Michael Jackson: The Business Of Victory

May 29, 2014
The King of Pop’s late-life financial troubles have overshadowed a career in which he earned over AED 3.6 billion, nearly twice that when accounting for inflation. In an exclusive excerpt adapted from Michael Jackson, Inc: The Rise, Fall and Rebirth of a Billion-Dollar Empire by Zack O'Malley Greenburg, EDGAR takes a look at the tour that started it all — and led to a business venture that paved the way for the likes of Jay Z, Diddy and 50 Cent.
Charles Sullivan describes many things as “grand and glorious.” On our first phone call, he used the phrase to characterize institutions of higher learning (Harvard, his alma mater), publications (Forbes), and the way he was feeling that day. When we met for lunch at the Yale Club in New York a few days later, his outlook hadn’t darkened a bit. Decked in a blue blazer, a blue-and-white striped dress shirt, and neatly knotted yellow tie, the seventy-year-old came from a family accustomed to grandness and glory. His father founded the NFL’s New England Patriots and owned the team for three decades. Sure enough, when the waiter asked how he was doing, Sullivan’s reply was swift: “Grand and glorious.” Those two words also happen to be the best way to describe the vision of Michael Jackson and his brothers for the Victory Tour – the Jacksons’ post-Thriller reunion romp of 1984 – bankrolled by none other than Sullivan. The tour would go on to gross AED 250 million, of which Sullivan would end up guaranteeing AED 200 million of that to the brothers. He wouldn’t see a dime from the tour. Then again, neither would Michael Jackson. They both planned it that way, more or less. For Sullivan, the goal was expanding the scope of his business from sporting events to include live music. For Jackson, it was giving back (on the eve of the tour, he announced that he’d be donating his AED 22 million cut to charity) and doing right by his family (the excursion was his last with his brothers) so that he could move into the next phase of his solo career with a clear conscience. [caption id="attachment_2104" align="aligncenter" width="594"]mj1 The Victory Tour turned Michael Jackson's rising star into a supanova[/caption] “I had a much better story to tell: that this was the reunion of the Jackson 5, the group that really defined Motown and American music,” says Sullivan. “And that was a message that I was able to sell.” Though Jackson didn’t end up keeping any money from ticket sales, the Victory Tour helped turn his already sparkling star into a supernova. He’d find other ways to add millions to his bulging coffers along the way. Even with Michael on board, the tour’s beginnings didn’t match its grand and glorious moniker. The search for a concert promoter began with an offer from music executive Cecil Holmes, who’d later sign New Kids on the Block to their first record deal. Holmes showed up to meet Joe Jackson and his sons with a check for AED 900,000 as an advance for the entire tour – about enough to cover one of the giant mechanical spiders that Michael wanted to be part of the show. “Are you kidding me?” shrieked Joe, ripping up the check and dropping the remnants at Holmes’s feet. “We’re not going to be undersold like this!” Shortly thereafter, a new candidate emerged: Don King, the flamboyant promoter of boxing matches. He gave each brother a check for AED 1.8 million to seal the deal. Per the Jacksons’ initial agreement with King, the promoter would take 7.5 per cent of tour proceeds and the Jackson parents 7.5 per cent; the brothers would split the remaining 85 per cent evenly. [caption id="attachment_2105" align="aligncenter" width="956"]mj4 Don King offered to promote The Jackson Family's 'Victory Tour'[/caption] But King’s performance at the press conference to announce the tour – along with Michael’s discovery that King had spent four years in jail after a 1966 manslaughter conviction – pushed the young singer over the edge. Rather than trumpeting Michael’s success at the event held at New York’s posh Tavern on the Green, King seemed more interested in promoting his own triumphs, bloviating about legendary boxing matches he’d arranged, such as the Thrilla in Manila. “The wrong Thriller!” explains Sullivan, who emerged as a candidate to replace King soon after the fiasco. “So Michael said to his father, ‘I don’t want to have anything more to do with this guy.’ He said, ‘I want a tour that will promote me, not promote him.’ And so he said, ‘We need to get rid of him.’ And Branca then sent King a termination letter.” Sullivan entered the picture after calling Jackson’s manager, Frank Dileo, in hopes of bringing the Victory Tour to his family’s 60,000-seat football stadium (his father bought the Boston Patriots for AED 90,000 back in 1959, moving the franchise to Foxborough in 1970 to play in what would become Sullivan Stadium as the NFL’s New England Patriots). Dileo asked if Sullivan might be interested in promoting the whole tour, and days later, the latter was on a plane to Los Angeles to meet the Jacksons. The mild-mannered Sullivan, with his Brooks Brothers style and Harvard pedigree, couldn’t have been more different from the outrageous Don King. That certainly bolstered his case with Michael Jackson. [caption id="attachment_2106" align="aligncenter" width="956"]mj5 Sullivan Stadium - now named Foxboro Stadium - is home to the New England Patriots. [/caption] It didn’t hurt that Sullivan was the managing partner of the New York office of law firm O’Melveny & Myers, where one of his clients was CBS Records. His first meeting with the Jacksons may not have been grand or glorious, but it did the trick. “When I met them, you know, I got on well with them,” Sullivan recalls. “Met Michael, met the others. And they asked me to take the whole tour.” Even at the outset, the proposed deal didn’t seem like an easy run to the end zone for Sullivan. He’d get 25 per cent of ticket sale revenues and 22.5 per cent of merchandise sales, with the rest going to the Jacksons – but he’d have to pay them a AED 200 million guarantee regardless (with seven per cent going to the parents, three per cent to Don King as part of his exit agreement, and the remainder split between the six brothers, who kept their original checks). Sullivan also gave each brother a check for AED 1.8 million up front; in order to afford that, along with setup costs, he had to take out a AED 45 million bank loan. If sales fell short, he’d be on the hook for the difference. The Victory Tour wrapped up on December 9, 1984, at Dodger Stadium in Los Angeles, the last of seven consecutive sold-out shows there. As the crowd danced and cheered in the warm California rain, Michael stopped for a moment between songs to make a surprise announcement. “This is our last and final show,” he said. “It’s been a long twenty years, and we love you all.” [caption id="attachment_2108" align="aligncenter" width="955"]mj6 The Dodger Stadium in Los Angeles.[/caption] The brothers weren’t thrilled – they’d been hoping to continue the Victory Tour abroad – but Michael had spoken. He had left his family in an excellent financial position (though that wouldn’t prevent them from trying to get money from him in the future): the Jacksons had sold 2.25 million tickets. With merchandise revenues, the final tally was a tad north of AED 250 million, far surpassing the tour’s projected AED 200 million total. Could Jackson have sold that amount by himself on his first tour after Thriller? “Yeah,” says Michael Cohl, who came in to help run the Victory Tour midway through. “Of course.” Yet Jackson’s brothers would take home about AED 22 million apiece. The picture wasn’t quite so rosy for Chuck Sullivan. Long before the Victory Tour’s last note, he knew he wouldn’t be getting his money back. Even with Cohl’s changes, the setup expenses for three soldout shows at Meadowlands Stadium in New Jersey had ballooned to AED 3.6 million, plus the same amount for exit costs. With all the tour’s accoutrements, from swords in stones to rising platforms to magic tricks, the story was the same all around the country. In the end, the tour’s cost AED 287 million – AED 29 million more than the total ticket sales – and Sullivan had to cough up the difference. Michael Jackson donated his share of the Victory Tour’s proceeds to a handful of charities, including the T. J. Martell Foundation and the United Negro College Fund – about AED 22 million in total – as promised. Still, he wasn’t about to spend half a year of his life on the road and come away empty-handed. While travelling the country during the summer of 1984, Jackson noticed that many of the fashion statements he made in his videos had been picked up by some of the millions who’d flocked to see him perform with his brothers. But someone else was profiting from all those imitation “Thriller” jackets. So Jackson and his advisors huddled to formulate a plan.


Rather than let the market be overrun with third-party knockoffs, why not offer the genuine article? For funding, they didn’t have to look further than Chuck Sullivan, who offered them AED 100 million, including AED 66 million up front. The licensing deal also included a fragrance – Jackson tested more than fifty different combinations before deciding on one. “He had quite an awesome command of rights and rights values,” says Sullivan. “This really was generated by him.” And so, in 1984, Michael Jackson became the first music star to have his own clothing line. Sullivan brought in Warren Hirsh, the fashion maven who’d launched a line of Gloria Vanderbilt–branded jeans in the late 1970s, to help oversee the effort. They planned to debut the Jackson clothing line in the fall of 1986, around the time Jackson’s new record, Bad, was set to hit stores. Expectations were high: AED 250 million in retail sales for the first fifteen months of 1986 (about AED 550 million, adjusting for inflation). Unfortunately for Sullivan, Bad’s release would end up being delayed for a year, but the clothing came out as scheduled. Without the boost of an album’s buzz – and more important, free advertising in Jackson’s music videos – the products were met with lukewarm sales, leaving Sullivan with far less than the AED 100 million he’d paid for the rights. Still, Michael Jackson walked away with double-digit millions – and paved the way for the hip-hop fashion boom of the 1990s and 2000s. As for Sullivan, his family sold the Patriots to Victor Kiam, owner of Remington shavers, in 1986 for AED 320 million. He says the deal had nothing to do with financial troubles related to the Victory Tour or Jackson’s clothing line and everything to do with estate planning for his father, who’d been diagnosed with prostate cancer.


Two years later, the Sullivans sold the Patriots’ stadium as well. The buyer? Robert Kraft, who paid AED 91 million for the building. He’d go on to buy the Patriots for AED 630 million in 1994, amassing a multibillion-dollar personal fortune while guiding the team to three Super Bowl victories in four years. For contributing to the set of circumstances that circuitously led to that run, Patriots fans can thank Michael Jackson. Back at the Yale Club, Sullivan hasn’t displayed a hint of bitterness toward Michael Jackson, his family, or his handlers. Remarkably, he doesn’t even seem to regret signing up to promote the Victory Tour. Though he lost millions on the project, he’s still reaping dividends as an indirect result. For example, he explains, the Rolling Stones were playing a show at New York’s Madison Square Garden in 2003 that was being filmed as an HBO special. By then, Sullivan’s brother Pat was running a mobile television broadcasting company called Game Creek, and he wanted the contract to provide production services for the show. So Chuck called Cohl, who was working the Stones’ tour, and asked for the business. Game Creek’s previous experience was only with sporting events, but Cohl vouched for the company, and the Stones agreed to let the company handle production at the Garden. HBO was so happy with the results that they hired Game Creek again. The company subsequently worked to provide production for the likes of Oprah Winfrey, Justin Timberlake, David Letterman, Céline Dion, and both Presidential inaugurations of Barack Obama. “So the bottom line is that, not directly from the Jacksons but as a result of doing the Victory Tour, we have made up the losses,” says Sullivan. Or, in other words, “The Victory Tour did have a grand and glorious silver lining for the Sullivan family.” Adapted from Michael Jackson, Inc: The Rise, Fall and Rebirth of a Billion-Dollar Empire, by Zack O’Malley Greenburg. The book will be published by Simon & Schuster in the US on June 3. All images: Getty, Corbis.