Promoter bet house on Jackson – and lost

American company behind O2 concerts left with huge bill to refund singer’s fans

Michael Jackson's untimely death, less than a fortnight before his 50-date London residency was due to begin, marks the failure of one of the biggest gambles ever taken by a concert promoter.

The US entertainment giant AEG, which organised the pop star's unprecedented string of concerts at the O2 Arena in Greenwich, south-east London, and collected more than £50m in ticket sales, will now have to organise the largest refund in recent memory. The company is also facing serious questions over the status of its insurance policy for the gigs.

The deal was hatched in a room in the MGM Grand Hotel in Las Vegas in January, a fitting location for a gamble of such sizeable proportions. Jackson, dressed in a black suit, arrived with his youngest son, Prince Michael II, and Dr Tohme Tohme, a close friend and confidant. The unlikely trio met four AEG executives: its billionaire founder Philip Anschutz, the chief executive Tim Leiweke, the head of its live music division Randy Phillips and show manager Paul Gongaware.

Jackson's affairs were in disarray. He had run up debts of about $100m, and in 2005 was forced to pay $25m in out-of-court settlements to families who accused him of abusing their sons. He had also sold his Neverland ranch. But the meeting, at which the singer appeared fit and healthy, was enough to convince Mr Anschutz to try his luck.

AEG's pursuit of Jackson began several years ago, when Mr Phillips approached the singer to ask him if he would like to do a series of shows. Jackson refused, saying he did not feel up to it, but when the executive made a similar request in 2007, the cash-strapped performer agreed, saying he was now well enough to perform.

But barely three months after the meeting in Nevada, AEG had a big problem. After taking the decision overnight to increase the number of Jackson's shows from 10 to 50, it struggled to find an insurer willing to provide cover for the final 30 gigs. Even if one could be found, the policy would have cost about £300m.

In March, Mr Phillips said AEG was still negotiating with insurance companies but would be willing to "self-insure" the concerts if necessary because it had confidence in Jackson's health. Mr Phillips said at the time: "The insurance brokers sent doctors and they spent five hours with [Jackson], taking blood tests. But we would be prepared to self-insure to make up the dates. It's a risk we're willing to take to bring the King of Pop to his fans."

AEG reportedly managed to find cover of £130m for up to 20 concerts, but had not made arrangements for at least 30 dates at the time Jackson died. Insurers worried he would not be able to complete the residency owing to ill health. The pop star had a bad track history: in 2005, Marcel Avram, a German concert promoter, won millions of dollars in damages after Jackson pulled out of a string of millennium gigs. Yesterday, AEG refused to comment on its insurance status.

Mr Phillips insists Jackson always knew about the planned scale of the concerts but, as recently as four weeks ago, the singer voiced concern about the number of gigs. "I don't know how I'm going to do 50 shows," he told fans gathered outside his rehearsal studio in Burbank, California.

"I'm not a big eater – I need to put some weight on. I'm really angry with them booking me up to do 50 shows. I only wanted to do 10 and take the tour around the world to other cities, not 50 in one place. I went to bed knowing I sold 10 dates and woke up to the news I was booked to do 50."

On 21 May, it was announced that the residency was being pushed back by five days. AEG denied the decision was taken because of Jackson's health, instead citing problems with the stage production. The next day, after Jackson was photographed entering a clinic, it was reported that he was to receive treatment for skin cancer. The claim was never substantiated, but rumours persisted of Jackson's frailty and the organisers' worries about his ability to cope with the exhausting schedule.

Kenny Ortega, who was in charge of directing the O2 shows, was reported to be auditioning lookalikes to appear in some dance routines to ensure Jackson would be able to make it through each gig. In the end, the King of Pop did not live to attempt even one.

The fans O2 refunds

*The 800,000 ticketholders to Michael Jackson's 50 concerts at the O2 are expected to get a full refund if they bought from agencies connected to the concert organisers. Ticket prices ranged between £55 and £75.

Arts and Entertainment
Novelist Martin Amis at The Times Cheltenham Literature Festival

books
Arts and Entertainment
Alfred Molina, left, and John Lithgow in a scene from 'Love Is Strange'

After giving gay film R-rating despite no sex or violence

film
Arts and Entertainment
Robin Williams will be given a 'meaningful remembrance' at the Emmy Awards

film
Arts and Entertainment

tv
Arts and Entertainment
Arctic Monkeys headline this year's Reading and Leeds festivals, but there's a whole host of other bands to check out too
music
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Arts and Entertainment
Cliff Richard performs at the Ziggo Dome in Amsterdam on 17 May 2014

music
Arts and Entertainment

TV
Arts and Entertainment
Educating the East End returns to Channel 4 this autumn

TV
Arts and Entertainment
Benedict Cumberbatch will voice Shere Khan in Andy Serkis' movie take on The Jungle Book

film
Arts and Entertainment
DJ Calvin Harris performs at the iHeartRadio Music Festival

music
Arts and Entertainment
The eyes have it: Kate Bush

music
Arts and Entertainment
From left to right: Mark Crown, DJ Locksmith and Amir Amor of Rudimental performing on stage during day one of the Wireless Festival at Perry Park, Birmingham

music
Arts and Entertainment

books
Arts and Entertainment
Tim Vine has won the funniest joke award at the Edinburgh Festival 2014

Edinburgh
Arts and Entertainment
Peter Capaldi and Chris Addison star in political comedy The Thick of IT

TV
Arts and Entertainment
Judy Murray said she

TV
Arts and Entertainment
Tim Vine has won the funniest joke award at the Edinburgh Festival 2014

edinburgh
Arts and Entertainment
Jeremy Paxman has admitted he is a 'one-nation Tory' and complained that Newsnight is made by idealistic '13-year-olds' who foolishly think they can 'change the world'.

Edinburgh
Arts and Entertainment
Seoul singer G-Dragon could lead the invasion as South Korea has its sights set on Western markets
music
Arts and Entertainment
Gary Lineker at the UK Premiere of 'The Hunger Games: Catching Fire'
tv
Arts and Entertainment
Christian Bale as Batman in a scene from
film
Arts and Entertainment
Johhny Cash in 1969
musicDyess Colony, where singer grew up in Depression-era Arkansas, opens to the public
Arts and Entertainment
Army dreamers: Randy Couture, Sylvester Stallone, Dolph Lundgren and Jason Statham
film
Arts and Entertainment
The Great British Bake Off 2014 contestants
tvReview: It's not going to set the comedy world alight but it's a gentle evening watch
Arts and Entertainment
Umar Ahmed and Kiran Sonia Sawar in ‘My Name Is...’
Theatre
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Have you tried new the Independent Digital Edition apps?

ES Rentals

    Independent Dating
    and  

    By clicking 'Search' you
    are agreeing to our
    Terms of Use.

    Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

    We know all too much about the cruelty of Isis – but all too little about who they are

    Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
    Neanderthals lived alongside humans for centuries, latest study shows

    Final resting place of our Neanderthal neighbours revealed

    Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
    Scottish independence: The new Scots who hold fate of the UK in their hands

    The new Scots who hold fate of the UK in their hands

    Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
    Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

    Blight club: Britain's ugliest buildings

    Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape
    eBay's enduring appeal: Online auction site is still the UK's most popular e-commerce retailer

    eBay's enduring appeal

    The online auction site is still the UK's most popular e-commerce site
    Culture Minister Ed Vaizey: ‘lack of ethnic minority and black faces on TV is weird’

    'Lack of ethnic minority and black faces on TV is weird'

    Culture Minister Ed Vaizey calls for immediate action to address the problem
    Artist Olafur Eliasson's latest large-scale works are inspired by the paintings of JMW Turner

    Magic circles: Artist Olafur Eliasson

    Eliasson's works will go alongside a new exhibition of JMW Turner at Tate Britain. He tells Jay Merrick why the paintings of his hero are ripe for reinvention
    Josephine Dickinson: 'A cochlear implant helped me to discover a new world of sound'

    Josephine Dickinson: 'How I discovered a new world of sound'

    After going deaf as a child, musician and poet Josephine Dickinson made do with a hearing aid for five decades. Then she had a cochlear implant - and everything changed
    Greggs Google fail: Was the bakery's response to its logo mishap a stroke of marketing genius?

    Greggs gives lesson in crisis management

    After a mishap with their logo, high street staple Greggs went viral this week. But, as Simon Usborne discovers, their social media response was anything but half baked
    Matthew McConaughey has been singing the praises of bumbags (shame he doesn't know how to wear one)

    Matthew McConaughey sings the praises of bumbags

    Shame he doesn't know how to wear one. Harriet Walker explains the dos and don'ts of fanny packs
    7 best quadcopters and drones

    Flying fun: 7 best quadcopters and drones

    From state of the art devices with stabilised cameras to mini gadgets that can soar around the home, we take some flying objects for a spin
    Joey Barton: ‘I’ve been guilty of getting a bit irate’

    Joey Barton: ‘I’ve been guilty of getting a bit irate’

    The midfielder returned to the Premier League after two years last weekend. The controversial character had much to discuss after his first game back
    Andy Murray: I quit while I’m ahead too often

    Andy Murray: I quit while I’m ahead too often

    British No 1 knows his consistency as well as his fitness needs working on as he prepares for the US Open after a ‘very, very up and down’ year
    Ferguson: In the heartlands of America, a descent into madness

    A descent into madness in America's heartlands

    David Usborne arrived in Ferguson, Missouri to be greeted by a scene more redolent of Gaza and Afghanistan
    BBC’s filming of raid at Sir Cliff’s home ‘may be result of corruption’

    BBC faces corruption allegation over its Sir Cliff police raid coverage

    Reporter’s relationship with police under scrutiny as DG is summoned by MPs to explain extensive live broadcast of swoop on singer’s home