he's not as rich as he thinks
2003-11-21 | 11:05 a.m.

for those of you who think he still has money:

Jacko's wallet could feel the pinch

His lavish spending makes other celebrities look like Gandhi, but now the singer is heavily in debt.

November 21, 2003: 1:02 PM EST

NEW YORK (CNN/Money) - With lavish spending, and a 2,600-acre ranch and playground known as Neverland, it's easy to overlook Michael Jackson's financial problems.

The King of Pop, who was once noted as the richest entertainer in the world, with a $750 million net worth, is heavily in debt and counting on his latest compilation CD, "Number Ones," according to a published report.

But his arrest Thursday on allegations of child molestation also has ruined a campaign by Jackson's Sony Music label, Epic Records, to relaunch him as a $1 billion music legend, the Times in London reported Thursday.

"Number Ones," which was released Tuesday and features top hits from Jackson's 30-year solo career, is expected to sell a little less than 100,000 copies in its first week, according to music trade site HitsDailyDouble.com. That would amount to about half the first-week sales volume industry insiders had been expecting.

Earlier this week, CBS scrubbed its planned broadcast of a special, "Michael Jackson Number Ones," that had been scheduled to run Nov. 26 to promote the album.

Extravagant spending

It isn't difficult to picture the pop icon being a heavy spender, as most people have witnessed his extravagant shopping spree on TV.

In a television documentary, "Living with Michael Jackson" aired in February, the entertainer took BBC journalist Martin Bashir on a shopping excursion during a stay in Las Vegas. The scene made other celebrities look as frugal as Gandhi, with the pop icon reportedly spending a cool $6 million within hours.

Jackson also spends approximately $1.2 million a month -- including the cost of running Neverland ($240,000), limousine rentals ($195,000) and maintaining a personal staff of 120 (about $375,000), the Times said.

Earlier this year, Jackson tried to sell the Neverland ranch for $22.5 million but withdrew it from sale when estate agents said it would fetch only $ 13.5 million, the Times said. The star bought the ranch for $28 million in 1988, the paper added.

Last year, Jackson even racked up a $100,000 hotel bill in a brief visit to New York, according to Forbes.

His assets include Neverland, located in the hills above Santa Barbara, Calif., and homes in Southern California and Las Vegas. Most of his assets are in musical holdings worth an estimated $450 million, including 200 Beatles titles and songs recorded by Elvis Presley, the publication reported. The Beatles hits alone earn him a steady $34 million a year, according to the Times.

In need of a hit

Jackson's big comeback bid two years ago with "Invincible," his first album of original music in six years, cost a reported $30 million to produce but fell flat commercially, logging meager U.S. sales of just over 2 million copies, according to Nielsen SoundScan.

While 2 million copies would be considered a respectable figure for less lofty talent, it pales in comparison with the success of Jackson's 1982 megahit "Thriller," the biggest-selling studio album of all time, with certified domestic sales of 26 million copies and more than 40 million units worldwide.

In 2001, the singer borrowed $188 million from Sony for living expenses and the cost of recording "Invincible," according to the Times of London. When the CD flopped, however, Jackson couldn't repay the loan and then blamed Sony for not giving the album enough marketing support.

Sony pushed for the "Number Ones" release, the last under Jackson's contract with the music studio, to recoup some money from him, the Times said.

Also according to the Times, the 45-year-old singer faces up to $240 million in debt and finds himself without a record contract for the first time since he was 10 years old.

Long decline

The 1995 double-CD set "HIStory Past, Present and Future, Book 1," a collection of post-Motown hits and new songs, sold a modest 2.5 million units. Jackson's 1991 studio release, "Dangerous," his last album before child sex-abuse allegations surfaced, sold nearly twice that in the United States.

While his popularity as an artist, especially in the United States, has waned considerably, Jackson has been dogged through much of the past decade by scandals and revelations about his eccentric lifestyle.

Indeed, he has had nothing approaching a major hit since his career essentially ground to a halt 10 years ago, when he was accused of molesting a 13-year-old boy in a case that ultimately was settled privately. Jackson denied any wrongdoing, and no criminal charges were filed.

The pop icon surrendered to the Santa Barbara County Sheriff's office Thursday to face charges of child molestation. He surrendered his passport and was released after posting a $3 million bond. His lawyer rejected the accusations as "a big lie."

Neither Stuart Backerman, spokesman for Jackson, nor Sony's Epic Records immediately returned calls made by CNN/Money.

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