King of pop

The promoter of Michael Jackson's "This is It" tour, AEG Live, has said it will offer a full refund to all fans who were due to attend. When Jackson announced his plans back in March for 50 dates at London's O2 Arena in July, tens of thousands of fans snapped up every single ticket in record time. Over 750,000 were sold - with a total face value of around 60 million euros ($84 million).

But someone will have to foot the bill for all those lost revenues as ticket holders are offered refunds. Katherine Blackley, senior reporter at the magazine Reinsurance, said AEG did insure themselves against some of the risk and that it will be a big claim going to the insurers.

Back in March, AEG announced that they had secured cover for the first 10 concerts, Blackley said. This was reputedly worth 80 million pounds (90 million euros).

"So you can work out from that that the costs were fairly substantial," Blackley said. "The claims are likely to be fairly substantial, as well." She said claims estimates currently stood at around 100 million - a bill that will be picked up by the insurance companies.

"But they could be as high as 300 million," Blackley said. She said the Lloyds insurance market in London was used, and several companies in the British capital will now be taking a hit.

"It looks like there are at least six insurance companies and underwriting firms that have some risk here," Blackley said. "Some of them will have taken bigger risks than others."

Coping with the loss

Thousands of fans didn't buy tickets directly from promoter AEG or the O2. So that pulls more European companies into the mix. Some fans who bought tickets from other sellers may get their money back due to a separate insurance policy, bought by a company called Seatwave. It is a secondary ticket market in the UK and other European countries.

Seatwave said its policy covered ticket buyers who purchased tickets through the company's British and German Web sites. That's about 10,000 customers who paid between 250 and 300 pounds to see Jackson - which would add up to a total payout of between as much as 3 million pounds.

Concert promoter AEG is a US-based company. But London's O2 Arena operates out of the Docklands area of the city, employing thousands of local people. Now it has 50 nights without a booking, affecting its bars, restaurants, shops and other attractions. But the O2's chief executive David Campbell said they'll cope.

"People say you've got three months and there's nothing on," Campbell said. "That's not entirely true. There are plenty of other events."

Campbell said things could change at short notice, as well.

"If I go back a couple of years ago, it was less than three months that we put together the Led Zeppelin tribute so that can happen in a short period of time," Campbell said.

But he said the O2 would be interested in seeing the "This is It" tour become a tribute concert, or concerts, involving members of Jackson's family. It would certainly be a way to recover some of the lost ticket revenues.

"It's clearly early days but there's a lot of outcry from people saying there should be a tribute concert so if we could make that happen that would be good," Campbell said.

Jackson's death is benefiting others

For some European companies, Jackson's death has led to an opportunity to make money. Genaro Castaldo from British music and entertainment store HMV said sales of Jackson's back catalogue have gone through the roof.

According to Castaldo, there has been an 80-fold increase in the level of demand.

"People were coming in and were trying to get hold of albums, of course Thriller and Off the Wall," he said. "It's something that we see whenever a great artist dies or an icon dies."

He said it gave people the feeling of connecting with the moment in some way.

"Buying the CD or the DVD or even just coming in to the record store is sometimes the easiest way you can make that connection," Castaldo said.

There are also those benefitting who have no official connection to Jackson at all. Castaldo said if you're buying Michael Jackson merchandise right now, it's unlikely to be benefitting his estate.

"Michael's affairs were very complex and just trying to license images and rights - whether for t-shirts, posters or books - I believe was not a straightforward process," he said. "For that reason, there aren't that many items out there that people can buy, at least official ones."

He said had the O2 events taken place, there would have been a large selection of products available both at the venue and elsewhere.

"And that might still be the case, but for the time being, the main focus of people's interest is the music," Castaldo said.

Michael Jackson died heavily in debt and with his finances seemingly out of control. What's clear is that while his death has caused financial problems for some European companies linked to his comeback concerts, it's also provided huge opportunities for others.

Author: Olly Barratt in London (sac)
Editor: Rob Turner