Michael Jackson was deeply in debt when he passed away in 2009, with court documents revealing he owed over $500 million to more than 65 creditors. His financial troubles were exacerbated by multiple lawsuits and creditor claims. However, his executors managed to renegotiate and restructure his debts, including a significant deal with Sony over music publishing rights, which helped to mitigate some of the financial losses.
A $750 million agreement allowed Sony to acquire Sony/ATV, a company that owned the rights to nearly 3 million songs, including those by John Lennon, Paul McCartney, David Bowie, and Taylor Swift.
Despite this major financial maneuver, Jackson’s estate continued to face substantial financial, tax, and legal challenges. A significant issue was a pending IRS decision from a 2021 court battle, which was preventing Jackson’s children from accessing funds from their trust until resolved.
The estate’s financial difficulties were compounded by a tax audit, which found that Jackson’s estate had undervalued its assets, resulting in a $700 million tax deficiency. Despite this, a spokesperson for the estate emphasized that Michael’s mother and children were well-supported, and the estate maintained a cooperative relationship with them.
Reports indicated that Sony Music further supported the estate by purchasing Jackson’s music catalog for at least $600 million.
Michael Jackson’s financial woes were largely attributed to his extravagant spending habits, as detailed by accountant William R. Ackerman during Jackson’s wrongful death trial in 2013. Jackson spent lavishly on charity, gifts, travel, art, and furniture. His extravagant lifestyle was also highlighted in a 2003 interview with Martin Bashir, where Jackson went on an extensive shopping spree.
In the months leading up to his death, Jackson’s financial situation was dire, with prosecutors during his sex abuse trial in March 2005 labeling him a “shopaholic” on the brink of bankruptcy. Despite these challenges, efforts by his estate have aimed to resolve the outstanding financial issues and ensure the well-being of his beneficiaries.