http://www.nytimes.com/2006/05/14/business/yourmoney/14michael.html May 14, 2006 What Happened to the Fortune Michael Jackson Made? By TIMOTHY L. O'BRIEN This article was reported by Jeff Leeds, Andrew Ross Sorkin and Timothy L. O'Brien and written by Mr. O'Brien. 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. Sony was worried because Mr. Jackson was the company's partner in a lucrative music publishing business that included songs by the Beatles and other musicians. If Mr. Jackson became insolvent, his 50 percent share of that $1 billion business would be up for grabs to the highest bidder, leaving Sony to confront the uncomfortable possibility that it would be forced into a new, unpredictable partnership not of its own choosing. 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. 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 â still swamped in debt, with his musical career in stasis and his personal life limned by scandal â 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. Given how precarious Mr. Jackson's financial situation appears to be, it is unclear how long he will be able to retain his remaining stake in his prized music catalog. A reckoning appears near, and Mr. Jackson's ability to hold onto his fortune has proven to be as fleeting as stardom itself. The arc of Mr. Jackson's career, and his management of his business and financial affairs, tracks some of the timeworn truisms about the realities of the entertainment industry and those who inhabit its upper tiers: a child star unwittingly beholden to others who control his bank account; a more mature adult who is savvy about packaging and marketing himself but who grows increasingly undisciplined about his spending; and, finally, a reclusive caricature locked inside a financial and emotional fantasyland of his own making. For those without access to Mr. Jackson's personal accounts, assessing exactly how much money has passed through his hands over a career that spans decades is impossible. Sales of his recordings through Sony's music unit have generated more than $300 million in royalties for Mr. Jackson since the early 1980's, according to three individuals with direct knowledge of the singer's business affairs. Revenues from concerts and music publishing â including the creation of a venture with Sony that controls the Beatles catalog â as well as from endorsements, merchandising and music videos added, perhaps, $400 million more to that amount, these people believe. WHATEVER portion of those earnings actually ended up in Mr. Jackson's wallet is also difficult to assess because it would have to account for hefty costs like recording and production expenses, taxes and the like that would have reduced income from his business endeavors. Mr. Jackson could not be reached for comment. "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. "There was no planning in terms of allocations of how much he should spend. As a businessman, you can forecast your spending for the next six months to a year. For Michael, it was whatever he wanted at the time he wanted. "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."