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News of week 12 at the AEG trial. AMAZING BUSINESS

July 18, 2013

Here is a summary of July 15-17, 2013 at the AEG trial and the testimony of the Jacksons’ expert witness Arthur Erk who was to estimate Michael Jackson’s earning capacity had Michael been alive.

Arthur Erk is no novice to this business as it was him who was hired by John Branca to assess the value of the Beatles catalog when Michael was planning to buy it. Erk’s estimation was $40mln while the seller estimated it at $49 million.

Arthur Erk said that in this case he reviewed AEG’s contract, emails, budget and other papers including contracts with Karen Faye and Kenny Ortega. Let me note that Ortega’s contract provided for royalties for his part in the tour in case it was taken to various parts of the world and Karen Faye’s contract even stated per diem fees for the countries to which they were taking the show.

Her contract was signed until March 31, 2011 with an option to extend it and this alone meant that Michael’s contract with AEG covered a much longer period than the initial 50 shows until March 2010.

Erk used the average price of tickets from 5 top grossing tours (of other artists as I understand) and estimated it at $108,8. However considering that Michael was the King of Pop the price could have been much higher (and then there would have been no need for Michael to do so many shows to reach the same sum).

Erk’s testimony provides so many figures that I will not even try to go into them and tell you only the one that I managed to grasp – Michael was to earn more than $1 billion after 37 months of doing 260 shows.

At first the number of shows and possible Michael’s earnings presented by Arthur Erk looked stunning to me, then I began to look at them seriously and finally they made me laugh – only not the numbers themselves but the irony of the situation we’ve found ourselves in.

The irony is in the fact that in 2009 it was AEG who was overjoyed by the opportunity to force Michael into a maximal number of shows, and now it is Jacksons’ lawyers who are taking advantage of AEG’s maximal numbers. Instead of disputing the validity and terms of the AEG contract the Plaintiffs decided to take it as it is and are simply turning it against AEG now.

AEG wanted to have a worldwide tour with Michael Jackson and planned at least 186 shows in 27 months? Okay, let it be the basis for the calculation of the number of shows Michael was to do and the money he was to earn following AEG’s own plans.

AEG was forcing Michael into more shows even after December 31, 2011 and set various conditions for him so that he couldn’t get out of the deal? Well, then Arthur Erk will simply add the respective number of shows for the extended period of time and increase their number from 186 into 260.

This way the more shows AEG wanted to have at that time, the higher will be the bill for Michael’s earnings Arthur Erk will present to AEG now. And AEG cannot even remonstrate – in their hunger for money they wanted to eat as much as they could only swallow, so they planned a crazy number of shows and are now reaping what they have sown themselves.

The fact whether Michael could or couldn’t perform this crazy number of concerts is not even the point – what was good enough for AEG then is good enough for the Jacksons’ lawyers now, and if AEG thought that he could perform, it is okay for the Jacksons’ lawyers too. Because the other alternative is even worse for AEG – if they knew that he was frail and could not perform then why did they plan so many shows and make a contract with him at least until December 31, 2011?

The date of December 31, 2011 is stated in the Definitions attachment to the AEG contract and for seeing AEG’s further plans for Michael after that date I suggest looking at two points of this attachment – the Term and the Territory.

The Territory point is simple – it is the whole world. The shows were planned throughout its “major touring territories”:Territory

The Term was a much more intricate business.

First of all this point said that the Expiration date was through December 31, 2011 which means that the contract was to last more than two and a half years after the tour started in July 2009.

But since even two and a half years were not enough for AEG they forced Michael to take more obligations upon himself.  AEG stated that at their sole discretion (without asking the other side) they could extend the contract until they recouped all the advances. This sounds to us more or less okay except that it makes us wonder how was it possible that MJ would be still unable to recoup the advances after 2,5 years of touring?

Brushing aside this confusing thought we go on reading and find that in order to extend the contract and add more shows to the tour the only thing AEG had to do was sending the Artist a simple notice about the extension. The notice was to be sent prior to December 31, 2011.

A couple more sentences down the text and we are also amazed to learn the Artist was supposed to perform all those additional shows regardless of whether AEG recouped all the advances prior to completion of these shows.

So AEG wanted as many shows as possible from Michael Jackson even irrespective whether he owed them money or not…. They simply wanted to bind him with new obligations for the year 2012 and then force him to fulfill them by threatening with sanctions.

In any case the first 50 shows in 2009/2010 were only a start:

Term 1

Could the Artist stop the tour after December 31, 2011? Yes, he could, but not until the additional shows were fully performed.

To stop the tour Michael had the right to send a “buy-out notice” (nice expression) on or after December 31, 2011 while AEG had already set the additional number of shows prior to that date. Thus a one day difference in December 2011 could mean a whole additional year of work for Michael Jackson.

How many more shows was AEG interested in adding to extend the tour “at their sole discretion” ? As many as possible of course, so why are we getting surprised now that the initial 186 shows estimated by Gongaware by the end of 2011 were turned by Arthur Erk into 260? This number is based on AEG’s own projections stated in the budget, emails and contract papers.

Here is the second part of the Term about the notorious “buy-out” notice which sounds to me like the need for Michael to buy himself out of the AEG’ enslavement:

Term2

Let me stress it again – the matter whether Michael Jackson was or wasn’t able to perform this dreadful number of shows is not the point. The point is that AEG thought this number of shows possible and they were intent on making Michael perform all of them.

What can AEG answer to that? That their contract which serves as the basis for this estimation is not valid because it was a cut-and-paste job? No, they can’t say that, because it will make things only worse.

Can they say that Michael Jackson didn’t want to do so many shows? Yes, they can, but their own contract says that the additional number was to be set solely at their choice, without asking for Michael’s permission, and this makes it clear that Michael’s consent never really mattered to them.

Can they say that Michael would have never earned that huge amount of money? Yes, they can, but then they will have to admit that they were going to exploit the biggest star on the planet for more than three years and pay him peanuts for the job, putting hundreds and hundreds of millions earned by him into their pocket.

Now I agree with the Jacksons’ lawyers that closing our eyes on the deficiencies of the AEG contract is a much better strategy than disputing it. You simply take this contract at its face value and turn it against them beating them with their own weapon.

As a result of it we find ourselves in a unique situation where the roles of AEG and Michael Jackson have reversed into the exact opposite from what they were in 2009.

At that time it was AEG who told everyone that the tour would be a bonanza for Jackson, and now it is Jackson’s lawyers who are saying that it was a goldmine.

Faced with the need to pay big damages AEG will probably even tell us some truth now and admit that they were to pay Michael peanuts and were going to grab the remaining billion estimated by Erk themselves – these days money matters to them much more than their reputation which is ruined anyway.

In short all of it is amazing. The parties have swapped their roles and everything is upside down.  Even a Hollywood scriptwriter wouldn’t be able to come up with a scenario like that.

When the Heavens laugh they laugh in a unique way.

Monday July 15, DAY 48

1

Hello everyone. Day 48 of Jackson family vs AEG trial has just concluded. Plaintiffs’ expert witness Arthur Erk was back on the stand.

2

Katherine Jackson was in court for the morning session, but not for the afternoon.

3

Side note: Judge Yvette Palazuelos got a hair cut.🙂

4

Erk explained business management, paying bills, intellectual property.  A master recording is when artist records track in studio, Erk said.

5

Songwriter completes a song, Erk said. A self-published individual will write notes and lyrics, sends to copyright office in Washington D.C.

6

Use license exists whether it is artist on internet who is not signed by a record label or record company, Erk explained.

7

Royalty calculations have not changed, he said, only distribution. Technology advances have changed the industry, Erk testified.

8

Erk: For artist to release song must go to publisher of songwriter or major publishing company to exploit this particular songwriter’s song.

9

The publisher gets 50 cents for every song and artist gets 50 cents, Erk said.

10

He explained the formula radio stations use to calculate and collect over the air royalties

11

In a Print, Folio (printed song material) a songwriter gets 10% of price, Erk testified.

12

In Film, there’s synchronization license to get the right to hear the song in the film. It requires a world wide license.

13

Used to be songwriter gives up right and becomes a member of staff, Erk explained.

14

As Business evolved, biz managers became more savvy, writers wouldn’t give up 100% of copyright, would sell 50% still get co-publishing deal

15

MJ was a tried and tested songwriter and artist from the time he was 5, Erk explained saying he differed from other artists who have died.

16

Panish asked if Erk knows some of MJ’s #1 songs. He responded Beat It, Billie Jan, Man in the Middle, Heal the World, Can’t Stop Loving You.

17

Erk explained that to be a Gold album, it must sell 500,000 copies, Platinum is one million and Diamond is 10 million sales.

18

Erk said he charges normally hour rate of $475. He has worked in a little over 200 hours on this case.

19

The expert has done royalty work for Jackson in mid-80’s. In 1983, he did it for “Thriller,” one of the largest selling albums of all time.

20

“When you have that many sales, there is usually money there, that means they didn’t pay according to the contract,” Erk explained.

21

When MJ’s manager John Branca was pursuing the Beatles catalogue, with 4,000 songs, Erk was hired to determine the value.

22

We call it net publishers share, that is amount publisher is left after paying all co-writers and everyone else, Erk said.

23

Erk: It was our job to go to Robert Holmes a Court, Australian billionaire who owned the catalogue. It was a testing of wills.

24

Erk: We valued catalogue at 40 million. He assessed at 49MM, also didn’t want to give up Penny Lane because he had family member w/ that name

25

The deal got done without that song. Erk said MJ was smart enough to keep his own copyrights.

26

Erk: The average male recording is 75 years. MJ lost 25 years of copyright income.

27

Panish: When someone dies, what happens?

28

The longer you live the longer the copyright goes, Erk said.

29

He assessed areas of touring, the movie was going out on tour, merchandise (t-shits, hats), endorsements (ads, might get signage at arena.)

30

Erk also calculated that MJ would’ve done a thematic show and would’ve earned additional royalties on “grand rights.”

31

Erk described his experience in the business. He’s worked with lots of artists, intellectual property, business management, royalties.

32

He said Bravado is largest merchandising outfit company. Erk examined AEG’s budget, which initially called for 30 “This Is It” shows.

33

Erk reviewed depositions, AEG contract with MJ, picture/development deal that MJ signed w/ AEG, trial testimony, Ortega and Faye’s contract

34

He read emails of AEG’s plans, budgets, handwritten notes of MJ’s; read Ortega’s testimony whether MJ would be successful in film industry.

35

The expert said he saw evidence MJ wanted to do shows in Las Vegas and had intention to record future music.

36

Erk assessed a numerical value for possible losses based on extremely conservative estimates.

37

Panish: When you say conservative analysis, why?

38

Erk: Because I used AEG’s budget numbers that I translated.

39

Erk used several emails from Randy Phillips to show AEG’s plans for future tours. In one, Phillips said MJ sold 750K tickets in 5 hours.

40

AEG prepared budgets. One was at $1.45 exchange rate and another at $1.65, since they used British pounds.

41

Erk said AEG determined what the gross revenue would be for tickets, estimated merchandise sales for shows based on 30 shows originally, not 50

42

O2 arena has 20K seat capacity. They sold 750K tickets for 50 shows. Erk said 1.4% of Great Britain’s population bought tickets for the show

43

Panish: How do you assess ticket prices?

44

Erk: We took the top 5 grossing tours and took average ticket price.

45

Erk showed chart with projections of seats they figured would be sold for MJ touring in Great Britain, Central Europe, Asia, Australia and US.

46

He estimated the actual seat projection to be 12.9 million, out of 5.9 billion people, would generate MJ revenue of $452,155,095.

47

Erk said he didn’t consider MJ’s past tour attendance since MJ said This Is It, it was going to be his final tour; he adjusted the projection

48

Erk said MJ’s albums did “quite fantastically” worldwide, sales doubled and tripled around the world.

49

Erk explained that Tier 1 is what is reasonably assured MJ would’ve done, no speculation, very conservative estimate.

50

Tier 1 are top artists: U2, Madonna, Bruce Springsteen, Bon Jovi, Erk said. “MJ is in a class of his own, King of Pop, no one came close.”

51

Billboard is the music industry magazine, which has a top Box Office for concerts.

52

In the top 25 grossing acts in 2009, Paul McCartney had 10 shows but was 3rd grossing, since he had very expensive tickets and big venues.

53

Only two artists were sold out for all the shows in 2009: U2 and Madonna. Billy Joel and Elton John almost sold out, Erk said.

54

Erk calculated MJ’s ticket price average of $108.18. “He’s the top of the pyramid,” the expert opined.

55

Panish asked if the price could’ve been higher. Erk said AEG did not expect this wild demand.

56

Erk: The demand here was so wild, they could probably sell the tickets for a much higher price and still sold out shows.

57

Total Projected Economic Damages: $1,511,182,374 billion for MJ’s loss of economic earning capacity based on $200 ticket minus MJ’s expenses

58

Total projected income based on $108.18 ticket price: $1,261,745,023

59

Outside the presence of jury, Judge Palazuelos told audience that someone took picture of courtroom and/or jury through the courtroom window

60

She admonished everyone again that no pictures are allowed in the courtroom/courthouse. The windows are now covered, Sheriffs investigating.

61

Judge told jurors they might have to have new procedures to protect them, but judge doesn’t want to discuss that just yet.

62

Erk analyzed five categories: Tour, Merchandise, Endorsements, Vegas shows and Vegas royalties.

63

The assessment was based on the price of ticket sales. The estimate of MJ’s gain was between $1.127 million and $1.511 million.

64

Erk said he’s been in the business for more than 34 years. He said artists always go back to do what they are good at.

65

Erk then calculated Tier 2 category, which is for future earnings for business MJ would most likely do.

66

He said he had MJ on a much reduced tour, period of hiatus, another reduced tour, and decline from there up until he was 65 years old.

67

My belief and perception of AEG executives as well, there’s no other artist like Michael Jackson, Erk opined.

68

Erk projected MJ do 260 shows, average of 2 per week. He said MJ was much bigger than any other artist.

69

Beyonce had a Pepsi endorsement deal of $50 million in 2012. Her most recent tour gross revenue was $119,500,000.

70

MJ’s TII Gross (2009 and 2010) — $638.976.138  Erk did a calculation based on Beyonce’s Pepsi deal and came up with $267,354,032.

71

He added $50 million clothing endorsement and came up with $317,354,032.

72

Erk said he could not compare Beyonce with MJ. “He was the King of Pop,” Erk explained. “There was no other like him.”

73

Projected Income to MJ – Vegas: $269 million. That was for Vegas show after MJ died, where MJ did not have to perform.

74

Royalties, for use of music, would pay 5% of box office: $102 million total.

75

Erk said the calculation in Tier 1 was based on things MJ was reasonably assured of doing. “I tried to err on the low side.”

76

Future Loss: For 37 months $1.127 billion – $1.511 billion; For 48 months $1.462 billion – $1.96 billion.

77

Professional fees: entertainment attorney, business manager and personal manager. Erk calculated MJ would have 20% expense in fees.

78

Future Loss Minus Professional Fees: 10% fee — Range from $1.014 billion to $1.764 billion; 20% fee — range $901,600,000 to $1.568 billion

79

I think their opinion is that there would be no loss of future income, Erk said about AEG economist and accountant expert. Erk disagrees.

80

Panish asked if Erk is familiar with artists saying this is it and returning to tour. “Not to me personally, but I’ve seen in the public eye.”

81

Erk did not calculate how much money MJ could earn making movies. He said he thought it was best left for the jury to decide.

82

Tier 2 is future touring. $373,985, 179 — total projected economic damages for Tier 2, including merchandising.

83

Erk calculated 4 more tours through 2024. Projected Income to MJ — Merchandise $79,407,278.

84

Panish then announced he concluded his direct examination. AEG’s attorney Sabrina Strong did the cross examination.

85

Erk said he spends half of his time doing business management and other half of royalty compliance.

86

Largely, Erk said he made estimations based on touring, but he is not a tour manager.

87

Erk testified he prepared tour budget before. But in his deposition, Erk said tour budget was not part of his responsibilities.

88

Strong said Erk estimated MJ would do 260 shows for TII tour, plus 4 more tours after that. She asked if that wasn’t too much. He said no.

89

Strong questioned Erk’s expertise in tours, endorsements, merchandising, Las Vegas shows.

90

Erk: I relied of what should’ve been an expert, AEG’s numbers.

91

Erk never met Michael Jackson. Strong asked if Erk had personal conversation with MJ about his future plans. He said no.

92

Erk’s firm has spent 650-700 hours for total efforts of all the employees in the company, including his 200 hours, in this case.

93

Strong: Had MJ not died in 2009, you estimate he would’ve gone on tour 3 more years, 4 more tours after that until age 66, correct?

94

Erk: 4 more tours, until age 66, was my professional opinion.

95

The show was called This-Is-It, he was going to blow it out, Erk said, adding MJ planned on earning as much money as he could.

96

Strong: At the time MJ passed away, TII was expected to be 50 shows, correct?

97

Erk: First leg, yes

98

Erk said TII sold 750K tickets in 5 hours, 525K people waiting to buy tickets. “Never done before, never done again,” Erk testified.

99

Erk said he had triple fusion surgery just before giving deposition.

100

Had he lived, I believe he would’ve performed the shows, Erk testified.  “I believe had he lived he would’ve taken the stage.”

101

For his projections, Erk assumed MJ was in good health.

102

Strong: Did not consider MJ was taking Demerol in a regular basis?

103

Erk: No, I did not

104

Erk said he didn’t consider MJ’s use of Propofol, drug abuse. “I’m not aware he was a drug abuser” Erk said; didn’t review medical record.

105

Erk said he would not have changed his opinion if he knew MJ was using Propofol.

106

Strong asked Erk if he knew MJ was ordered to pay $5 million in breach of contract for backing out of the Millennium Concerts.

107

Marcel Avram was the promoter. “And he also spent some time in jail,” Erk said. Strong showed a judgment Avram v MJ for breach of contract.

108

Did Mr. Jackson break the Jan. 14, 1999 contract by failing to perform the Millennium Concerts? Jury answered “Yes.”

109

There was $5.3 million in judgment for breaching contract. Erk said he didn’t even know about this judgment, didn’t use it in his opinion.

110

Strong laid out several lawsuits MJ had for failing to perform. Erk said he had not reviewed any of the prior lawsuits.

111

Strong: Did you take into account any of his prior failed projects?

112

Erk: No. He needed to work

113

Erk said he didn’t consider the fact MJ didn’t tour/perform in 12 years or Prince’s testimony that his father didn’t want to tour anymore.

114

Strong played KJ’s deposition. She said she was a bit surprised with MJ going on tour since MJ didn’t want to do Moonwalk on stage at 50.

115

Strong asked if Erk’s opinion was based on pure speculation. Erk said it was not speculative, he had reasonable assurance MJ would perform.

116

Strong: Mr Erk, are you aware Mr. Jackson generally spent more than $570K a month to live between Jan 2000-June 2009?

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Erk: I don’t know that

118

Erk relied on a memo to come up with MJ’s monthly consumption. It has handwritten notes amounting to $570k.

119

Strong said there’s testimony MJ was a heavy traveler, used charter planes and stayed at the finest hotels, would take over entire wings.

120

Strong also said MJ spent $435,000 on air fare and hotels in two months period in early 2000s.

121

Judge adjourned session until 9:30 am tomorrow. Erk is back on the stand, only morning session scheduled for tomorrow.

122

After jury left, Panish said he wanted to put on the record that AEG didn’t know if the $5.3 million judgement was ever reversed on appeal.

123

Panish asked if he should present all the lawsuits AEG has been a defendant, like the boy who fell and died at Staples Center.

124

I certainly hope it is final judgment, judge said, adding she doesn’t want to have to undo anything. More on that tomorrow.

125

Attorneys discussed future calendar, it looks like jurors are having problems and need time off.

126

Apparently in August and September, there will be a lot of days off. There are 3 weeks with only 2 day of session scheduled.

127

Judge said mid-September has school starting, “it is just the nature of the beast.”

128

Panish said he will try to finish this week. Witnesses to come: Erk, an economist, Dr. Brown, Katherine Jackson and maybe Tom Barrack.

129

Judge told defendants’ attorneys to be prepared to start their case in chief on Monday.

130

To see Katherine Jackson’s deposition, watch @ABC7 and go to http://www.abc7.com . We hope to see you tomorrow! Good night everyone!

Tuesday July 16 DAY 49

131

Day 49 of trial has just concluded. Here’s Jacksons’ attorney Brian Panish speaking with our reporter. pic.twitter.com/K7OcHkFyZe

132

Here’s AEG’s attorney Marvin Putnam. Watch complete coverage on @ABC7 and http://www.abc7.com  pic.twitter.com/ebGPSW4cZU

133

Plaintiffs’ expert witness, Arthur Erk, back on the stand. Sabrina Strong, attorney for AEG, resumed cross examination.

134

Katherine Jackson arrived late. She is wearing a graphic print jacket, bold black leafs on white background.

135

Strong: AEG Live never projected MJ would’ve earned anything close to the $900 million you estimated, correct?

136

Erk: That’s correct

137

AEG Live never projected MJ would do 260 shows, Strong asked. Erk agreed.

138

Strong talked back about consumption, which is the amount of MJ’s expenses. She said MJ was $400 million in debt when he died.

139

Strong asked if Katherine Jackson’s Hayvenhurst home was about to go in foreclosure. Erk said yes.

140

The reason he was going on tour was to get himself straight, earn money to take care of his family, Erk said.

141

Historically, MJ spent more money than he earned, Strong said. Erk said that based on the accountant’s testimony, yes.

142

Strong said Siegel noted MJ had substantial income coming in and higher expenses going out.

143

Barry Siegel is one of MJ’s former accountant.

144

Strong asked if Erk knows why Siegel quit his job with MJ. Jacksons’ attorney objected to the form of question.

145

Strong then said assuming Siegel quit because MJ couldn’t control his spending, if that would’ve affect his consumption numbers. Erk said no

146

Strong: And that doesn’t account for million dollars shopping spree?

147

Erk: I don’t call it consumption, I call it fun money

148

Strong asked if MJ spent $20 to $30 million a year more than he was earning. Erk said yes.

149

Strong said $1 billion Erk estimated didn’t include repayment of MJ’s debts. (Implication is you can’t get damages for money to repay debts)

150

Erk said his job was not to consider whether MJ was going to repay his debts. He was hired to estimate MJ’s earning capacity had he lived.

151

Strong asked if Erk knows how much money MJ earned in 2001, 2002, 2003. He said no and that it had no relevance to his assessment.

152

Erk said he reviewed documents attached to depositions explaining MJ’s yearly earnings and consumption.

153

Erk said the estimate of cost of his firm’s work in this case is $300,000. He didn’t review thousands of pages, eliminated all unnecessary.

154

Erk explained he’s been doing this for 34 years and it would’ve taken an untold amount of man hours to go through all the documents.

155

Erk: In my and my partner’s experience, we are very good in judgments. We boiled down what we thought was important for the calculations

156

Strong said Erk’s opinion assumes that MJ would do something he had never done before.

157

Strong: The artist usually had the final decision?

158

Erk: Yes, they have final say but consult with the professionals that surround them

159

Strong showed Erk’s overview of the 260 shows the expert projected MJ would do had he lived, within 37 months.

160

Strong questioned Erk about his 260 tours estimates. She reiterated there’s no AEG document saying MJ would ever do 260 shows.

161

Erk said there was testimony that MJ could’ve done a 48-month tour, which would increase revenue in approximately 30%.

162

The increase would be based on higher ticket sales and merchandising. He didn’t include endorsement, which could be higher too.

163

Erk said he didn’t calculate how many more shows would be required to fulfill a 48 month tour.

164

Using the simple 30% increase calculation, there would be an additional 78 shows, totaling 338 shows in 48 months.

165

Question to followers: Do you think MJ wanted and/or could have done either 260 shows in 37 months or 338 shows in 48 months?

166

The expert said Randy Phillips, a top AEG Live executive, said in an email they would probably do a four year tour.

167

Strong asked Erk if MJ’s record high of number of shows was 123 shows for “Bad” tour in 1987 when MJ was 29 years old. He said yes.

168

Dangerous tour: began in 1992, MJ was about 33 years old, had 73 shows. Strong said Gongaware testified it was about 70 tours.

169

HIStory tour, 1996, MJ was 38 years old — 82 shows. Total of 275 shows if added all together.

170

Strong: Now you have him in one tour, 12 years later, at age of 50, doing 260 shows?

171

Erk: Yes

172

Strong said Erk calculated MJ would gross in “This Is It” more than 10 times he ever grossed before in a tour.

173

MJ’s highest gross tour is “HIStory” — $165 million for 82 shows. It ranks number 26 on the highest grossing tours of the all time.

174

Even though HIStory was the highest grossing tour for MJ, he didn’t take home any money, according to Paul Gongaware’s testimony.

175

Strong: You estimated gross of $1.5 billion for 260 shows and the highest you know MJ ever did was $165K?

176

Erk: Yes

177

Strong: And is that conservative?

178

Erk: Yes

179

Bad — $125 million gross. “I can tell you that show was fantastic!,” Erk opined on Bad tour.

180

Strong asked if Erk’s projection is inconsistent with MJ’s tour history. Erk said the show was called This Is It, his final extravaganza.

181

I packed a lot of shows in to go out with a bang, Erk said.

182

Regarding the ticket numbers, Strong said that for the 260 tours, Erk’s assumption was that it would sell approximately 13 million tickets.

183

Strong: Just like with the number of shows, MJ never sold anywhere near 13 million tickets, correct?

184

Erk: Yes

185

Number of tickets sold in “Bad” was close to 4.5 million. “HIStory” tour sold about the same number of tickets, 4.5 million.

186

Erk said he doesn’t think the child molestation trial would have any impact on whether people would attend his show.

187

Strong asked if MJ never agreed to do more than 50 shows. Erk said he doesn’t know if he agrees with that.

188

Erk said he spoke with Prince on Saturday and he said MJ told him they were going to Asia.

189

Strong asked if people had issue with MJ dangling a baby over the balcony of hotel. He said for a short time yes, but not to affect attendance

190

Strong: You estimated Mj would’ve sold 100% tickets for all the show?

191

Erk: Based on the huge, excessive demand, yes

192

Erk said MJ needed to work, needed the money, so had incentive to perform all shows.

193

MJ was on a category of his own, Erk said, he was the King of Pop, could not be compared to any other artist.

194

Strong: You had MJ selling out Rose Bowl three times?

195

Erk: Yes

196

MJ never performed at the Rose Bowl, Strong said. Panish objected saying MJ performed at Superbowl half time there and it was sold out.

197

Strong asked if Erk used the same price for tickets in all shows, in different countries. He said yes, just adjusted inflation.

198

There are a lot of wealthy people in India, Erk said.

199

Strong asked if Erk knew the stadium in Salt Lake City was for sports events only and that MJ would not be able to perform one show there.

200

Erk said if there was no negotiation, yes, he would not be able to perform there.

201

Judge adjourned session until 9:45 am PT tomorrow. Erk to resume on the stand. Strong estimates another half day of cross, judge gave 2 hrs

202

Jacksons’ attorney still wants to finish his case by the end of the week. There’s no afternoon session today.

203

Katherine Jackson will probably be plaintiffs’ last witness. It’s still unclear when the matriarch will take the stand.

204

After session ended, attorneys for both sides had a heated exchange of words in the hallway when they were talking to media and fans.

205

Both attorneys were shouting to each other, court clerk asked them to knock it off, called sheriffs.

206

After that, both attorneys gave us interviews about their views of the case. Watch complete coverage @ABC7 and http://www.abc7.com

207

We hope to see you tomorrow for complete coverage of the trial. Have a nice one, everybody. Court begins at 9:45 am PT tomorrow.

Wednesday July 17, 2013. DAY 50

On this day AEG’s lawyer Sabina Strong finally did what was inevitable in this case – she told us the real sum AEG was planning to pay to Michael as a result of performing 50 shows.

This sum was $22 million.

  • “Net Income, amount of money AEG Live projected MJ would take home had he performed all 50 shows at the O2 arena: little over $22 million”

Do you remember that AEG claimed that they were dividing their profit in the ratio of 90/10 –  90% as Michael’s share and 10% as AEG’s share?

And now we get first-hand information from AEG themselves that out of the $95 mln. for the tickets sold Michael was to get only $22 mln. which is less that one fourth of the whole sum collected for the tickets.

However even the balance of $73 mln. was not the final sum due to AEG. The real revenue was much bigger as it included merchandising and money from the 3D film which amounted to $37mln according to their preliminary estimations made in May 2009:

estimation

If we add up $73 mln and $37mln AEG’s share will come to $110mln, while Michael’s share will still remain at $22mln (in case AEG did not add some per cent to Michael for the merchandise).

So the real ratio in AEG’s business with Michael Jackson was planned to be roughly 20/80. In other words 80% of the money made for them by Michael was to be taken by AEG. 

In short it was going to be a big fraud.

Now we know how they make their billions, don’t we?

Wednesday July 17, DAY 50

208

Hello form the courthouse in downtown LA. Day 50 of Jackson family vs AEG trial is currently underway.

209

Jackson’s expert witness, CPA Arthur Erk, is back on the stand for cross examination. Sabrina Strong, for AEG, doing the questioning.

210

Outside the presence of the jurors, judge told everyone to follow the rules of the court and that things are getting out of hand.

211

This comment was made in light of the heated exchange between the attorneys in the hallway yesterday while talking to the media and fans.

212

Judge called attorneys for both sides into her chambers for a sidebar.

213

Earlier today, the court sent email to all media members that interviews are to be conducted only in approved areas or outside the building.

214

Yesterday, after session concluded, attorneys for both sides were in the hallway speaking to the media and got angry at each other.

215

Jacksons‘ attorney Brian Panish and AEG’s attorney Marvin Putnam shouted words to each other. Sheriffs were summoned to calm them down.

216

When jurors took their seats, Judge Yvette Palazuelos told them they have a better estimate for end of trial to be in mid-September.

217

Judge said attorneys are trying their best to expedite things, but with some days off and lots of witnesses estimate is stretched further.

218

Back to testimony. Strong asked Erk about sponsorship/endorsement. He estimated MJ would get $317 million in the “This Is It” tour.

219

Erk estimated clothing endorsement to be $50 million and $217 million based on a calculation of a Pepsi deal Beyonce had in 2012.

220

Erk said MJ’s clothing would become a fashion statement and that people would want to wear it. Thus the demand.

221

Strong questioned whether Erk really thought MJ, at 50 years old, would be a fashion icon for young audience. He said yes.

222

She then asked if the $50 million figure was speculation. Erk said no that he had reasonable belief shows would happen, clothes would sell.

223

Speculative is hope, Erk opined.

224

Erk came up with $50 million for clothing endorsement based on earlier deal of $28 million plus inflation/financial adjustments to year 2009

225

Erk said he relied on news reports regarding Beyonce’s Pepsi deal. He didn’t actually see the deal himself.

226

Beyonce’s most recent gross was close to $120 million. The Pepsi deal was, reportedly, $50 million, which is almost 42% of the tour revenue.

227

Strong: Do you know if anyone ever used your methodology to estimate endorsement deal?

228

Erk: No

229

Strong inquired Erk whether he knows any other artist who has endorsement being 40% of gross revenue.

230

Erk said that most endorsement deals are private, Beyonce’s was the only one that was made public through the media.

231

Strong questioned whether Erk always trusted the media reports to be true. He said no, but no one disputed Beyonce’s endorsement number.

232

Strong asked if Erk knows for a fact that Beyonce’s endorsement deal being 42% of gross revenue is true.

233

If the reported figures are correct, the 42% is correct, Erk said.

234

I answered before I didn’t see the contract, my firm doesn’t have Beyonce, I couldn ‘t confirm the deal.

235

Strong asked if Erk thought MJ’s image was rehabilitated in June of 2009.

236

What I do know as fact is that the demand was there, Erk said. “The demand was there, I think that is unquestionable.”

237

Strong: Was his image rehabilitated by June 2009?

238

Erk: It wasn’t consideration on my part since it sold so many tickets in a short time

239

I think AEG was more concerned with people in the US than worldwide, Erk said.

240

Strong: So my question was, do you think MJ’s image was rehabilitated to get an endorsement deal?

241

Erk: If you need a yes or no answer, the answer is yes

242

Erk: By evidence of selling so many tickers, I have no other way to come to that conclusion, but based on the facts of tickets sold, yes

243

Strong: You are not aware of any endorsement or sponsorship deal for TII tour being in place when MJ died?

244

Erk: No

245

Strong asked if MJ’s molestation accusations and trial affected his estimation in the endorsement deals.

246

The outstanding, unprecedented demand for tickets took care of that, Erk said.

247

Going back to Beyonce, Strong asked if Beyonce ever had negative publicity. “As far as I know, no,” Erk responded.

248

Strong asked Erk if he relied on AEG’s own budget to come up with his estimations. He said yes.

249

AEG’s projection of what MJ would take home was a little over $20 million, according to the budget Strong showed.

250

Net Income, amount of money AEG Live projected MJ would take home had he performed all 50 shows at the O2 arena: little over $22 million

251

Alternative budget had projection of a little over $30 million, Strong showed.

252

Strong said the range AEG Live was projecting MJ would take home for performing all 50 concerts at O2 arena was between $22 and $30 million.

253

AEG projected 750,000 tickets sold and didn’t estimate revenue of merchandising.

254

AEG did not project a single dollar in endorsement in this budget or any other budget that Erk saw.

255

Strong showed a side-by-side demonstrative of AEG’s and Erk’s projection.

256

Erk’s projection: Approximately 13 million tickets sold, 260 shows, merchandising and endorsement estimate.

257

Net revenue to MJ, 260 tour $460 million

258

Merchandising $121 million

259

Endorsements $317 million

260

Net number of $890.5 million

261

Erk said he relied on email exchanges from September 2008 that included records, movies and others, such as worldwide tour.

262

It shows they clearly intended to take him around the world, Erk said about the email on the plan, mentions a net to MJ of $132 million.

263

Erk said AEG had no idea of the demand and when the shows were sold out in a matter of hours they knew they could take the show everywhere.

264

Strong: Do you know any tour that ever grossed that much?

265

Erk: No. This would’ve been world record breaking tour

266

Strong: You testified in your depo you have no idea whether MJ would be successful at making movies, correct?

267

Erk: That’s correct

268

Strong asked if Erk recalls Katherine Jackson saying MJ didn’t want to do the Moonwalk after he was 50. He said yes.

269

Strong played Paris Jackson’s deposition regarding future plans: Paris says her dad wanted to relax, didn’t want to tour anymore.

270

However, Paris also said it was a world tour. “How did you know that?

271

Because he told us we were going around the world,” Paris said.

272

Strong showed demonstrative with Erk’s projection for MJ’s future tours:

273

40 shows at 60 years old

274

50 shows at age 63

275

45 shows at age 66

276

Erk acknowledged MJ did 275 shows between 20-50 years old.

277

Strong: So you had him do 455 shows over 5 tours until the age of 66?

278

Erk: 260 shows were reasonably certain to happen, 195 shows was an estimate based on my professional opinion.

279

Strong finished her cross examination. Judge broke session for lunch, Jacksons attorney did re-direct in the afternoon.

280

Erk said AEG’s experts in the same field as his charge more than him for the work.

281

Katherine Jackson not present in court in the afternoon.

282

Panish: Has Mr. Jackson ever been proved guilty of any allegations that AEG mentioned?

283

Erk: No

284

Panish asked if Phillips, Anschutz, Gongaware did not enter into an agreement with MJ due to concerns of the allegations?

285

Erk: They entered into the 3 year tour contract as well as movie deal

286

Panish: Was there any emails AEG, Philips, Gongaware saying they didn’t want to make money off of MJ due to the allegations raised?

287

Erk: I didn’t see anything to that effect.

288

Panish asked Erk if Tiger Woods had some things that could be viewed as negative allegations against him. He said he believed so.

289

As to Tiger Woods, Erk said in 2012, he believes it was reported endorsements went back up to $70 million.

290

Panish: Alex Rodriguez — has there been allegations against him regarding certain activities?

291

Erk: Yes, surfacing every once and a while

292

Panish: How are his endorsements?

293

Erk: He’s doing fairly well

294

Regarding Beyonce and her endorsement deal, Erk said the calculation he made came up to 18,5%, not the 42% Strong said.

295

Panish asked if MJ’s past and the allegation have anything to do with how much money MJ could earn.

296

Erk said he based his opinion on AEG’s projection and “if it was good enough for them, it was good enough for me.”

297

AEG spent money before even getting to London, Erk testified.

298

Panish asked Erk to assume Phillips estimated MJ would make $50-100 million for London dates if it was consistent with his opinion. He said yes

299

Panish: Assume Phillips said MJ’s earnings could rise to 500 million if he did a world tour? Is that consistent with your opinion?

300

Erk: Yes

301

As to future tours, Erk said Paris testified in her deposition (played earlier today) that MJ told her they would tour worldwide.

302

Erk said Ortega’s deposition and testimony talked about take this tour on the road, to the world, and that MJ would like for him to go too.

303

Erk said Ortega discussed going to India and Japan with MJ.

304

Panish asked if MJ and Ortega working further together. Erk said MJ wanted to ultimately produce movies.

305

Erk said AEG had the resources to find out about MJ’s financial issues and there’s no reason to believe they didn’t know about MJ’s problems

306

Erk said he didn’t focus on MJ’s health because AEG signed the contract and began spending money, which determined the tour would go forward

307

Panish asked if Erk saw evidence AEG was concerned with MJ’s health. Erk said only that he passed a physical, was healthy and ready to go.

308

Panish: Did Phillips make statements as to whether MJ could perform a worldwide tour?

309

Erk: Yes

310

Panish said AEG had questions of Demerol, baby, allegations, trials so he wanted to clear whether there was demand for the tour.

311

Panish showed Gongaware’s testimony when he talked about the high demand for MJ’s tickets.

312

Panish: Did you take that into consideration as to whether or not there would be demand for MJ’s tour?

313

Erk: Absolutely

314

Panish asked why he took Phillips and Gongaware’s testimony into consideration for his projections and calculation.

315

They were the ones selling the tickets, they should be in the know, Erk said.

316

Panish: Was MJ popular and could’ve sold tickets?

317

Erk: Absolutely

318

Panish read a lengthy testimony from Randy Phillips when he said they were all surprised with the demand for tickets and standby people.

319

Strong objected, and added that there’s no question about the demand for the 50 show.

320

Panish: Is there any question in your mind AEG not only believed they could sell out in London but worldwide?

321

Erk: No question

322

Panish: Would you describe the demand for MJ’s ticket a hope?

323

Erk: No

324

Erk went through the email describing what Phillips’ plans were.

325

“If London goes smoothly, we could migrate this show to the brand new, state-of-the-art stadium in Berlin, the O2 World,” Phillips wrote.

326

Email from September 2008 plan: In July 2009 — If all goes well, we embark on a well routed and spread out worldwide tour taking advantages of the gigantic secondary ticket market, massive sponsoring opportunities subject to how well we have rehabilitated him and very lucrative “exotics”.

327

Mick Jagger is 69 years old, lead singer of the Rolling Stones. He just finished up shows that AEG promoted, Erk said.

328

Keith Richards had a long history of heroine problems, Erk said. He’s also almost 69 years old and is touring, doing quite well.

329

Barbra Streisand is 71 and just finished up shows for AEG as well, Erk testified. Erk said Streisand grossed more than $18 million.

330

Panish showed a spreadsheet with all MJ’s monthly expenses. The annual consumption based on actual receipts for MJ — $7.6 million.

331

Erk said he used $570K/month, which would work out to $6.7 million. He used higher monthly figure, but less annually.

332

For professional fees, Erk said he considered 10-20%, anywhere between $3-5 millions.

333

Panish: Does people usually lend money for people who can’t pay it back?

334

Erk: No

335

Erk said MJ had assets to secure loans. Erk explained how the loan of significant amount of money works.

336

Erk said MJ did not have working income in ten years.

337

Panish: If you don’t have work income, is it possible you’re going to spend more than you earn?

338

Erk: Most likely

339

Panish: What was it that secured the debt?

340

Erk: Primarily his Sony/ATV catalogue

341

Panish: Did you just make-up this world tour idea?

342

Eark: No

343

Here’s a first-draft look at worldwide MJ tour.

344

Email from Gongaware: MJ first draft worldwide tour projection

345

Right now we project 186 shows… Net to Mikey $132 million. On paper, it starts Jan 9 and runs thru April 2011... It’s a big number, but this is not a number MJ will want to hear. He thinks he’s so much bigger than that. Talk in terms of gross receipts, he suggested.

346

186 shows over 27 months — Gongaware projection

347

260 shows over 37 months — Erk projection

348

Erk said AEG had 1.59 show per week in their projection and Erk had 1.60 shows per week in his projection.

349

Panish showed a document Gongaware attached to his projection with a list of tentative venues all over the world.

350

World tour included: Berlin, Hamburg, Munich, Paris, Zurich, Milan, Johannesburg, Dubai, Japan, India, Australia, New Zealand

351

More tours:, South America, US starting in Florida, Texas, New Orleans, California, Denver, Utah, Chicago.

352

Panish said this is a document prepared by Gongaware in addition to the 50 shows in the O2 arena.

353

There was a projection of $3-$10 million for private shows. Except with the private shows, Erk says his calculation was similar.

354

Panish asked if shows in AEG’s projection were carried over to 37 months, how many shows would that be?

355

Erk: Almost 260

356

Panish asked why 37 months. Erk said contract between MJ and AEG was 3 years, and he added a month.

357

Panish asked Erk is he saw multiple AEG documents detailing plans for worldwide tour. He said yes.

358

Panish: What are the figures AEG used for worldwide tour?

359

186 shows for 27 months

360

260 shows for my budget, 37 months

361

Erk said that prorating the same amount of shows in 37 months, it is almost 260 shows.

362

AEG projection is $132 million in the low end, $150 million in high end for less shows, less months, Erk said.

363

Erk said he used stadium shows and bigger arenas because of unprecedented demand.

364

Email from Phillips to Leiweke on April 15, 2009: He is happy and they picked all male and female dancers. I intend to shove those 50 shows up Irving’s and Rapino’s asses and march on to do another 3 years of a world tour.

365

Email Thomas Overseen saying he had a client with serious interest in MJ’s tour in India.

366

Phillips answered: Thanks, Thomas. MJ will definitely heading your way

367

Panish asked Erk if he reviewed this email to determine if the tour in India wasn’t just a hope, but plan. He said yes.

368

Erk said Phillips was striking deal with Bravado to rent empty store in Oxford Circle to offer nothing but MJ merchandising.

369

Panish asked if Erk believed it would help sell the merchandise. He said yes.

370

In re-cross Strong asked if Erk saw the June 2009 AEG budget and how much money AEG projected for the sale of merchandising.

371

Erk said he saw it and believes it was maybe in the $10 million range or thereabouts. Erk projected $121 million, the expert said.

372

Strong: And the merchandise projection AEG had was between $8 and $10 million, right?

373

Erk: Yes, that’s what was in the budget

374

Strong pointed in the email where there was an indication for “a” date in India, not 60 dates in India like Erk projected.

375

Strong: AEG Live had a lot of hope after selling the show?

376

Erk: I think it’s more than hope

377

Strong: Wasn’t AEG hopeful for a successful tour?

378

Erk: You’re always hopeful

379

Email from Phillips to Nanoula in June 2008 detailing the plans for MJ’s future: Richard, these are just my off the cuff ideas…

380

The email mentions 12-14 new songs and then release of series on new singles. Erk said he doesn’t know that MJ finish them.

381

Strong: Randy Phillips acknowledged that all had to go well, didn’t he?

382

Erk: It appears that way

383

Strong asked if Phillips hoped he could have massive sponsorship opportunities if all went well. Erk said yes.

384

Erk said he has no knowledge of what AEG tried to do to get sponsorship opportunities for the tour.

385

As June 2009, Strong asked if Erk saw any evidence or sponsorship in place before his death. He said no.

386

Strong talked about the September 2008 email with $132 million projection.

387

She asked Erk if the email was written without knowing whether MJ would ever agree to it. He said yes.

388

Back to India, Gongaware projected 3 shows plus one private show. He contemplated 8 shows in Japan plus one private.

389

Strong said Gongaware’s projection was not near what Erk calculated.

390

Email from Phillips to Leiweke: Colony is receptive but skeptical like us as to whether MJ will really work.

391

Strong: No one at AEG projected the numbers you projected, correct?

392

Erk: That’s correct

393

Strong: MJ agreed to only 50 shows at the time he passed away in June 2009, isn’t that correct?

394

Erk: Yes

395

Panish in re-re-direct: What did he tell his children

396

Erk: We’re going on a worldwide tour

397

He took his children wherever we went, Erk said

398

Panish asked if selling out in a matter of hours is going well. Erk responded “Yes and then some.”

399

It can always go better, but it was fantastic, Erk said.

400

Panish asked if Gongaware, as good promoter and with the sales he saw, would want more shows. Erk said he would’ve done as many as he could.

401

Next witnesses: Dr. Emery Brown (on Propofol) and economist Peter Formuzis

402

Erk is excused. Judge adjourned session until 10 am PT tomorrow.

403

During arguments late in the day, judge asked AEG if they intend to call Dr. Murray to testify. Putnam responded he has no intention.

404

For all the latest, watch @ABC7 and visit http://www.abc7.com . We hope to see you tomorrow for complete coverage of the trial.

405

Here’s a link to today’s story with Paris’ deposition: http://abclocal.go.com/kabc/story?section=news/entertainment&id=9176665

As to the number of shows AEG was planning for Michael Jackson we can make our rough calculations ourselves.

The article below quotes the details of Jackson’s deal with AEG and says that Michael could make $400 mln. for the four years of touring the world. The Wall Street journal estimation of his earnings was $30mln to $50mln for 30-50 shows which roughly made $1mln per show.

But if one show was to pay Michael $1mln. (according to the Wall Street journal) how many shows was AEG planning for Michael if they promised him $400 mln all in all?

400 shows?

No matter how much money this suit boils down to isn’t this AEG business an eye-opening experience for all of us?

March 6, 2009

Michael Jackson Could Make as Much as $400 Million from Comeback Concerts

Yesterday, Michael Jackson engaged in a rather awkward fan conference that was assembled to announce his run of dates at London’s O2 Arena. Today comes word that Jackson could make a boat load of money from the dates–as much as $30 to $50 million— and if he decides to take the shows international (which he reportedly is considering), he could make upwards of $400 million over the next four years. 

The Wall Street Journal has the details of Jackson’s deal with AEG Live, which is planning a similar run of dates for Jackson in Asia and North America (which couldn’t go down until 2011, for unexplained reasons).

Depending on how many dates he adds, Mr. Jackson’s take from the London concerts alone could be between $30 million and $50 million, according to people familiar with the matter. Tickets to the London performances are to go on sale, via an online lottery system at MichaelJacksonLive.com, next Wednesday for £50 ($70) to £75 ($105) each.

Mr. Jackson would then have the option to add more dates in Europe, Asia and finally North America. But he is not committed to play any shows beyond the original 10, and would in any event not reach the U.S. before 2011. “He has been the biggest star in the world and it’s time for him to get back on the stage,” said Randy Phillips, president and chief executive of AEG Live.

http://www.prefixmag.com/news/michael-jackson-could-make-as-much-as-400-million-/26683/

*  *  *

It is Friday July 19th and Michael’s mother is to testify today. Sina has sent us wishes for Mrs. Jackson which I am posting here on behalf of many of us:

We wish Mrs Jackson courage, strength and spiritual guidance to stand her ground today against AEG .

The love for your son, your search for justice and clarity what happened to him and the heavy but honorable task you were given to guide Michaels children for him will see you through.

There will be attempts to distract you, to bring you down, to discredit you, like they did to your son.

But as T. Mesereau said, you have morality on your side.

You have the love and support of your family, friends and the silent majority of fans who have been loyal to you from the first time we heard of your family nearly 50 years ago, and still today.

We are sure that members of TeamMichael, who we thank for their hard work, will be there to show their support for the part of the fans who want justice, who believe in the righteousness of the case and in you.

Let me also add that we shall be praying for you…

17 Comments leave one →
  1. July 10, 2014 10:45 am

    —–
    I managed By chance to hit upon a video made of Dr. Emery Brown´s video deposition.It was 2 hrs long and they cut you off after 30 min or so.He is awesome. You can look him up on wikipedia to get his
    backgraund.He also worked with Dr. Czeisler whom we know ,I think from murray´s trial.Dr. Emery is in class By himself.In fact there has been many eminent doctors in the Murray trial and now Dr.E.Brown
    By video in the AEG trial.Those are the doctors or their teams Michael should have had while alive.It is laughable when Randy Phillips calls Murray one of the top 10 in America.Maybe the bottom 10 would be more correct.-My Computer was not very operational during that time so I have missed out on very interesting things.I
    regret that they will not show the whole tape ,just about 25%.He is
    that good so I could sit spellbound By his knowledge for hrs.He made it very clear that there is a difference between sleep and anestesia.And he is also an expert on circadian rythms and sleep.
    So sad that these true scientist came to Michael only after his death.

    Like

  2. Jan permalink
    August 2, 2013 6:15 am

    some of these comments underneath article aint good:

    http://perezhilton.com/2013-08-01-do-you-think-michael-jackson-was-a-child-molestor

    Like

  3. July 23, 2013 5:20 pm

    “I remember the almost deafening silence during Julie Hollander’s and Shawn Trell’s testimony and revelations. I will measure their non-reporting of earlier pertinent facts against what will be reported once Defense witnesses take the stand.” – dialdancer

    Exactly.

    Dial, and do you remember the media deafening silence about a slap given to Michael by Randy Phillips?

    Like

  4. July 23, 2013 4:09 pm

    My belief the majority of Mainstream Media possessed any honesty was low even before June 2009. They have done nothing to change it. If anything, these past weeks have only reaffirmed they are not to be trusted. Their mission is not to inform in an objective manner or give us accurate and verified information. It is to uphold the agenda of whomever has the biggest check book which supports their networks.

    I remember the almost deafening silence during Julie Hollander’s and Shawn Trell’s testimony and revelations. I measure that silence against agencies like NBC’s & Contact Music’s accounts of Mrs. Jackson’s testimony last week. How many Mainstream published the Mirror’s tripe on their back street “Hollywood Gossip” sites to promote that slander while hiding their faces?

    I will measure their non-reporting of earlier pertinent facts against what will be reported once Defense witnesses take the stand.

    Like

  5. July 19, 2013 2:57 pm

    Katherine Jackson is testifying now. At some point they played Paris Jackson’s video deposition. I can’t watch it due to my slow Internet but here is the link for you to see it:

    http://edition.cnn.com/video/?/video/showbiz/2013/07/18/evexp-hln-alan-duke-paris-jackson-deposition.hln

    Like

  6. July 19, 2013 2:33 pm

    Guys, I’m currently reading the tweets for Day 51 and Dr. Brown’s testimony and found that according to him the very latest studies of Propofol show that it does release dopamine which gives the feeling of euphoria. And if it does, it means that a person can form a dependency on it (unfortunately). However the study was made in rats, not humans.

    Well, nicotine also releases dopamine and forms a dependency, so it is the amount of it that matters:

    July 18th Trial Dr. Brown’s video deposition

    Day 51 of Jackson family vs AEG trial. Katherine Jackson not in the courtroom today.

    Plaintiffs called Dr. Emery Brown by way of video deposition. Dr. Brown is an anesthesiologist and practices in Boston, Massachusetts.

    He detailed his extensive background in the medical field. Dr. Brown is a practicing anesthesiologist, works at MIT in Massachusetts.

    Among many of his current jobs, Dr. Brown is an Associate Director at Institute for Medical Engineering Science at MIT.

    He’s also on the faculty of Sleep Medicine Dept at Harvard, did his medical thesis under Dr. Czeisler, who testified earlier in the case.

    Dr. Brown is board certified in anesthesia. He belongs to several professional societies and publications in the field.

    The first 20 minutes of Dr. Brown’s testimony was detailing his qualifications.

    He has written around 140 or so articles for professional journals on medical matters.

    Dr. Brown billed $1,000/hour and asked to donate the funds to Mass General Hospital. The total: $75,000 donated to Mass General Hospital.

    Dr. Brown has given depositions before, but has not testified in court.

    Anesthesia can be different, Dr. Brown said: general anesthesia/sedation and regional anesthesia.

    In MJ’s case, it’s a general anesthesia/sedation case.

    Dr. Brown: General anesthesia consists of 4 behavior and physiology status: unconscious, analgesia (no pain), not moving, amnesia.

    Dr. Brown said the heart rate, blood pressure, breathing and temperature are under control in order to go into surgery.

    “General anesthesia is a type of coma, it’s a reversible coma,” Dr. Brown said.

    Dr. Brown said coma is a state where patient is unable to receive and respond to stimulus.

    He said you give drugs to induce coma, more to maintain it during the surgery, then reduce to have patient come back.

    Dr. Brown said there’s tendency to call general anesthesia sleep, but it’s not sleep, you wouldn’t be able to tolerate surgery under sleep.

    Propofol is one of the anesthetics Dr. Brown uses. He reviewed MJ’s autopsy and the drug was found in his system.

    Dr. Brown uses Propofol in almost all the patients he has. It’s the most commonly used anesthetic all around the world.

    Dr. Brown explained:
    Induce anesthesia – put person in coma.
    Maintain anesthesia – as infusion maintains it.
    Sedative – manage level of pain.

    Dr. Brown said Propofol is quite potent on a cc to cc comparison with Valium and benzodiazepines.

    He has been studying Propofol for the past 7 years. Dr. Brown doesn’t think there’s any other person who has studied the drug more than him.

    MJ autopsy indicates the amount of medication (Propofol) is similar to what is found in general anesthesia.

    Michael Koskoff: Do you agree with that statement? Dr. Brown: In terms of levels that were there, I do.

    Dr. Brown said he published a paper regarding guidelines of use of Propofol.

    Dr. Brown: The infusion rates found in MJ’s autopsy are the same infusion rates when given Propofol for major abdominal procedure.

    Dr. Brown is not board certified in sleep medicine. He said Dr. Czeisler is world renowned in sleep medicine and circadian rhythm.

    Dr. Brown studied the effects of Propofol in relation with sleep. One of the articles is “General Anesthesia, Sleep and Coma.”

    No one had taken the time to put general anesthesia next to sleep next to coma to compare the relationship of the states, Dr Brown explained.

    Koskoff: Is the state of the brain under Propofol sleep? Dr. Brown: It is not sleep.

    Dr. Brown said it’s easy for doctors to tell patients they are going under sleep, but his article was exactly to clear up the language.

    Koskoff: How about doctors using Propofol as an agent to produce sleep? Dr. Brown: They would be tremendously mistaken.

    REM: Eyes are moving, brain somewhat in a wake state, body somewhat paralyzed, heart beat irregular.

    Non-REM: Heart rate slower, breathing a little more regular.

    Sleep is two states: REM and non-REM.

    When you sleep, you go into non-REM stage 1, then stage 2 non-REM sleep, stages 3 (slow waves) and 4 sleep non-REM sleep and REM sleep.

    Dr. Brown: During sleep you have natural oscillation of states. On general anesthesia we bring you to a stage and hold you there for surgery.

    Dr. Brown said there’s no way in the world that you can have the normal sleep patterns while under sedation.

    Dr. Brown explained medical coma: You give enough drugs to go down to a state, hold you there to give a chance for the brain to heal.

    Dr. Brown: Once you are done, you bring them out of induced coma.

    Dr. Brown said sedation, general anesthesia, medical coma is not sleep.

    There’s no REM or non-REM sleep under sedation or general anesthesia, Dr. Brown explained. Patients don’t go under regular sleep patterns.

    Dr. Brown drew a picture how the sleep circuit works. To be conscious, you have to be awake and have to be able to process, Dr. Brown said.

    In order to fall asleep, Dr. Brown said you need to shut the brain down.

    Dr. Brown: To REM sleep, all the circuits shut down. The control center tells the entire system to shut down; cycle takes roughly 7-8 hours.

    Propofol will not produce sleep, Dr. Brown said.

    Dr. Brown: When you give Propofol, it comes in, knocks out all of the circuits, including respiratory circuit, and the cortex.

    “It overwhelms the sleep and respiratory circuit, cortex,” Dr Brown explained. He said it’s not possible to go between REM and non-REM sleep.

    “The first criteria of being under sedation is to be unconscious that you can’t be awakened,” Dr. Brown said.

    Dr. Brown: You achieve unresponsiveness with Propofol.

    Dr. Brown: With Propofol you get unconsciousness, you get amnesia, you can’t remember. For pain, you need an analgesic.

    Dr. Brown explained for light procedures Propofol is sufficient to produce mild muscle relaxation. For surgery they add muscle relaxant too.

    “Propofol produces the unconsciousness state of general anesthesia,” Dr. Brown said.

    “To be clear, Propofol can produce a small part of it (analgesia), makes you unaware,” Dr. Brown explained.

    For colonoscopy, for example, the procedure is not that painful but uncomfortable, Dr. Brown said.

    The mild sedation makes patient unconscious, unaware, you can be unaware to pain, provides some component of analgesia, Dr. Brown said.

    “For surgery, need to add drug for pain,” Dr. Brown explained.

    Dr. Brown said patients commonly report feeling good, feeling refreshed after being administered Propofol.

    Propofol causes release of dopamine, Dr. Brown said. Dopamine is kind of like endorphin we hear, it gives you this good feeling.

    Brown: Propofol releases dopamine that can be interpreted as refreshed sensation of natural sleep. But Propofol cannot produce natural sleep.

    In cross examination, Kathryn Cahan asked about the difference between euphoria and good feeling after using Propofol.

    Dr. Brown said he’s trying to give a lay explanation of what the sensations are, so lay people can understand it.

    Dr. Brown said release of dopamine can cause what some people could interpret as refreshed, invigorated, some people say euphoria.

    Only now studies have been able to determine the release of dopamine associated with Propofol. The study was done in rats, not human.

    “Good feeling” reaction is a well-known effect of the Propofol, Dr. Brown said.

    “He was not having a restful sleep if he was using Propofol as a sedative for sleep,” Dr. Brown said.

    Dr. Brown said his understanding is that MJ was using Propofol for many days, so MJ must’ve had some perceived benefit.

    He said there have been a number of sources for this information, such as the press, high levels of Propofol in his blood at time of death.

    “I was under the understanding the night he died was not the first night he used Propofol,” Dr. Brown testified.

    One of the things Dr. Brown reviewed was Dr. Murray’s interview with LAPD, in which the doctor said MJ was taking Propofol for 60 days.

    Dr. Brown said he believed Dr. Murray’s statement that he only gave a small amount of Propofol to MJ the day he died to be false.

    The doctor said Dr. Murray’s statement was not consistent with the autopsy levels.

    Dr. Brown said he read Dr. Czeisler’s trial testimony and in there the figure of 60 days, or two months, was mentioned.

    Dr. Brown said he doesn’t know what the source was for Dr. Czeisler’s 60 days figure. He also noted he’s not a sleep expert.

    Dr. Brown: One of the reasons I agreed to become part of this case was that I wanted to make it clear what the anesthetic does to the brain.

    Dr. Brown: And I think I’ve done that. The effects of anesthesia and sleep are not under my purview.

    Dr. Brown said he has not queried his patients about their sleep pattern after anesthesia.

    Dr. Brown explained the typical anesthetic has at least 10 drugs. To try to ascribe the effects of Propofol would be exceedingly naive.

    The implication of anesthetics as something that has implication on a patient’s sleep if not under my purview, Dr. Brown explained.

    Dr. Brown: I noticed some inconsistencies of what he (Murray) said we administer (Propofol) and what he said wasn’t correct.

    Cahan asked if Dr. Brown believe Dr. Murray gave MJ Propofol for 60 days prior to his death, according to the LAPD interview.

    “I have no way of knowing what Dr. Murray did every night when he treated Michael Jackson,” Dr. Brown said.

    Cahan: Have you been able to determine how much Propofol MJ was given in the months prior to his death? Dr. Brown: That’s not something I’ve looked into.

    Dr. Brown said he was asked to help understand the mechanism of how Propofol works, not asked to analyze Mr. Jackson’s behavior.

    Cahan: Can someone be in a profound coma and live? Dr. Brown: Yes, many years, there are many cases of that.

    Cahan: And those people don’t die as lack of sleep?

    Dr. Brown said there’s a difference between anesthetizing someone into a coma and someone being in coma from head injury.

    “You can be there for several days,” Dr. Brown said regarding induced coma.

    In order to maintain sedation, Propofol is given to induce and retain sedation, then decreased to bring the person back, Dr. Brown said.

    Dr. Brown: You may have different levels of being awake.

    Dr. Brown: The person may not be the same as they went in. In fact, you don’t want the patient to be awake like before a painful surgery.

    The effect of anesthesia could last several days, Dr. Brown said, and that’s currently under study.

    Dr. Brown doesn’t know how much dopamine is released, but said he could check the numbers.

    Dr. Brown said Jacksons’ attorneys never told him to testify to something he wasn’t comfortable with.

    Koskoff talked about the police report where Dr. Murray said he gave MJ Propofol every night for 60 nights up until June 21st.

    On June 22nd, he started to wean him off, Koskoff said. That seems to be a more accurate description to what was in the report, Dr. Brown said.

    Video deposition ended.

    As to Peter Formuzis I have no idea why they should be talking about discount rates for Mr. Erk’s figures.

    Plaintiffs called their next witness, Peter Formuzis. Brian Panish did direct examination. 

    Dr. Formuzis has a Ph.D in Economics. He described his extensive background and qualifications in the field.

    Dr. Formuzis is a former Cal State Fullerton professor. He worked at the Federal Reserve in various capacities. 

    Dr. Formuzis has consulted for the Los Angeles commission, several private banks, attorneys involved in wrongful death cases for 40 years. 

    Dr. Formuzis has been qualified as expert witness in at least one thousand cases and had cases in several states in the US. 

    Dr. Formuzis has worked with Panish before. He testified for Panish between 20-30 times, was retained between 50-100 times by Panish’s firm. 

    Has been retained against Panish’s firm too, Dr. Formuzis said. 

    Panish asked if he knows anyone more qualified than him to testify in his field. Dr. Formuzis said no. 

    Dr. Formuzis was asked to take the income projection created by Mr. Erk and to take those projections and discount them to present value.

    “Most individuals have capacity, or ability, to earn money,” Dr. Formuzis explained. 

    Dr. Formuzis is not giving an opinion on what loss would be regarding movies and other things Erk didn’t calculate. 

    Dr. Formuzis has been doing present value calculation for almost 50 years, about 40 years in wrongful death cases. 

    Dr. Formuzis is only assessing present value of economic loss, not non-economic, like love, companionship. 

    For present value calculation, Dr. Formuzis said you subtract interest and personal consumption to arrive at current figure. 

    Dr. Formuzis used 7-10% discount rate. Panish said AEG has an expert calculating 18% discount rate. 

    AEG had invested approximately $34 million, so they had confidence they would get that money back, Dr. Formuzis said. 

    The lower the discount rate, the more net money left. The lowest discount rate Formuzis used was 7%. He calculated 10, 15 and 18% as well. 

    Present value based on $108 ticket price: 
    Discount rate of 7% 
    Total: $1,089,555,067 

    Present value: $108 ticket price:
    7% – 919,366,479 
    10% – 856,002,240 — Dr. Formuzis chose 
    15% – 768,026,177 
    18% – 723,523,742 

    Total includes tour earnings, merchandising, endorsement, Las Vegas show, LV royalty, professional fees (at 15% rate), personal consumption.
    Tier 1 range:
    $919,366,479 – $723,523,742 (7% to 18% discount rate) 

    Tier 2 range: 
    $187,564,227 to $101,639,514 (7% to 18% discount rate) 

    Dr. Formuzis did not calculate how much the loss of love, companionship to the children and Katherine Jackson. 

    In cross examination, Sabrina Strong asked if Mr. Erk’s projections are wrong, whether his calculations have no meaning. 

    Dr. Formuzis said it depends how wrong the numbers are. “It would be a proportional degree of errors,” he said. 

    Strong then said she had no more questions to Dr. Formuzis. Cross examination lasted a couple of minutes. 

    Judge adjourned trial until tomorrow morning at 9:30 am PT. KATHERINE JACKSON WILL TAKE THE STAND. 

    Panish told the judge Mrs. Jackson will need to take a few breaks throughout the day and gets tired in the afternoon. 

    She is expected to talk about MJ from early ages until stardom and death. We’re told it will be a very emotional testimony. 

    * Above updates compiled from local media ABC7.
    http://www.twitlonger.com/show/n_1rlejo2

    Like

  7. July 19, 2013 9:00 am

    “Whoso diggeth a pit shall fall therein: and he that rolleth a stone, it will return upon him.” That’s not it, but it’s close. Anyway, anyone setting a trap for the righteous will fall into their own trap. AEG set the trap and it looked like they had it all in the bag. Wow, what a beautiful backfire.” – Linda

    I recall one email from Gongaware – when Michael signed the contract they were sure that he was locked and had no choice: “He is locked. He has no choice … he signed a contract,” Gongaware wrote. http://articles.latimes.com/2012/sep/02/local/la-me-aeg-jackson-20120902

    So they did set a trap for Michael and are now getting into it themselves. And the warning against digging a pit for others for fear of falling there very much applies to this case.

    When This Is It was made many of them said that the “worst was over”. They drove Michael into a grave, made a fortune on his death and as Randy Phillips said “life was going on”. Well, it seems that the worst for them was only to come… Not making AEG answer for what they did would have been a total crime. I was praying for it ever since I read that contract.

    “Looks to me like AEG has backed themselves into a corner, unless they have more aces up their sleeve like Wade. I’m still wondering if he changed his story because he needed, or wanted money, or scared for his life, because he was threatened. Even K Faye said, “If I die, it’s not suicide.”

    Yes, it seems that there is a big element of fear in all this. Look at the way the This Is It tour company behaved (with the exception of Karen Faye) – you can’t say this, you can’t say that. Whoever talked did it on an anonymous basis only. If anyone ventured to say a thing later they would go back on their words. From the outside all of it looked like either a top secret operation or the activities of a gang.

    “It’s not about the money.”

    It is about justice for Michael and his vindication, and money here is just a helpful tool. Money is the only language they understand.

    Like

  8. Sina permalink
    July 19, 2013 8:27 am

    Thank you Helena, and our prayers ofcourse.

    Like

  9. July 19, 2013 7:12 am

    Sina, I absolutely agree and repeat your wishes to Mrs. Jackson on behalf of all of us here. I will also add them to the post.

    We wish Mrs Jackson courage, strength and spiritual guidance to stand her ground today against AEG.

    The love for your son, your search for justice and clarity what happened to him and the heavy but honorable task you were given to guide Michaels children for him will see you through.

    There will be attempts to distract you, to bring you down, to discredit you, like they did to your son.

    But as T. Mesereau said, you have morality on your side.

    You have the love and support of your family, friends and the silent majority of fans who have been loyal to you from the first time we heard of your family nearly 50 years ago, and still today.

    We are sure that members of TeamMichael, who we thank for their hard work, will be there to show their support for the part of the fans who want justice, who believe in the righteousness of the case and in you.

    Let me also add that we shall be praying for you…

    Like

  10. July 19, 2013 6:53 am

    “All of it has been a learning experience. Regardless to the outcome, all of us who thought we knew Michael have learned a lot more about him. For my part nothing I’ve learned has diminished my respect for him one bit. It has in fact grown.” – Dialdancer

    As to you, me and people like us these changes did take place already soon after Michael’s death when it shattered us to our very foundation, but as to the rest of the public I am very much hopeful of this trial. It will show real Michael and not the caricature they were painting of him for so long.

    And real Michael was a human being who valiantly fought an exceptional number of troubles each of which would be enough to turn us into a miserable wreck. And he overcame it all, and fought it with a smile so that no one ever guessed. He was entertaining us and was doing it better than anyone else.

    I think that his life gives a new meaning to the word a human being and what a human being is capable of.

    Like

  11. Sina permalink
    July 19, 2013 6:47 am

    Helena if I may, from this place wish Mrs Jackson courage, strength and spiritual guidance to stand her ground today against AEG .

    The love for your son , your search for justice and clarity what happened to him and the heavy but honorable task you were given to guide Michaels children for him will see you through.

    There will be attempts to distract you, to bring you down, to discredit you, like they did to your son.
    But as T. Mesereau said, you have morality on your side.
    You have the love and support of your family ,friends and the silent majority of fans who have been loyal to you from the first time we heard of your family nearly 50 years ago, and still today.

    I am sure members of TeamMichael , who I thank for their hard work, will be there to show their support for the part of the fans who want justice , who believe in the righteousness of the case and in you.

    Big thanks to you Helena for the platform, for your tireless efforts and hard work and not letting a stone unturned for justice for michael.

    Like

  12. July 19, 2013 6:09 am

    “Now AEG is cornered the same way. It must be haunting for them to see their own statements/emails/agreements used against them. They cannot stand up now and say, well, we don’t think he was able to do all these shows or there is proof he couldn’t have done it. This contract they drew up for MJ will always stand in their way.”

    Exactly, Susanne. In their devilish shrewdness AEG will probably come up with some new explanations, but as to the number of shows they cannot back-pedal now – AEG really planned a crazy number of shows for Michael and bound him by various reservations in their contract. Well, even 186 shows stated by Gongaware in his email or budget was an impossible number. It is almost four times as much as the first 50!

    I don’t rule out that Michael did want to take the show to other countries, but the price at which he would do it would definitely be much higher and the terms for him would be different too. So where AEG planned 10 shows he could make just one but still generate the same revenue.

    In this connection I think that he relied very much on John Branca’s help. Branca was to renegotiate the terms for Michael and was to turn it into a really lucrative business for him. This is probably what Michael meant by saying on June 20th that he was “taking the reigns”.

    Let us also not overlook the fact that Arthur Erk is the expert who worked in cooperation with Branca at the time of buying the Beatles catalog.

    P.S. I am sorry for the slow comments. My monthly Internet capacity has been exhausted and the speed was drastically cut, so there are some big technical problems at the moment.

    Like

  13. July 19, 2013 4:10 am

    Great post!
    AEG is in the same trap as Conrad Murray now. His very own statements were also taken by experts as a basis for their argumentation to prove his guilt. Now AEG is cornered the same way.
    It must be haunting for them to see their own statements/emails/agreements used against them. They cannot stand up now and say, well, we don’t think he was able to do all these shows or there is proof he couldn’t have done it. This contract they drew up for MJ will always stand in their way.

    Like

  14. July 19, 2013 3:02 am

    I don´t know whether to cry or laugh. So Michael could at some point buy himself out of slavery to AEG!

    Like

  15. July 19, 2013 12:07 am

    “No matter how much money this suit boils down to isn’t this AEG business an eye-opening experience for all of us?”

    Helena,

    All of it has been a learning experience. I made drastic changes to my Will, contacted people whom I formerly did business with and have a better understanding of how good people can be given bad reputations and bad people good.

    What a difference experience makes. Compare two excellent accountants, one in a 2005 trial and one in a 2013 trial, but only one understood how revenue can be generated in the entertainment business by someone like Michael.

    Regardless to the outcome, all of us who thought we knew Michael have learned a lot more about him. For my part nothing I’ve learned has diminished my respect for him one bit. It has in fact grown.

    Like

  16. Linda permalink
    July 18, 2013 11:35 pm

    The irony is in the fact that in 2009 it was AEG who was overjoyed by the opportunity to force Michael into a maximal number of shows, and now it is Jacksons’ lawyers who are making use of AEG’s maximal numbers.

    This is the best laugh I’ve had in a while. Thank you. I’m trying to think of a scripture,
    “Whoso diggeth a pit shall fall therein: and he that rolleth a stone, it will return upon him.” That’s not it, but it’s close. Anyway, anyone setting a trap for the righteous will fall into their own trap. AEG set the trap and it looked like they had it all in the bag. Wow, what a beautiful backfire.

    You see people so often doing nasty things to others, and you say, “well, they’ll pay for that, either in this life, or the next.” Once in a while you actually see that law of sowing and reaping in this life. God’s people are the apple of his eye. He said, “touch not mine anointed.” That sounds like a warning, or a threat. Looks to me like AEG has backed themselves into a corner, unless they have more aces up their sleeve like Wade. I’m still wondering if he changed his story because he needed, or wanted money, or scared for his life, because he was threatened. Even K Faye said, “If I die, it’s not suicide.” I think a lot of people are scared of AEG. I have a lot of respect for all those testifying against them, and especially Katherine, seeking justice the only way she can with this lawsuit. It’s not about the money.

    Like

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