Will surge in Jackson sales erase $500 million in debt?


Michael Jackson's drug-related death left behind a financial wake. As I posted, estimates are that his assets are worth $1 billion and he owed about $500 million. But a surge in sales of Michael Jackson music and other memorabilia coupled with the abrupt end of his exorbitant living expenses could help erase part of his debt. So could a distress sale of Jackson's most valuable asset -- a 50 percent interest in Sony (SNE)/ATV, which includes 259 Beatles songs.

One industry expert estimates that the catalog is worth $1.5 billion -- putting Jackson's share at $750 million. If creditors -- such as Barclay's which lent Jackson $300 million and Bank of America (BAC) which lent him $200 million using that stake as collateral -- force Jackson's estate to sell that stake in the next 60 days and the sale price tops $1 billion in today's relatively weak music industry, those sale proceeds could pay off Jackson's $500 million in debt.

Meanwhile combining the burst in sales and collapse in expenses resulting from Jackson's passing, his estate could see a boost in cash flow as high as $100 million. Although it is unclear how much flows to his estate -- his music sales have spiked at Amazon.com (AMZN), Barnes & Noble (BKS) and Apple (AAPL) iTunes.