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Friday, June 26, 2009

Michael Jackson's death hits tour promoter, ticket holders

LONDON (Reuters) - Michael Jackson's sudden death could prove a major blow to AEG Live, promoter of his eagerly awaited run of 50 London concerts, as well as to fans who paid well over the odds to get hold of coveted tickets.

The residency at the O2 Arena had been due to begin on July 13, and organizers have yet to decide exactly how they handle refunding tickets bought directly from themselves or authorized dealers, not to mention tickets bought from unauthorized dealers, online auction sites and ticket touts.

AEG Live's British website issued a brief statement on Jackson's death and added: "A further announcement for ticket holders will be made in due course."

Paying back the face value of some of the estimated 750,000 tickets sold is unlikely to be AEG Live's only headache.

The company is reported to have invested $20-30 million on the production already, not including any advance to Jackson.

And the O2 Arena, which appears on AEG's list of sites it owns or operates, is now faced with 50 empty nights, some of which it will struggle to fill at such short notice.

AEG Live's financial exposure will depend partly on how well insured it was for the 50-concert run.

According to industry experts, the concert promoter, a subsidiary of Anschutz Entertainment Group, initially found demand among insurers when the concerts were announced in March.

"I think what happened was that when AEG Live's broker started going to the market to cover the original 10 dates, the appetite was there," said Jonathan Swift, editor of the specialist Post publication.

"But when the tour started escalating into more dates, people were not so keen."


Doubts were voiced in March about Jackson's ability to perform a long residency amid concerns over his health, and they persisted until his sudden death Thursday.

In March, AEG Live chief executive Randy Phillips was quoted by the Telegraph newspaper as saying the company would be prepared to self-insure.

At the time of the announcement, he told Reuters that Jackson had passed a four-and-a-half hour physical examination by independent doctors. He also said Jackson could gross "well over $400 million" under a long-term deal with AEG.

Media reports have estimated AEG Live's potential liability from the concerts at up to 300 million pounds, although company representatives in Europe could not be reached for comment.

A spokesman for Lloyd's, the world's leading insurance market, said: "We can confirm that some insurance for Michael Jackson's concerts has been placed in the Lloyd's market, but any losses are not likely to be significant."

Music industry publication Billboard reported that Jackson's cause of death could play a part in AEG's exposure.

Quoting an entertainment insurance industry insider, it said that if the singer died from a drug overdose or pre-existing condition, "the producer could be on the hook for any loss."

But if Jackson's contract stated he would return his advance in the event of not performing, the company "could end up in court with a long line of other Jackson creditors."

As for ticket holders, online exchange Seatwave said customers would get a refund for the O2 shows. People who bought from unauthorized sellers may not be covered, added experts.

The official face value of tickets to see Jackson was advertised at 50-75 pounds ($83-124), but a pair of "VIP" passes to the opening show was offered on eBay for 16,000 pounds.

Michael Jackson's death hits tour promoter, ticket holders [via]

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