Michael Jackson's Death Creates Problems For Tour Promoter AEG
Michael Jackson's planned 50-show run at London's O2 Arena "would have been the highest-grossing single concert engagement," but following the entertainer's death on Thursday, now it is a "major problem" for promoter AEG Live, according to Ray Waddell of BILLBOARD. More than $85M worth of tickets "have already been sold for the series of performances," set to begin July 13, and sources said that as much as $30M has "already been spent on production." Concert business execs estimated that AEG paid Jackson an advance of as much as" $10M. The advanced payment, "plus the production costs, would mean AEG stands to lose as much as" $40M if nonappearance insurance "isn't substantial enough to cover this contingency." A concert business exec said for AEG, "It's either horrible or really horrible." AEG's yearly financial results "may now depend on Jackson's cause of death." One entertainment insurance industry exec said that if Jackson "died from a drug overdose or a pre-existing condition," AEG "could be on the hook for any loss -- which would include any money already sunk into the production, as well as the considerable cost of refunding consumers for the 750,000 tickets already purchased." Even if AEG "had a policy, that doesn't mean Jackson's death, and the losses incurred, would be covered." Waddell noted AEG "may have to file a claim against Jackson's estate," and since Jackson has "hundreds of millions of dollars of debt, and a couple of multimillion-dollar lawsuits pending, the worth of the estate is very much in doubt" (BILLBOARD.com, 6/25).
TICKET REFUNDS: In London, Amar Singh writes AEG is "facing an insurance liability of up to" US$494M and a "financial black hole caused by 50 empty nights at London's O2 arena." Experts "predicted that refunding will be a 'messy, expensive' process." AEG and commercial partners, Ticketmaster and Viagogo, "will have to work out how to handle one of the biggest refunds ever" (London EVENING STANDARD, 6/26). Ticketmaster has a policy to "refund the face value of the ticket, plus the booking fee" (LONDON TIMES, 6/26).
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