As the startling revelations about his extraordinary life continue, when it came to money, Jacko ignored the simplest of rules -- he spent more than he earned.
Michael Jackson's life was a series of extreme highs and wrenching lows.
He had the best-selling record of all time (Thriller sold more than 104 million copies), yet he narrowly escaped foreclosure on the vast Neverland ranch funded by his string of hits.
He showed a Midas touch in 1985 by shrewdly outbidding Paul McCartney for a catalogue of royalty-rich Beatles songs. Then a decade later, according to Reuters, he was forced to merge ATV with Sony's song library and sell its music publishing rights to raise some much-needed cash. And when that money was spent, he put up his share of the ATV assets as collateral in exchange for $200 million in loans from Bank of America.
With Jackson's sudden death last week, the billion-dollar boy king's musical contributions end, but, sadly, his legacy of debt will live on.
Comeback, Unplugged
At the time of his death Jackson was readying for a 50-concert stint in London -- a sold-out extravaganza that would reportedly inject more than $50 million into his bone-dry bank account. Various media reports say that he owed between $400 million and $500 million.
Now ticketholders are left in the lurch and Jackson's heirs are stuck with a massive tab to pay. How his IOUs will be repaid is already up for speculation. Right on cue, just hours after Jackson's death, questions surfaced about the will: Does it exist? Is it up-to-date? Who gets what and how much (if anything)?
Jackson's messy state of financial affairs should come as no surprise to anyone with just a passing familiarity with the singer's strange life trajectory.
Running Up A Tab in La-La Land
The details of Jackson's financial woes were made public during a 2005 trial for child molestation charges (of which he was acquitted) where a forensic accountant testified that the singer suffered from a common money malady: Overspendingitus, also known as "spending more money than you make."
According to the accountant's testimony, Jackson blew through $20 to $30 million more per year than he brought in.
Lavish shopping sprees and big-ticket lawn-care bills weren't the only reason Jackson was drowning in debt. His unpaid bills and unfulfilled deals brought on a constant stream of lawsuits -- nearly 20 -- from managers, lawyers, producers, financial advisors, and even a Bahraini sheik.
Publicity appeared to have little impact in his overindulgent ways. Last March, Neverland was nearly nevermore. The bank threatened to foreclose the property until a billionaire real estate investment banking pal stepped in to bail him out.
The lesson? Evidently, it's not how much you owe, but who you know.
Debt: Celebrity Destiny?
Perhaps Jackson's financial implosion was inevitable: celebrity investment blunders certainly appear to be par for the course.
The list of famous folks turned financial train wrecks is long and illustrious (Mark Twain, Mike Tyson, Billy Joel, M.C. Hammer). Yet so many of the high-and-mighty fall in the most pedestrian ways -- bad investments, brutal divorce, costly illness, and simply spending more than they earn. Hardly a spectacle to be had… until Michael.
But should we mere mortals really be so smug? Sure, we're not leveraging our Beatles catalogue or calling in favours from billionaire bankers. But our collective behaviour isn't that different from Michael's; we live on borrowed pounds, rely on leverage, and push the limits of plastic. And we, too, eventually have to pay up.
And we may even bear some of the blame for the fate of our icons, a point made eloquently by The Atlantic's Andrew Sullivan. In a brief tribute to Jackson, he writes: "I grieve for him; but I also grieve for the culture that created and destroyed him. That culture is ours and it is a lethal and brutal one: with fame and celebrity as its core values, with money as its sole motive, it chewed this child up and spat him out."
More on the economy and the markets:
> Are you spending more than you earn? Addicted to plastic? Check out the very popular Dealing With Debt discussion board.
> A version of this article was originally published on Fool.com. It has been updated by Bruce Jackson, who is not related to Michael, but is a member of his very own Jackson 5 family.
