The 21-week trial, which has opened a
window into the private life and last days
of the King of Pop, has put not only
concert promoter AEG Live on trial but
also the entertainment industry's live-
performance business model, analysts
say.
The wrongful death lawsuit filed by the
family of late pop star Michael Jackson
against his concert promoter is now in the
hands of a jury, and the verdict could
have far-reaching implications for how the
entertainment industry does business
with its biggest stars.
The 21-week trial, which has opened a
window into the private life and last days
of the King of Pop, has put not only
concert promoter AEG Live on trial but
also the entertainment industry's live-
performance business model, analysts
say.
After closing arguments concluded on
Thursday, the judge sent the jury to
deliberate and a verdict is expected some
time next week, if not earlier. Jackson
family lawyers have suggested in court
documents that damages could exceed $1
billion.
"If AEG is found liable, that puts these
companies on the line for millions and
billions of dollars, and it is already causing
the industry to rethink how the structure
is set up," said Jo Piazza, the author of
"Celebrity, Inc." and a celebrity branding
consultant.
Currently, entertainment producers
typically pay up-front sums running into
millions of dollars to performers in
exchange for being able to have greater
control over some of the performers'
affairs.
The lawsuit alleged that "AEG came to
control much of Jackson's life. The home
Jackson lived in was provided by AEG; his
finances were dependent on AEG, and his
assets stood security if he failed to
perform." Those assets included The
Sony/ATV music catalog owned by
Jackson, which even includes iconic
Beatles songs.
The verdict "could have a chilling effect on
how much micro-management of a star's
life companies like AEG and other
production companies have," Piazza said.
"But the reason the micro-management
even exists is to make sure that the
celebrities, the talent, is in the best
position possible to make money for the
production company," she added.
That kind of control is the crux of the
wrongful death lawsuit filed by Jackson's
mother, Katherine Jackson, and his three
children.
PROFITS AND RISKS
In the suit, Jackson's family alleges that
privately held AEG Live, one of the
world's top concert promoters,
negligently hired cardiologist Conrad
Murray as Jackson's personal physician
and ignored signs that the singer was in
poor health.
The "Thriller" singer died in 2009 in Los
Angeles at age 50 from an overdose of
surgical anesthetic propofol.
Murray, who was caring for Jackson as the
singer rehearsed for his series of 50
comeback "This Is It" concerts, was
convicted of involuntary manslaughter in
2011 for administering the propofol that
killed the star.
"It's the kind of case that every
entertainment lawyer is paying attention
to because everybody in the
entertainment industry has assistants and
sometimes that entails medical attention
as well," said John Nockleby, a professor
at Loyola Law School in Los Angeles.
AEG Live has argued that Jackson had
prescription drug and addiction problems
for years before entering into any
agreement with the company.
It also has said that it did not hire or
supervise Murray and could not have
foreseen that the physician would have
posed a danger to the singer.
"They (AEG Live) chose to run the risk
and make a huge profit," Jackson family
attorney Brian Panish said this week in
closing arguments.
"The industry is watching and waiting and
seeing very much how this plays out,"
said Jody Armour, a law professor at the
University of Southern California who
specializes in personal injury claims.
"It could have a deterrent effect on
corporations going forward, and how
much and how aggressively they push
entertainers to meet their contractual
obligations," he added.
PERFORMANCE-BASED PAY
One change Piazza foresees in the
industry's business model would be in
how producers would start coupling an
entertainer's pay together with fulfilling
their contract.
"I think the big impact this trial will have
is lessening those gigantic, multi-million
dollar up-front payments and shifting the
model towards a more back-end, profit-
sharing model because then it would put
the responsibility more on the talent to
perform," she said. "They'll be making the
money based on their performance."
But Reisman believes that the financial
pressure for companies like AEG Live is
too significant for a substantial change in
how they operate or control artists.
"It's very, very important that AEG knew
they had to meet that tour deadline,"
Reisman said. "Now, whether or not they
knew what this doctor was prescribing,
whether or not they authorized it, those
are all questions for the jury."
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