After $20M Court Settlement, Michael Jackson Looks to Get Back to Business

King of Pop's Commercial Marketing Interests Take a Big Hit

By Published on .

Michael Jackson last week moved to shore up his shaky business empire by first resolving his personal problems.

The pop superstar last week paid an out-of-court settlement, thought to be in the $20 million range, to the teen-age boy he was accused of molesting. Rather than endure a lengthy, highly publicized trial, Mr. Jackson wanted to put the experience behind him so that he can "move his career forward to even greater heights," said Johnnie Cochran, Mr. Jackson's attorney, in a statement.

During the six months that child molestation charges have been swirling around the singer, Mr. Jackson's career has been unraveling.

In November, he canceled his "Dangerous" world tour to seek treatment for an addiction to prescription painkillers he had been taking, in part, because of the stress brought on by the allegations against him.

The tour cancellation also effectively voided Mr. Jackson's only commercial endorsement contract, a $7 million tour sponsorship deal with Pepsi-Cola International.

But Mr. Jackson's problems still caused a public relations headache for Pepsi, which hasn't used him in U.S. ads since 1988. Pepsi is repeatedly linked with the singer in news reports.

A Pepsi spokesman last week reiterated the company's position that when the tour ended, there was nothing more for the cola giant to promote.

"Beyond that, we're not speculating" on any future relationship with Mr. Jackson, he said.

Also in the fall, Sony Corp.'s Columbia Pictures quietly ended a development deal with Mr. Jackson's Nation Films, significantly paring back his overall contract with the consumer electronics and entertainment giant.

Mr. Jackson in 1991 became the first performer to sign a long-term deal with Sony Software Corp., bridging the marketing giant's film entertainment and music divisions. At the time, Sony estimated the relationship would return as much as $1 billion in revenues to the company.

The estimated $50 million to $60 million contract is believed to pay Mr. Jackson as he produces projects, so Sony is not losing money.

But so far, the deal has produced more hype than anything else. Mr. Jackson's Nation Records has yet to cultivate any new musical talent for Sony, and his Nation Films produced nothing while at Columbia.

Mr. Jackson's only album since the deal was signed is "Dangerous," produced under his former Sony contract.

Michael Jackson Productions, an independent film company started by Mr. Jackson last year to produce films with positive and uplifting themes, also has yet to produce a movie.

"This is a lot tougher on Sony" than on Pepsi, said one marketing executive. But "if he continues to be successful, they stand to make a lot of money."

Sony Music continues to stand by Mr. Jackson, who has six more albums to produce under this current contract, and is working with powerful Creative Artists Agency on future marketing plans for Mr. Jackson.

Mr. Jackson's next album, on Sony's Epic Records label, is scheduled to be a greatest hits album released later this year.

And while his decision to settle with his accuser out of court was interpreted as a sign of guilt by some, it probably won't stall his music career.

A national USA Today/Cable News Network/Gallup poll conducted last week found that 47% of survey respondents thought Mr. Jackson probably or certainly molested the boy. Fifty-five percent of 628 people polled said settling the suit out of court made them more likely to believe the singing star is guilty.

But at the same time, 69% of those surveyed thought Mr. Jackson should continue with his music career.

In this article:
Most Popular