The 2006 “New York Time” Stream Of Drivel On Michael Jackson Finance.
The inaccuracy and the falsehood of a New York Time article related Michael Jackson financial crisis in 2006 before the public eyes, compared to what actually was the real situation behind closed doors.
After the short resume of the events occurred in order to obtain the refinancing I would like to bring your attention to the news spread in May 2006 by a proclaimed authoritative source: The New York Time. To be duly noted that this particular article, it is still considered a sort of reliable source by many. I call bullshit on them!
“Bullshit is language, statistical figures, data graphics, and other forms of presentation intended to persuade by impressing and overwhelming a reader or listener, with a blatant disregard for truth and logical coherence. It’s an open question whether the term bullshit also refers to false claims that arise from innocent mistakes. Whether or not that usage is appropriate, it feels that the verb phrase calling bullshit definitely applies to falsehoods irrespective of the intentions of the author or speaker”.
Why such strong terminology? Why NOT! Media use all kind of insults against Michael Jackson, so I guess I can do the same. Let’s debunk the most evident lies in the crappy article:100% guaranteed pure bullshit: “SEATED in a $9,000-a-night luxury suite in the sail-shaped Burj Al Arab hotel in Dubai, Michael Jackson played the role of a wealthy pop star as he met with two senior executives of the Sony Corporation last December. From the opulent setting to Mr. Jackson’s retinue of advisers, there was little indication that Sony’s troops were paying a visit because they were concerned that he was teetering on the brink of bankruptcy proceedings”.
What happened in real life: Michael Jackson was in Bahrain in December 2005. There are plenty of media reports of Michael shopping at Ashraf’s Department Store the Panasonic Store in Manama. And he invited the Cascio and Lester families to spend the holidays with him in Bahrain. Then he traveled to Europe in mid-January.
100% guaranteed pure bullshit: “With the waters of the Persian Gulf and a teeming, prosperous emirate splayed out far beneath them, the group got down to business. According to those who attended the meeting and requested anonymity because confidential financial matters were discussed, Mr. Jackson was pensive and cooperative, seemingly well aware of the gravity of his situation despite the grandeur of his surroundings. He only chirped up occasionally to remark on what a wonderful investment the catalog had been”.
LOL: I cannot avoid noticing the potential “fictions” skills of the author of this article. From the landscapes description to the brief summary of the life and career of Michael Jackson in between.
SONY PORTRAYED AS SERIOUS AND THOUGHTFUL COMPANY
High Level of bullshit: After listening to Mr. Jackson, Robert S. Wiesenthal, a senior Sony executive, eventually proposed that Sony would help the singer find a bank to lend him more than $300 million to pay off his debts. In exchange, Mr. Jackson would possibly forfeit a portion of his half of the Beatles catalog. Just last month, Mr. Jackson — still swamped in debt, with his musical career in stasis and his personal life limned by scandal — agreed to that financial overhaul. It is likely to strip him of about half of his remaining stake in the catalog, which he has relied on as a financial lifeline for about a decade. According to executives involved in the restructuring talks, Mr. Jackson used the catalog, as well as copyrights to his own songs, as collateral for roughly $270 million in bank loans he took out to fund a spending spree that includes upkeep for his sprawling California ranch, Neverland, and other exotic luxuries.
What happened in real life: Sony didn’t help Michael Jackson to find a bank that would solve his problems. CitiGroup is leading global financial services company, with more than 200 million customers and does business in approximately 140 countries. Sony was and surely is one of Citigroup clients, as are Universal, EMI and hundred thousand of others. If Sony would have had wanted to help Michael Jackson to look for a good financial structure for his investments why they let Bank of America strangle him with such 20% interests rate per annum?
By the documents I have read I saw so much red tape to choke in. Actually, in the particular case of this refinancing, they had done their best to object and delay everything. The hope was to reach any technical default and put him into bankruptcy proceedings.
Sony was a bank co-guarantor of the principal amount of the loan, meaning that in case of MJ defaulting within the duration of the loan, they were obliged to pay back to the bank the principal amount of the loan, which was theoretically less than 25% of MJ 50% interests in the catalog. Sony guarantee cost to MJ 9 million per year. This clause was not a new addition to this loan. It was structured this way since the 1998 first loan with Bank of America. Paying back the loan principal amount would not have given to them automatically the ownership of a supposed 25%.
A bankruptcy procedure it’s much complicated than this. All the bank interests and the various fees would have had to be paid before the clearance of the titles involved in the loan. Not to count the settlements of all the accounting involved. Clearly, MJ would have been forced to sell the other portion to face and clear all the bank duties and that’s was exactly Sony game and hope.
Looking at Sony Corporation consolidated results for fiscal years 2005/06/07 and considering the disaster of the games and electronic divisions, in my opinion, Sony was pretty tied up financially to purchase all Michael Jackson valuable catalog. That’s why they tiptoed around and negotiated the conditions: the risks to find themselves in an open bid with other investors and not to be able to win the bid it was pretty real.
100% guaranteed pure bullshit: “To keep Mr. Jackson afloat, Sony arranged an extension with Fortress and brought in Citigroup and other potential lenders to arrange new financing at a lower rate. At a meeting in London on Valentine’s Day earlier this year, Citigroup offered Mr. Jackson a new loan with a 6 percent rate. Citigroup struck a deal because Mr. Jackson agreed to give Sony the right to buy half of Mr. Jackson’s 50 percent stake in the Beatles catalog at a future date for about $250 million, providing a backstop for Citigroup if Mr. Jackson defaulted”.
What happened in real life: Sony didn’t arrange an extension with Fortress. The request cames from Michael Jackson advisors. Fortress cleverly purchased the documents from Bank of America but made no refinancing to MJ. They didn’t even try to make a proposal at the time of the extension request. So, when they had to comply to this requirement, in order to have all the documents matching as per the Bank of America, Sony consequently had to amend the “put option” extending the date. That’s it.
Fortress and Sony were just waiting to dismantle the assets and put a spanner in the refinancing process. Citi Group was brought in the deal by Michael Jackson advisors. And because the offer was good and convenient compared to the high interests rate that Michael Jackson was subjected by Bank of America and Fortress, at the last moment and in order to avoid losing their control over MJ financial situation, they negotiated and accepted City Bank conditions and Fortress did the same. And Citigroup “did not strike the deal”, Fortress exercised the last offer right and kept the transaction in his books.
I cannot avoid saying countless of time, Sony had the usual “put option” that obliged them to refund the 300 million principal capital of the loan in case MJ would have had defaulted during the duration of the loan. This was the additional guarantee that was already on the Bank of America documents. We have nothing new even in here.
High Level of bullshit: “By the time Mr. Jackson finally met with the Sony executives in Dubai last December, his onerous interest payments had left him in a bind. Fortress Investment Group, a New York-based investment group that specializes in distressed debt, bought Mr. Jackson’s loans from Bank of America in 2003 after the singer missed some payments. It then began levying high-interest rates. Fortress, which did not respond to an interview request, threatened to call its loan on Dec. 20 last year because of Mr. Jackson’s delinquency. What especially concerned Mr. Jackson about that, said one person familiar with the talks, was that it was just five days before Christmas. To the amazement of others involved in the talks, Fortress then offered Mr. Jackson the same terms — a measure of how desirable the Beatles catalog has been and continues to be to the various financiers and advisers who have hovered around Mr. Jackson since he bought it two decades ago. By April, a final deal was in place. Citigroup ended up providing a $25 million mortgage on Neverland, most of which Mr. Jackson used to buy back a 5 percent stake in the catalog held by one of his early advisers, Mr. Branca”.
What happened in real life: The meeting was held at Sony Corporation offices in New York without Michael Jackson attendance. His middle eastern advisors went instead to discuss the matter and attempted to have Sony comply with their requests to sell them their 50% in Sony/ATV. And City bank didn’t finance the Neverland mortgage. (at least not officially). Sure they got paid for having structured the entire transaction.
The inaccuracy of the article is as obvious as bad taste. It is clear that the journalist has patched up random notes without even knowing what he was talking about. It provides a date of Fortress purchase 2003 when even the stones are aware that it occurred in May 2005. He describes an offer that had never happened, adding a bit of “Christmas fiction” (which it never hurts) and in the last few lines, he confuses names, banks, and percentages.
MICHAEL JACKSON PORTRAYED AS A SPENDING ECCENTRIC BRAT
High Level of bullshit: “I think that Michael never had any concept of fiscal responsibility or logical fiscal responsibility. He was an individual that had been overindulged by those that represented him or worked for him for all of his life,” said Alvin Malnik, a former financial adviser to Mr. Jackson and a former lawyer for Meyer Lansky, the late mob kingpin. “Millions of dollars annually were spent on plane charters, purchases of antiques and paintings,” Mr. Malnik continued. “If you want to take a trip to London, that’s one thing. If you want to continue that trip and have your entourage of 15 or 20 people go with you, it gets expensive.”
What happened in real life: As far as fiscal responsibility, when Michael Jackson was alive no news of issues with IRS gone public. It would have been all over the press if it would ever happen. I don’t know if the above is the real Alvin Malnik word, it was reported by the New York Time and then “pasted” on many others media. However, cause “he was an attentive trustee and always with an eye on the budget”, I put here a piece of testimony that shows Mr. Malnik traveling in charter flight at Michael Jackson expenses.
High Level of bullshit: “Documents indicate that by late 1998, Mr. Jackson had already taken out and depleted a $90 million bank loan and Mr. Lee arranged a new, $140 million loan from Bank of America that was collateralized by the Beatles catalog and used to pay off earlier debts. Just several months later, the $140 million had evaporated and Mr. Jackson, fresh off of his divorce settlement with Lisa Marie Presley, obtained another $30 million line of credit from Bank of America. Mr. Lee said in court papers that in late 2000 he raised the original $140 million bank loan to $200 million, using part of that loan to pay down the $30 million credit line, which had been entirely tapped.Although documents indicate that Mr. Lee brought at least two risky investment opportunities to Mr. Jackson, Mr. Lee still managed to castigate the performer in court papers for a lack of financial discipline in 1999 and 2000″.
What happened in real life: Mixing up insinuations of low outlets as if they were coming from the Reuters is really embarrassing for a newspaper of this magnitude, and giving for granted words of someone such Lee. Myung Ho Lee – a man who brought MJ to court claiming that on Sept. 14, 2001, in Los Angeles, Michael signed a piece of paper admitting that he owed him nearly $14 million. No lawyers present.
- ( I realize that this one sound so much similar to the Will signed on July 8, 2002, when Michael was in New York City shouting against Sony)
Jackson said in a sworn statement in court that he never signed an agreement promising Lee money. In another affidavit sworn by former Los Angeles County Sheriff Michael Laperruque and former MJ bodyguard who stated that he was with Jackson on Sept. 14 and that they were not in California.
MJ was in New York on the morning of Sept. 11, having just completed the second of his two-anniversary concerts. When he heard that the World Trade Center was under attack, Jackson and his collaborators and family rented a bus and got out of New York.
The case was already tossed due to Lee not having a regular California licence to act as manager but in order to persuade Michael to settle, Myung Ho Lee went to Maureen Orth of Vanity Fair inventing a story where allegedly Michael put a curse on Steven Spielberg in a voodoo bloodbath ritual and other bullshit of low level.
The insinuation of a need for money to settle his divorce is just as false as hilarious: Lisa Marie Presley and Michael Jackson divorced in 1996, not in 1998. According to the divorce papers, she renounced spontaneously to any sort of spouse support. They had no assets together (in terms of real estates or any other form of properties). The only contribution MJ was requested to pay was the formality allowing the change of Lisa Marie surname. (from Jackson-Presley to Presley again).
Michael Jackson also confirmed it while talking with Rabbi Shmuley: “she didn’t take a penny [when we got divorce] she didn’t want anything. She makes about a million dollars a year from Elvis memorabilia and selling all that stuff and she has her own thing. She is not her to take, you know”.
High Level of bullshit: “All the while, Mr. Jackson’s spending ramped up. As described by several of Mr. Jackson’s former associates, he routinely borrowed large sums of cash to pay for things he may not have been able to afford. Marc Schaffel, who formerly served as an adviser on Mr. Jackson’s television projects, alleges in a lawsuit scheduled for trial next month that Mr. Jackson failed to reimburse him for outlays of more than $2.2 million, much of it in cash”.
What happened in real life: Schaffel mislead the media telling he had rights to a charity record when Michael unequivocally stated that he was the composer of the song and the rights belong to him. Shaffel collected $900,000 from a company that was owing money to Michael Jackson. Schaffel issued 18 backdated checks totaling $784,000 in the days after being fired by the MJ.
Schaffel was named as a co-conspirator against Michael in the 2005 child abuse. A copy of the indictment claimed that “MJ unlawfully and lewdly committed a lewd and lascivious act upon and with the body and certain parts and members thereof of John Doe, a child under the age of fourteen years, with the intent of arousing, appealing to, and gratifying the lust, passions, and sexual desires of the said defendant and the said child.” How can be possible that a so-called serious newspaper adds as valid testimony such scumbag?
THE ONLY DECENT OBSERVATION
New York Time: “It’s possible that Mr. Jackson’s biggest costs may have shifted in early 2000 away from his shopping sprees to simply shouldering enormous monthly interest payments on his debt. According to one executive involved in his affairs, Mr. Jackson was making monthly payments of about $4.5 million in 2005 on $270 million in debt. That works out to an annual interest rate of about 20 percent, a toll more familiar in the worlds of credit cards, subprime lending and loan sharks and not commonly encountered by wealthy people with substantial assets. But Mr. Jackson’s wildly errant spending had forced him to confront harsher realities”.
By the tone of this article it sounds like the author’s making fun about the troubles of his crazy neighbor having to deal with the home mortgage or the unpaid leasing installments, not about the owner of high profile companies who potentially – with or without 200 million bank debt – could still afford to buy him, all his family, his whole genealogy and then put them all on a barge in the waters off the coast of Lebanon without them even realizing of the sudden trip.
The apparent lack of respect smells of latent racism. However, it surely comes from a bonus dedicated to promoting a “brand” of a good client such Sony dragging down Michael Jackson reputation ( basically he was just another performer). An ordinary marketing/ advertising package plan. A very cruel plan for who experienced it.
- Inflate prices, then screw the Artists
- Manipulate the Charts to make a song look like a Hit
- Straight up pay to get their song on the Radio
- Reduce sound quality for audience to perceive a song as “Louder”
The Michael Jackson Tapes: A Tragic Icon Reveals His Soul in Intimate Conversation. By Rabbi Shmuley Boteach