AEG vs. Jackson trial Day 14. Julie Hollander of AEG Live or why we need full transcripts of the trial
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DAY 14 May 20, 2013
AEG Live Vice President of Event Operations Accounting
By now TeamMichaelJackson has posted several testimonies of the AEG people – Julie Hollander, the AEG controller and Vice-President and the first parts of Shawn Trell’s and Paul Gongaware’s testimonies.
Reading Trell made me realize the importance of some of Julie Hollander’s statements and this is why I need to start with her first. As I have to retype the testimonies the post will have only some excerpts from Julie Hollander and my short comments on them. The full transcripts of her three days of testimony are found here:
The behavior of this witness was called by TMJ ‘extremely stroppy’ . Dictionaries explain stroppy as “hard to deal with, angry, unruly, impudent, belligerent” and I also thought the same of her when in answer to Panish’s question about some additional exhibits in her deposition she said “I didn’t sit there and count them”.
I will start with her telling us that some people who worked with AEG for the This Is It tour did not have proper contracts, but were nevertheless signed in and paid by AEG after Michael’s death.
WORKING WITHOUT A CONTRACT WAS AEG’S NORM
Hollander mentioned two of them – Travis Payne and Karen Faye. It struck me that the key people who worked without a contract with AEG were those who were coming from Michael’s side (Travis was Ortega’s protégé and Ortega was invited by Michael too).
Since both Payne and Faye were working on the tour since April 2009 I wondered why AEG didn’t make a contract with them for more than three months and the matter had to be formalized after Michael’s death. The only reason I see for it is that lack of the official contract was used by AEG as a leverage to make these people more ‘obedient’ and easy to control.
Now we know that with Travis Payne this policy worked while with Karen Faye it did not.
Q. Ma’am isn’t it true some people worked, then signed contract later, they got paid.
A. That is correct.
Q. Do you know Travis Payne?
A. I know him as part of cast and crew.
Q. Did you know he had a contract with AEG?
A. Do you know he worked without a contract?
A. I don’t know who worked without one. As far as payment would have happened would have been after services were rendered.
Q. If a person performed their duties they were paid afterwards without a contract.
A. It’s not my place to know that.
The fact that Payne and Faye worked without a contract has a direct bearing on Conrad Murray.
His situation was exactly the same – he was also recommended by Michael Jackson, had to work without a contract and same as with Payne and Faye his contract with AEG also said that he was to perform the services reasonably requested of him by the Producer (and not the Artist).
The only difference is that Murray’s contract supposedly had a clause about the need for Michael to sign it, but this is all. Oh, I forgot one more difference – Conrad Murray was not paid by AEG while Payne and Faye were.
Since Conrad Murray was not paid during the whole period while he was working the non-payment leverage factor used by AEG for easier manipulation of people applies to him perfectly well too.
All these people were called by AEG ‘independent contractors’. When Panish compared Conrad Murray with the other independent contractors AEG consistently objected and Hollander gave extremely evasive answers:
Q. In your deposition it reads, IF AN INDEPENDENT CONTRACTOR PERFORMS HIS/HER SERVICES ON THE THIS IS IT TOUR, WOULD YOU EXPECT AEG TO PAY THAT CONTRACTOR?
A. TYPICALLY YES… WE WOULD PAY
Q. Dr. Murray was a Doctor performing his services to Mr. Jackson.
AEG: Objection. Overruled
Q. There is no reason when they wouldn’t pay his or her obligations. Dr. Murray was the Doctor performing his services for Mr. Jackson.
AEG: Objection. Overruled
A. My understanding was that Dr. Murray was part of the budget, his services were listed on the budget for the tour on request of the artist.
Q. So you don’t have any understanding of whether Dr. Murray performed any services?
A. I was in the accounting department, I can’t say for sure, not me personally.
Panish: Do people work for AEG without fully executed contracts?
A.Yes, they may start work on general terms.
For the second day of Hollander’s testimony we have no transcript but a summary from TMJ. Panish asked Hollander about the AEG practice to make people work without a contract:
“She stated that it was standard AEG policy that no payments be issued without fully executed contract – and that the contract could get executed at a later date.
Panish said people did the work before Mr. Jackson died, but got paid after he died.
A.I don’t recall specifics.
Hollander said there were people who had contracts renegotiated after Michael Jackson’s death. She said AEG renegotiated contracts after Michael died so as to ‘mitigate the burden on the Michael Jackson Estate’.
Hollander: “People commence work before their contract is executed, yes.”
Q. So based on this provision, you pay before or only after the contract has been executed?
A. Only after the execution of the contract.
Stebbins: Let’s turn to last page of the contract.
Q. This here at the bottom, Ms. Hollander we talked last week about contracts being negotiated and the paperwork being done after, do you remember
Q. Now there were people working without a contract that had been fully executed, like Travis Payne and Karen Faye.
Q. Was there anyone else working without a contract that had not been fully executed yet, because there was no signature, like for instance Mr. Jackson.
The policy of delaying people’s contracts enabled AEG to be selective in choosing whom to pay and whom not to pay. All unsigned contracts are considered by them ‘not executed’, however to some people they do pay and to some they do not. I wonder on what basis they were making their selection in the This Is It case?
To Murray they chose not to pay:
A.I am using draft because the contract is not executed, meaning all parties didn’t sign it.
Q. If Mr. Jackson didn’t die and he signed the contact and AEG signed the contract, Dr. Murray had already signed the contract… AEG would owe Dr. Murray money, right?
AEG: Objection. Overruled.
A. If all parties signed the contract, it would have been a fully executed contract and I would have to have, it those costs were approved. There’s no reason why wouldn’t have paid Dr. Murray.
Let me ask a question at this point. From the follow-up tweets we learn that Frank Dileo made a sort of a declaration about Michael’s ardent desire to take upon himself all production costs and this is why the Estate paid to AEG $40 million in their compensation.
Why didn’t Dileo make a similar declaration about Michael’s desire to sign Murray’s contract so that AEG should pay him too? It’s obvious that AEG never wanted to pay him anything at all as non-payment seems to be another of those ‘standard AEG policies’.
Timm Woolley who was creating AEG’s budget for the tour included Murray’s salary of $300,000 for two months into their budget which automatically turned Murray into an independent contractror having a deal with AEG (and not Michael Jackson):
Q. Now, the only reason why you say this is draft contract for Dr. Murray is because no one on behalf of AEG had signed it?
A.I say that because Mr. Jackson didn’t sign it.
Q. Mr. Jackson was dead and could not sign.
Q. Do you have any evidence that Dr. Murray didn’t work for Mr. Jackson after being retained by AEG…
AEG: Objected by Stebbins: states Dr. Murray was hired by AEG. Overruled.
A.I have no evidence to the contrary.
Q. In the budget you included $300,000 to pay to Dr. Murray.
A. I did not.
Q. I am sorry. Mr. Woolley created the budget, per AEG’s agreement with Dr. Murray for the current budget at the time for $300,000 because the doctor would be paid $150,000 a month. This was for two months’ pay and the contract was finalized in June.
A. There was $300,000 allotted for Dr. Murray.
Q. And that was approved by Mr. Gongaware.
A. Yes, that eventually would have been approved by Mr. Gongaware.
Side note: Witness looks extremely stroppy! Witness is not being truthful, it’s evident to many.
With the AEG people and their lawyers you never know what to expect and in this connection the activity the Jacksons’ lawyer Brian Panish noticed in the hallway during the break is very interesting:
Q. Ms. Hollander is this notebook of documents which you reviewed before coming to testify in court today?
A. It appears to be.
Q. I added them all up, there seems to be 80.
A. We flipped through it.
Q. A few have been removed? Did you know if there are any you didn’t review?
A. Yes, some were blank.
Q. And when you were in the hallway counsel removed some. I saw that.
Q. Do you know by looking through here which ones were removed?
A. That I cannot answer.
Ms. Stebbins: I removed the ones the witness didn’t see.
Panish: I was standing right outside the door, I saw exactly what was happening.
Stebbins: I represent I gave to Mr. Panish every document the witness reviewed.
Judge Palazuelos: Some were blacked.
Stebbins: Now they are in full
Panish: Your honor…
Judge: Let’s keep going.
Okay, let’s keep going. The next point is who Michael’s advances were actually paid to – directly to Michael or to someone else.
This is no small matter though it may look like one at first sight. In accordance with the AEG/Michael Jackson contract out of the $5million paid as an advance to Jackson, $3million was going directly to the 2Sea Records company to settle the lawsuit of the Prince of Bahrain (paying him was a condition set by AEG) and the remaining $2million was not given to Michael personally but was remitted to Michael Jackson Company LLC where Dr. Tohme Tohme was President (or at least he said he was).
This point always worried me very much – Tohme could easily dispose of the sums as he was holding Michael’s general power of attorney and this is probably why I remember so well to whom the money was remitted though I am no controller of AEG. Hollander is, but she says she does not remember a thing:
Q. AEG made advances at least once to Mr. Jackson during preparations for the This is it tour.
Q. These advances were paid directly to Michael Jackson?
A. I don’t know. I don’t have a recollection as to who the payee was
Q. Was there advance paid to Michael Jackson, yes or no?
A. They were paid on behalf of, in effect to Mr. Jackson. I’m not trying to give an evasive answer
Q. AEG Live paid advance to Mr. Jackson. Yes or No.
A. Yes, but they are recoupable at some point.
Q. There were also advances paid to others that AEG wanted to get back from Michael Jackson.
Q. And this is a cost, not advance.
Q. And if it’s cost not an advance, it should be reported as so, not an advance
Q. Otherwise it would not be done correctly.
Q. Cost would be something AEG would incur and pay, correct?
Q. And they don’t get paid back from the artist, do they?
A. It depends on the situation.
All this talk about ‘cost’ and ‘advances’ looks boring and surely confused you so let me explain. The money to be paid to Murray was production costs and this is very important to remember.
COSTS OR ADVANCES – WHAT DOES IT MATTER?
Though at first sight there is no big difference between costs and advances as both seem to be Michael Jackson’s responsibility (if we are to believe AEG of course), the differentiation between these two is extremely important. You cannot even imagine how important it is.
On her second day of testifying Hollander explained to Stebbins what an advance is:
“Stebbins asks Hollander what is an advance. Hollander said it was like a cash advance and – depending on the contract – it would be paid back by the artist.”
Since both advances and costs were turned by AEG into Michael’s responsibility most people will probably say – what does it matter if both of them were to be paid by Michael Jackson anyway?
But this will be more or less true only if Michael indeed was to cover production costs and if he really agreed to pay them.
However from further tweets we learn that AEG did not receive any written consent from Michael Jackson to cover production expenses, and this makes us suspect that the production costs were most probably AEG’s responsibility and in case of cancelling the tour were to be covered by the insurance.
What’s important here is that the expenses were not Michael’s and that AEG is most probably lying here.
As to Conrad Murray the matter of his salary being a production cost is a truly fundamental one.
If production costs were AEG’s responsibility and Murray’s salary was part of those costs, it means that not only AEG hired Murray but they were to cover the expenses on him too. If the tour was cancelled the cost of his services was to be reimbursed to them by the insurance policy.
It also means that Murray was fully AEG’s responsibility – same as Travis Payne, Karen Faye, Kenny Ortega and other independent contractors who were also brought into the project by Michael Jackson. And the fact who brought who into the project does not matter here at all.
Paying to Murray was actually what AEG bosses most probably even wanted themselves as allowing Michael to pay the doctor could not give AEG a chance to monitor and control him. They had a chance to make the doctor fully independent of them but they never used the chance. To do so all they needed was include Murray into Michael’s advances and this is why the difference between advances and production costs matters so much.
If they had given Michael a bigger advance and said that he pays to his doctor himself they would have really made the doctor fully independent of them and they would have really washed their hands off everything he was doing to him – but they never did it that way.
In terms of overall expenses advancing Michael more money for Murray would be exactly the same as now they say that both sums (advances and production costs) were to be returned by MJ anyway. If this was indeed so for AEG it would not really make any difference if they first gave Michael $300,000 more and then spent $300,000 less – the money spent would be exactly the same.
But from the view of controlling Murray it made all the difference in the world. To adjust his behavior AEG needed a payment leverage to apply to Murray and therefore they were even interested in keeping Murray on their payroll. It is like keeping a carrot in front of a donkey to make it going, and it does not absolutely mean that the carrot will be finally given as promised.
This is why AEG chose to draft a contract between themselves and Murray, specify there that he was to provide only the services “reasonably requested by the Producer”, include the costs on the doctor into their budget and … never showed the draft of the contract to Michael Jackson.
If this contract was done for Michael Jackson as they say it was shouldn’t they have at least shown it to the person for whom they were supposedly doing it?
On the third day of Hollander’s testimony we find out that Michael Jackson did not see a copy of Murray’s contract with AEG (to be more exact Ms. Hollander had no idea of it). Panish also wanted her to admit that Murray’s expenses were classified as production costs because they were meant to be covered by the insurance policy but Ms. Hollander said that this matter “never came up”:
Q. Do you know if Mr. Jackson received a copy of Dr. Murray’s contract?
A. I have no idea.
Q. Didn’t you tell us the amount of compensation to be paid to Dr. Murray for his services, was approved by Mr. Jackson?
A. I state what was in the budget for the doctor and on his contract.
Q. So you are unaware of whether Mr. Jackson approved the amount of compensation for Dr. Murray?
A. I was told that it was put in the budget at the artist’s request, that’s all I know.
Q. So that means that Mr. Jackson did approve payment for Dr. Murray?
Q. And you don’t have any clue as to why Mr. Woolley classified Dr.Murray’s fees as production or pre-production?
A. No, I do not know.
Q. No one told you it was because it could be covered under the insurance policy AEG were trying to get.
A. It never came up.
Judging by the transcript her testimony about the way Murray’s services were included into the AEG budget was quite a spectacle. Ms. Hollander evaded answers, argued with the court, made everyone wait for her answers and impeached herself by giving answers not consistent with her earlier depositions:
Q. And the first budget this was dated may 19th and was subject 16 of the email?
A. That’s right.
Q. So Mr. Wooley prepared subject 16 and sent 19th?
A. Based on the description I would concur yes.
Q. You didn’t answer. Did you speak to Mr. Trell about this budget allotted for Dr. Murray, yes or no…
* the court waits, witness thinks*
Mr. Panish: Let me ask the question again.. Did you speak to Mr. Wooley, about the 150,000 compensation for Dr. Murray being added to the budget”
A.I spoke to Mr. Woolley about the inclusions and my conversation with Mr. Trell we discussed Dr. Murray and it was …
* courts waits again*
A. Yes, if you want to put that way he (Trell) was anticipated being a part of this project.
Q. So you talked to Mr. Wooley and Mr. Trell about inclusion of Dr. Murray in the budget?
AEG: Objection. Overruled
A. I talked to Mr. Wooley about the inclusion of Dr. Murray in the budget and would have talked to Mr. Trell about details of that.
Q. Did you discuss with Mr. Woolley and Mr. Trell about the inclusion of Dr. Murray in the budget or the details of it, yes or no?
A. In my answer I said I discussed with Mr. Woolley the inclusion, I don’t agree with the semantics.
Judge Palazuelos: You are saying yes or no.
A. I’m not trying to evade anything.
Judge Palazuelos: Play it (referring to Hollander deposition)
Q. Do you recall as you sit here now, ever telling anyone about AEG Live’s decision to include compensation for Dr. Murray into the tour budget?
Q. And who did you talk to about that decision?
A. Tim Woolley.
Q. Anyone else?
A. Probably Shawn Trell… You know I am a person who has not been through this sort of thing before, I never said I didn’t speak to Mr. Trell, it was an honest answer then, it’s an honest answer now!
“Mr. Panish plays video recording of Ms. Hollander deposition, in the recorded deposition when Mrs. Hollander is asked “Did you discuss with anyone about including Dr. Murray on the budget for This Is It tour? She replied “Yes, Mr. Woolley and Mr. Trell”
Then Mr. Panish shows Ms. Hollander transcripts of her video deposition.
A.This is hard to read.
Q. OK I’m going to blow it up for you, you have seen this before.
Q. You reviewed this all in preparation for your testimony.
Q. Pre tour $300,00 and another $450,000 and this was as of May 16th 2009. This what Mr. Woolley sent to you and you passed it on to Mr. Webking who as you understand passed the approved inclusion into the tour budget on to Mr. Anschutz, right?
A. Ummm, yes.
Q. What number is this?
Q. Whose number is that?
A. That is Mr. Wooolley’s numbering system.
Q. Mr. Woolley created that code as identifier for medical management daily care.
Q. And that medical management daily care was referring to Dr. Murray?
Q. The first $300,000 was referring to Dr. Murray’s first month pay, right?
Q. Then we also talked about $450,000 for Dr. Murray.
A. This only refers to $300,000
Q. As of, we have largely budgeted for Dr. Murray.
Q. That was added after February 7th 2009?
Q. That was the first budget update sent to Mr. Anscutz.
A. Which one?
Q. This one.
The date of February 7, 2009 made me wonder – if they started discussing the expenses on Murray that early why couldn’t they decide the matter with his contract for half a year after that?
Other emails said that the matter of Murray’s compensation was already settled at the end of April 2009 and then on May 20:
“Panish shows Hollander a document from April 30, 2009. It lists ‘management medical’ for $300,000.”
“Panish shows an AEG Pre-tour Cost Projection document dated May 20, 2009. It states that AEG was to pay Conrad Murray $300,000. This was pursuant to the contract. The document shows that AEG budgeted to pay Murray for his work with Michael Jackson as ‘Pre-production cost”. Murray was not paid.”
So if I understood it right the first time the sum of $300,000 was added to the budget sometime “after February 7, 2009”, then it was listed as “management medical” in the budget at the end of April and on May 20th it was again budgeted as pre-production cost?
But if all this time they were including Murray’s salary into their budget why did they begin drafting a contract with him only some time in the middle of June as Kathy Jorrie said at Murray’s trial?
All of it looks like an intentional game played by AEG with their goals being totally different from those they declare openly and masked very well by the various pretexts they give for not doing things right.
DR. FINSKESTEIN AS ANOTHER CHOICE
Another incredible point that caught my attention is that following Mr. Panish’s questions Ms. Hollander had to admit that there was some kind of a choice between doctors and AEG was somehow involved in it.
The choice seemed to be between Dr. Murray and Dr. Finkelstein and we learn about it from the fact that she was “kept in the loop” (in the know) that the choice was made in favor of Conrad Murray. This was discussed between her, Gongaware, Philips and Webking and looked to me like an incredibly important matter.
It was broken on Hollander by Panish somewhat unexpectedly:
Q. And Dr. Murray was the only physician Mr. Gongaware for AEG Live had budgeted in for this This is it tours.
A. That’s correct.
Q. And this email is to Mr. Phillips and Mr. Webking, the controller and you’re the controller and Mr. Gongaware of Concerts West.
Q. And this was sent by Mr. Woolley and what did he attach?
A. Well, it says, AEG O2 doc, that’s the description of the transaction. Which would be compensation for the doctor in London. It’s an explanation of difference between compensation in the US and the UK.
Q. And the purpose of this email was to keep you in the loop that it would be Dr. Murray and not Dr. Finkelstein.
Q. So you were involved in the process, that’s you were on the email?
Dr. Finkelstein is a personal friend of Paul Gongaware. As we know from Karen Faye’s testimony Dr. Finkelstein was one of the two doctors accompanying Michael on the Dangerous tour (the other doctor was the ‘insurance’ Dr. Forecast). Since the Dangerous tour was cancelled due to Michael’s need to go to a rehab the matter of prescribed drugs was common knowledge for everyone and especially Paul Gongaware as Finkelstein’s friend.
So if there was a selection between Dr. Finkelstein and Dr. Murray it means that AEG could easily guess what kind of treatment Conrad Murray was expected to provide to Michael. The only mistake they made was in the kind of the prescription drug but not in the matter of prescription drugs in general.
In short they knew (or supposed) that it should be something and the only thing they probably did not know what exactly it would be. They most probably thought that it was Demerol or another painkiller and they were absolutely ready for it. Moreover they probably even expected the doctor to do it.
And it must have been a big surprise for them, a really big surprise that Michael was not taking any painkillers at all.
Another side of this point is that if there was a choice between the two doctors the nomination of the doctor for the tour was not wholly Michael’s matter, was it?
What if AEG deliberately chose Conrad Murray over Finkelstein as his financial dependency on them and the payment leverage they could employ made Murray easier to control and more suitable for their needs?
HOUSES FOR THE STAFF AS MICHAEL’S RESPONSIBILITY?
In the next piece from the summary of Hollander’s testimony she says that AEG was to make payment for three houses for Bush, Faye and Murray in London, and this confirms that it was AEG’s obligation and not Michael’s.
Well, this is probably how they presented it to Michael and Michael might have indeed thought that his obligations were only to pay for his personal needs out of the advance received from AEG.
But the problem is that first Ms. Hollander says the three houses in London are AEG’s expense, then she confuses us by saying it was advance payment to Michael, and finally she agrees with Panish that if the expenses were real advances they would have been listed as such in the budget. But they were not. They listed them as production costs, and this as we’ve seen is something totally different.
So this way she admits that the expenses on accommodation were production costs and the productions costs were AEG’s. Conrad Murray’s salary is also included into production costs as it was not included in the advances:
AEG pays for entertainment arcade and bowling alley as a precondition in terms of what Michael requested at the Carolwood house as and part of the agreement.
AEG pays for 3 of the houses – for Bush, Faye and Murray (wardrobe dresser, makeup/hair and personal physician). Panish also exhibited several additional emails showing that other vendors were paid – including Karen Faye.
Michael Jackson pays for additional furniture, staff, security, nanny, food.
Gongaware responded on June 19, 2009: I agree with Timm’s allocation and the charges. Approved.
Hollander said it was pursuant to the terms of the contract that AEG must pay those costs relating to This is it tour – as an advance payment.
Panish: If the $300,000 was supposed to be advance for Mr. Jackson to be repaid, it would be listed under category ‘Artist’s Advances’
In reality Michael was evidently supposed to cover only the expenses on his everyday life (nanny, etc.). But the expenses on independent contractors like Karen Faye, Bush and Murray and the cost of their accommodation in London were to be “paid” by AEG . “Paid” comes in quotes because on the one hand Hollander says they were to pay, but as ‘advance payment’ to Michael, but these advances are not listed anywhere and all of it is production cost, so on and so forth. In short she gives evasive answers which do not really answer but only confuse.
On the other hand we still rememberAEG crying in each interview after Michael’s death how they had spent millions on the show and how huge their losses were and now they expected them to be covered by the insurance.
So when they were crying they were either lying to us that the expenses were all theirs, or they were not lying and the expenses were indeed theirs, only they later stealthily shifted all of them onto Michael and his Estate.
It is either this or that.
While four years ago AEG said no word about all production costs supposed to be Michael’s responsibiliy now Ms. Hollander openly asserts that all of them were to be covered by Michael Jackson:
Hollander testified that Michael Jackson was responsible for 100% of the production costs if the tour did not go forward.
And if the tour went forward, Michael Jackson was responsible for paying 95% of the costs – AEG would pay 5%.
Panish also very much doubs AEG’s information that Michael was responsible for the production costs, and under his heavy questioning the next witness Shawn Trell had to admit that they had no written consent from Michael Jackson to cover them. This is why Tohme and Frank Dileo signed certain declarations about Michael very much willing to go into all that production expense and agreeing to cover it.
But over here Ms. Hollander ‘s testimony contradicts the point as it asserts that Tohme had no right to sign anything at all on behalf of Michael Jackson. Hollander says she was aware that Tohme Tohme was fired and had no right to sign anything on behalf of Michael Jackson.
And if the chief AEG controller knew it, it means that all AEG bosses knew that Tohme was signing a worthless document, however they needed at least someone to state that Michael was ready to cover all production costs:
“Hollander said she knew who Tohme Tohme was – and that she knew he had been let go at some point from duties as Mr. Jackson’s manager. Hollander testified she knew Tohme was terminated before Mr. Jackson died – and had no legal signing authority for Mr. Jackson.”
An interesting point, isn’t it?
Brian Panish showed Ms. Hollander a copy of the document sent to Michael’s Estate on October 21, 2009 stating that all production expenses were to be covered by the Estate (on the basis of those managers’ declarations). The sum spent was around $25mln. – 2,5 mln more than was budgeted.
The Estate audited it from the point of view of the accuracy of spending, but they evidently did not look into or dispute the fact that the production costs could not be Michael’s responsibility at all:
Q. Was this document sent to the estate of Michael Jackson?
A. Yes, to my recollection this was sent to Mr. Jackson’s estate.
Q. What was the purpose of sending this?
A. This kind of report was to provide the Mr. Jackson’s estate with and accounting of debts incurred and what had been paid in regards to This Is It and Mr. Jackson, up to the date of the report.
Q. You mean production cost.
A. Yes, production costs would be included in the report.
Q. What’s the date of this report?
A. October 21st, 2009
Q. Is this date after Mr. Jackson passed?
Q. Here… this is the total cost of production that Mr. Woolley budgeted. What does it say?
A. $22,228,000 was the overall production budget.
Q. What was actually spent on production?
A. $24, 835, 011
Q. Is it fair to say there is a significant difference between what Mr. Woolley projected and what was actually spent?
Q. Is it common?
A. It can be… yes.
Q. After Mr. Jackson passed, you sent a report to his estate, did they do audit?
A. Yes, they did.
Q. To your understanding did Mr. Jackson’s estate approve the production costs?
A. The costs were supposed to be paid as they were incurred pursuant to the contract.
Let us not be mislead by the phrase that the production expenses were to be paid by the Estate ‘pursuant to the contract’. First of all the contract does not say a thing about all production expenses being Michael’s responsibility, and second, this was mentioned in the Appendix only (which is undated and unsigned), and not even mentioned but implied and in an extremely indirect and incoherent way too.
The only way we could understand that all production was his responsibility was in the definition of ‘contingent compensation’ to the Artist which was a certain sum minus production costs. If you make an investigation you may come to the conclusion that they are talking of all production costs, but if you do not make this investigation this matter may be easily unnoticed.
Apart from that the AEG papers do not clearly say who is to pay the production expenses. I wonder why the Estate so easily agreed to pay those sums. Most probably because they considered themselves too weak to handle a monster like AEG or were too dependent on their moves. I’m sure that the future will tell us why.
PRODUCER + PROMOTER FEES
Now the AEG people pretend that production expenses have never been theirs. In fact they say they have very little to do with producing the shows and say they are promoters only. They specifically focus on this ‘promoters’ thing to once again assure everyone that production expenses were all Michael’s (and therefore Murray was MJ’s responsibility too).
Ms. Hollander says that since 2009 they produced few tours:
Q. How many have you done where AEG Live was the promoter only?
A. Now about upwards of 100
Q. Erm… what about as producer?
A. We produced few tours since 2009, not too many.
Q. Is it fair to say you have been more a promoter, rather than the producer?
A. By far.
Q. So when you act as producer, you get more money than a promoter?
Q. There is fees paid to producer and to the promoters.
A. Typically it depends on the deal structure.
Q. This deal you talk about, promoter is just one fee.
Q. When AEG is the promoter there is a fee.
A. Yes, there is another fee they receive being producer.
Q. So sometimes there is no fee, is that your testimony.
Q. This time there was, for This Is It there were producer fees.
Well, it is difficult for AEG to prove that they were not producers of the tour as they even charged Michael a producer’s fee for their services. As Shawn Trell will later tell us ‘this time’ AEG charged Michael both as a promoter and as a producer too – 10% as promoter and 5% as producer.
10% was to be charged on the gross sum collected from the tickets, and 5% was on the net income of the Artist. And all this in addition to all the money they made on the secondary tickets sold through Viagogo and other brokers.
Though this is no place to talk about it now for those who don’t know let me just say that AEG was directly selling their tickets through Viagogo and at very high and ‘surprisingly uniform prices’ too as the article below says. Why the uniform prices surprise? Because Viagago is supposed to be a place where fans sell tickets to other fans and in this case any ‘uniformity’ makes you think that you are not dealing with fans but directly with AEG.
However it seems that AEG is not even hiding this fact from the Times:
The Times understands that outside the official sale of the tickets, AEG Live approached secondary ticketing companies – which allow people to resell tickets to sporting and music events – offering to provide them directly with between 500 and 1,000 tickets for each performance.
It is thought that AEG Live offered the tickets on the understanding that they were sold at about £500 each, with 80 per cent of the revenue returning to AEG Live and the secondary ticketing company taking the remaining 20 per cent.
Last night tickets for seats closest to the stage were on sale on Viagogo for thousands of pounds. Other seats in prime locations seemed to be on sale at surprisingly uniform rates, with many priced at £418 and £659.
AEG Live did not deny its links to Viagogo.
As a producer AEG was doing I don’t know what (unless they were really to cover all those production costs themselves) but as a promoter their main obligation was to provide to Michael their O2 arena in London.
In fact filling in their O2 and other facilities was AEG’s biggest concern as these days it is difficult to find stars to fill a big venue like O2 arena on 50 dates. So what AEG was presenting as their huge contribution to the deal should be interpreted in exactly the opposite way – it was a big favor on the part of Michael rendered to AEG that he was giving work to their O2Arena and filling the venue on 50 dates.
After Michael’s death Randy Phillips said that filling in the dates in summer time is a tough job in general, so the most they would have managed to fill without Michael would have been 10 dates:
AEG is also under pressure to book the O2 for some of Jackson’s dates. That’s “the toughest hit,” Phillips says. … The truth is, July and August are the slowest months of the year in Europe, so maybe 10 of those 27 dates would have been filled anyway.”
So if it had not been for Jackson’s 27 shows in the summer of 2009 the O2 Arena would have been filled only on 10 days at the most during the same period of time.
And this makes me think that the increase up to 50 shows from the original 10 was probably because they wanted to fill their O2 arena to its utmost – and this could be the main reason why they set up those 50 shows.
At some point we wondered why they did not arrange 15 shows at triple the price of tickets for example. This would have brought AEG the same revenue, would have tremendously eased the burden on Michael and would have spared his nerves, health and everything else – but then the O2 arena would have stayed vacant on most of the dates and there would have been no chance to sell thousands of premium tickets at inflated prices through secondary ticket offices like Viagogo….
Filling in the venues on as many days as possible and selling extra tickets at exorbitant prices is probably the answer why they set 50 shows at all!
As regards the split of their profit from those concerts the same article mentioned above quoted Randy Phillips saying that the profit split was better for AEG than the usual one used for the most superstars:
Had Jackson performed these shows, AEG would have made significant revenue on food and beverage sales, a percentage of merchandise sales that could have totaled up to $15 million and the rental fee that AEG Live would account for to its corporate parent. Phillips declines to release terms of the deal with Jackson, but he says it was better for AEG than the 95%-5% split most superstars receive.
So this time they had better terms for themselves even as compared with similar deals with other stars. As if there are any other stars like Jackson. And if those terms were better for AEG it means that they were worse for Michael. And they admit it themselves.
I hope that all of the above is providing the necessary background for the stories we hear now from the AEG people and will cut some paths in the jungles of their lies. What we need to be on the lookout for now is information on who was responsible for the production costs. If the Jacksons lawyers manage to prove that those costs were never Michael’s responsibility it will not only dot all i’s and cross all t’s in Murray’s case, but will turn AEG into the epitome of lies, fraud and deception.
But we still need to go a long way to be able to learn the whole truth about what they did to Michael.