By Roger Friedman

Michael Jackson has managed to do himself in again. It’s an amazing
situation, and one only Jackson could pull off.

As I’ve told you for weeks, Sony Music has been trying to negotiate a way
for Jackson to hold on to his partnership with them in what’s known as the
Beatles catalog, aka Sony/ATV Music Publishing.

As I’ve also told you, long before the New York Times caught wind of it,
Sony had convinced Citigroup to help finance the purchase of Jackson’s $270
million worth of loans from Fortress Investment Group. In exchange,
Citigroup only wanted 6 percent ownership in Jackson’s holdings.

But a year ago, Jackson had made a fatal mistake. He instigated the sale of
those loans by Bank of America to Fortress. The deadline for paying the
loans back was Dec. 20. Fortress extended the deadline to Feb. 20, at which
time they could have foreclosed on Jackson.

They didn’t, but they also wouldn’t sell to Sony and Citigroup. As I told
you in this space, Fortress wouldn’t let go. And, according to my sources,
they wanted far more than Citigroup: more like 20 percent.

Now it seems a deal has been struck, but the deal is exactly the same one
Jackson was offered last year, before the Bank of America sale, by advisers
Charles Koppelman and Alvin Malnik and bankers at Goldman Sachs.

In that deal, Jackson would sell one half of his Sony/ATV holdings, retain
the other half and have enough cash to pay off his debts and leave him with
a nice piece of change, plus an annual $10 million income.

At the time, Jackson refused, deciding that the Goldman Sachs group was “out
to get him.” He asked billionaire Ron Burkle to intercede instead with Bank
of America.

Burkle, according to sources, called B of A’s CEO, Ken Lewis, and said he
thought Jackson was getting a raw deal from the bank. Lewis was furious.

Jackson’s personal banker at B of A, Jane Heller, had held his finances
together with toothpicks for years. B of A was offended by Burkle’s
comments, and decided to sell the loans. Fortress, which had already made an
offer, was the buyer.

Now, a year later, Fortress - holding Jackson’s notes - has still refused to
let go. So now, in addition to Sony and Citigroup, Jackson is also in
business with them.

The deal he’s getting isn’t much different from the Goldman Sachs one, and
if you think about it, how could it be? Jackson always had one alternative:
to sell part of his ownership in the Beatles catalog.

And now the moment has come. Jackson - whose group leaked information to the
New York Times yesterday - gets a loan from Fortress for $300 million, but
sells Sony half his interest in the company. The details still have to be
worked out, but by calculation, in the end, Jackson loses now for not taking
the Goldman Sachs deal last year.

Of course, this is what Jackson doesn’t know about Fortress Investments, and
what he’ll likely never know unless someone reads him this column.

A few years ago, Fortress financed something called The Songwriters
Collective. TSC, as it was known, was designed to help songwriters - mostly
in Nashville - so they would get some money for their work. It seemed like a
noble idea, but it backfired wildly.

Last year one of the writers in the Collective, Annie Rogoff, sued Fortress
to get the rights back to her songs. The case has been settled, and Rogoff
got the rights back, but at a high price. If Fortress was interested in
helping songwriters, this was not a good example of caring about artists’
rights.

Presently, three different lawsuits are proceeding against Fortress and The
Songwriters Collective, according to Rogoff’s attorney. They are similar to
Rogoff’s. One is in state court in Tennessee. Two are in federal, one which
includes as a plaintiff Holly Lamar, who co-wrote Faith Hill’s biggest hit,
“Breathe.” All of the songwriters involved are demanding the return of their
rights. In the end, it is likely they will have to buy their own work back
from Fortress.

Jackson still has to deal with another manifestation of the Fortress
agreement. He is currently being sued for $48 million by Prescient Capital,
a one-man operation owned by Darien Dash, cousin of hip-hop entrepreneur
Damon Dash.

In late 2004, Dash was asked by Jackson’s brother Randy Jackson to find
someone who would put up the financing to buy out Bank of America. Jackson
agreed to pay Dash a 9 percent fee if this was accomplished.

Dash found Fortress, which agreed to put up $530 million to get Jackson out
of his entire Sony mess. In the end, though, they only had to pony up $270
million. Dash asserts in his lawsuit that he’s owed 9 percent of $530. That
comes to $48 million.

Last year, during his short term as Jackson’s financial adviser, Burkle, I
am told, spoke with Dash and offered him $1 million as a settlement. Dash
refused.

“The problem is, Michael signed the document with him,” says a source.

So even if the legality of the agreement is questionable, Jackson’s
liability may yet be proven.

Of course, there’s also another lawsuit, brought by Jackson’s former
business partner Marc Schaffel. It’s set to begin June 2 in California, and
so far no one from Jackson’s side has indicated that they are not ready.

If Jackson doesn’t show in the case, it’s possible his videotaped
deposition, made last September in London, could be played for a jury in
lieu of an appearance.

Source: FOX News

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