: “You can’t use that song.”

  “What, are you crazy?” Geffen fumed. “Michael told us we could.”

  “He doesn’t have the authority to do that.”

  “I
wouldn’t do that to you.”

  “I have to protect his career as an artist . . . you can’t use it.”

  Geffen appealed to Branca, but received the same response. The Days of Thunder soundtrack made its debut in June 1990 with nothing from Jackson on its track list; despite contributions from Guns n’ Roses, Cher, and Elton John, it never climbed higher than number 27 on the Billboard album chart.22 That was a decent performance for a soundtrack, but one that could well have been improved by a contribution from Jackson.

  * * *

  As intrigue engulfed the executive ranks of Michael Jackson, Inc., the singer found comfort at his Neverland hideaway. Frequent guests included family members (his brothers and their families), friends (Elizabeth Taylor), and disadvantaged children (busloads of inner-city youths from Los Angeles in need of a bucolic afternoon retreat23).

  Jackson particularly enjoyed acting as a mentor. One day, his brother Jackie showed up at Neverland with an eight-year-old boy named Donny B. Lord, whom he’d been mentoring in hopes of managing him through a music career of his own (he even called the youngster “Little Michael” on account of his precocious dancing skills and vocal abilities). Now in his mid-thirties, Lord remembers waiting in the library with Jackie to meet Michael.

  “He opened up the door and swung his arms out like a king,” says Lord. “And . . . I just thought, ‘Wow, he knew who the hell he was’—‘I’m Michael Jackson, I’m the King of Pop, I’m the greatest entertainer in the world, and you know what, I have the right to open up my own library door and just do it, arms open, like I have arrived.’ ”24

  Most of all, Lord remembers the advice Jackson gave him as an aspiring—albeit eight-year-old—entertainer. Instead of lecturing Lord about how to write a song or how to capture an audience, he began with business.

  “The value comes from when you own [your work],” Jackson explained, detailing a philosophy that he applied increasingly to physical goods as well as intellectual property. “It’s yours. It’s yours forever. And you can give it to your children, you can give it to your family. That’s how you build your wealth.”

  With Michael’s words of wisdom and Jackie’s continued guidance, Lord went on to become a musician with his own small entertainment company. But Jackson family visits to Neverland didn’t always have happy endings. Less than five years after completing the Victory Tour, Jackson’s father pestered him for months to join his brothers for four shows in South Korea after being offered millions by operatives of the late Sun Myung Moon, a popular reverend (or cult leader, depending on your perspective). When the shows did not materialize, Moon’s organization sued the family for millions (Jackson’s parents filed for bankruptcy protection in 199925).

  There were plenty of other schemes afoot; Joe Jackson even tried to convince his son to open a vineyard at Neverland. “I wanted to turn it into some type of an orchard where they raise grapes and things of that sort,” says the elder Jackson. “Because that area is real good for that.”26

  Michael never acted on that advice, though he didn’t need grapes to financially justify Neverland’s purchase. The property was appraised at $50 million in 2002, while recent estimates have placed its value much higher. Southern California realtor Josh Altman, who’s sold numerous stars’ homes, believes Neverland could fetch $75 million to $85 million on the open market—perhaps more if a foreign billionaire decided to acquire it as a trophy. Says Altman: “There are only so many mega-properties.”27

  Chapter 11

  * * *

  NEW SHOES

  50 Cent isn’t known for being giddy.

  Born Curtis Jackson (no relation to Michael), the Queens native put himself on the hip-hop map with the 1999 hit “How to Rob,” in which he outlines his plans to relieve stars from Jay Z to Will Smith of their cash. He rose to international superstardom after releasing Get Rich or Die Tryin’ in 2003; on the album’s cover, his face is contorted into a fierce scowl, perhaps a consequence of getting shot nine times at close range a few years earlier.

  These days, he’s more concerned with entrepreneurial ventures (though he still keeps a framed photo of a pistol in his office, behind a gold placard that reads “CJ Enterprises”). He took home $100 million on a single deal in 2008—payment for a stake he’d taken in vitaminwater parent Glacéau in lieu of a one-off endorsement fee—when Coca-Cola bought the beverage company for $4.1 billion. He’s launched his own video games, record label, sneakers, clothes, headphones, and energy shots.

  Yet it still comes as something of a surprise when, a few minutes into an interview in his Manhattan penthouse office, he jumps up from his plush leather chair and begins bouncing around the room, gesturing with cartoonishly muscled forearms and smiling uncontrollably. The topic responsible for his good humor? Michael Jackson, the man whose early shoe and clothing lines helped open the door for the brand extensions of the next generation of entertainers, 50 Cent included.

  “When he did ‘Billie Jean,’ I had that poster on my wall,” says the rapper. “Like, he could have sold me penny loafers . . . the showmanship that was involved in his presentation was so much more advanced than the things that we’d seen in the past.”1

  * * *

  Long before 50 Cent created his G-Unit sneaker for Reebok or Jay Z launched his S. Carter line, Nike had MJ.

  To be clear, those initials don’t refer to the King of Pop, but Michael Jordan. In 1987, the Chicago Bulls legend became the first entertainer to be paid on a scale commensurate with today’s stars when he inked a seven-year, $18 million contract with Nike to launch his Air Jordan brand. The agreement marked the apotheosis of the rapidly growing athlete shoe deal, which was virtually nonexistent just ten years earlier.2

  In the 1970s, Nike’s first signing was University of Oregon track star Steve Prefontaine. He agreed to wear the fledgling company’s shoes for a then-whopping $5,000. The scales quickly shifted when Adidas signed Kareem Abdul-Jabbar to a $100,000 deal in 1982; shortly thereafter, New Balance spent $1.2 million to lock up fellow basketball star James Worthy before Nike upped the stakes by another order of magnitude with Jordan; the company’s revenues soared from $10 million to just shy of $1 billion over that span.

  Athletes were finally getting paid to wear shoes, but musicians didn’t begin to break into the market until pioneering hip-hop act Run-D.M.C. released the song “My Adidas,” an initially uncompensated ode to shell-toes. In 1986—after a handful of Adidas executives showed up to a Madison Square Garden show and witnessed some twenty thousand onlookers raise their own sneakers toward the rafters at the behest of the rappers—Run-D.M.C. signed a deal worth more than $1 million.3

  By 1990, upstart sneaker purveyor LA Gear was desperately looking to grab a bigger piece of a multibillion-dollar market. So the company’s chief, Robert Greenberg, turned to cofounder Sandy Saemann and said, “Let’s get Michael Jackson.”4

  Saemann, a loquacious Californian who later resigned from the company after amassing millions in stock holdings—and now runs a high-end hot dog stand in Manhattan Beach—thought this was a bad idea. Even without a big-name endorser, he believed LA Gear had a shot at eating into its rivals’ domestic market share.

  The way he saw it, Michael Jackson’s image was still smarting from recent tabloid fiascoes and wouldn’t necessarily help sell sneakers in the United States. Greenberg saw things differently. Even if the singer couldn’t help with their domestic efforts, he was still huge overseas, as the Bad Tour had shown. If Jackson could sell over 4 million concert tickets—with more than half his tour dates occurring abroad—why couldn’t he move a million sneakers worldwide?

  Thus began the relationship between Jackson and LA Gear. When Greenberg and Saemann finally reached out to his camp, they found the singer was amenable to doing a deal as long as his financial conditions were met: $20 million. That surpassed even the seven-year, $18 million Nike deal signed by Michael Jordan in 1987 (though the basketball legend would earn far more after receiving a royalty on every Air Jor
dan shoe sold). But Jackson knew his worth, even when it came to sneakers.5

  “He wanted it to be the biggest deal known to man,” recalls Saemann. “He was very conscious of where the scale was. . . . That’s the side of him that nobody understands. He knew where he was. He wanted to be number one and he wanted to stay number one, he wanted to be the largest entertainer with the most deals.”

  During early conversations over the venture, Saemann and Greenberg told Jackson and Branca, who was negotiating the deal, that they wanted to launch the shoe abroad only. That way, they figured, it wouldn’t be such a gamble. But Jackson refused. If he was going to launch his own sneaker, it had to be the biggest and the best—bigger even than Jordan’s—and there was no way he’d settle for an overseas-only deal.

  LA Gear agreed, and Jackson accepted the offer of $20 million, about one-fifth of the company’s annual advertising budget, to help launch a line of co-branded sneakers that would be sold both in the US and around the world; he’d get half of that sum up front.6 The press release announcing the shoe would refer to him as the King of Pop, and his agreement with LA Gear would be described as “the largest entertainment endorsement ever made.”7

  In return, says Saemann, Jackson promised he’d shoot television commercials for LA Gear and wear the sneakers in the promotional materials for his upcoming album, Dangerous, which was supposedly almost finished. When Jackson showed up at a press conference in Los Angeles on August 6 to announce the agreement, it seemed a perfect match.