Question: How can you sell tickets when you haven’t got insurance?
- It seems clear that they did not have insurance for the full 50 in London let alone the 3 year world tour.
- Did AEG inform the insurance providers of Michael’s health problems, lack of sleep, reported skin cancer on his chest, information provided by Murray to them etc
- What would have happened if further insurance could not have been obtained
- It seems that the insurance providers were not keen to extend cover
- AEG would have self insured
- But when it came to it they used the rehearsal footage as their insurance and sold the movie they made to Sony
http://news.bbc.co.uk/1/hi/business/8120844.stm
Jackson cancellations to hit AEG
AEG Live, the organiser of Michael Jackson’s concerts at the O2 arena, could lose millions from the cancellation of the concerts.
Mr Jackson had been due to perform 50 dates at the London venue.
AEG said full ticket refund information would be released early next week for all Michael Jackson “This Is It” shows.
AEG has advised fans to hold onto their ticket vouchers and proof of purchase. It remains unclear what insurance cover AEG Live has.
As well as fans, thousands of casual staff set to work at the concerts will also lose out from the cancellation.
“On behalf of the entire AEG organisation we extend our deepest condolences to Michael Jackson’s family and friends during this tragic time” said AEG in a statement.
Seeking cover
concerts due to start on 13 July.More than $85m (£52m) worth of tickets have been sold and AEG has spent $30m on the production already, according to a report in Billboard, the American music magazine.
Reports suggest that AEG, which also owns the complex formerly known as the Millennium Dome, has only insured the first 10 nights of the 50-date concerts.
It had proved difficult to get cover as insurers were unconvinced that Mr Jackson would be fit enough to perform all the dates.
Earlier this year, AEG Live’s head Randy Phillips told newspapers that it was prepared “to self-insure to make up the dates”. He later told Billboard that the company was well insured.
On Friday, Lloyds of London said: “We can confirm that some of the insurance for the Michael Jackson concerts are placed with Lloyds market but any losses [are] not likely to be significant.”
Concert promoters have said it could be difficult to find a replacement artist for a venue that big for 50 dates.
About 1,000 staff are employed for each show, most of them on casual or temporary contracts. These staff would have been booked for the 50 shows already and will now need to be cancelled, a GMB union officer said.
AEG Live owns concert venues around the world and is a subsidiary of Anschutz Entertainment Group.
Michael Jackson’s death leaves AEG Live facing £300m bill
By Jon Swaine and Jamie Dunkley
Published: 3:26PM BST 26 Jun 2009
AEG Live, the promoters of Michael Jackson’s 50-date residency at London’s O2 Arena, faces a bill of up to £300 million following the cancellation of the concerts.
It is thought the company was unable to get insurance for at least 30 of the concerts – which were due to start next month – after obtaining limited cover for between 10 and 20 of up to £130 million.
Insurers declined to take on the financial risk of the shows not going ahead, apparently concerned that the singer, who appeared frail at the unveiling of the concerts in March, would not be able to complete the run.
Randy Phillips, AEG’s chief executive, told The Daily Telegraph at the time that the company, which is owned by the American billionaire Philip Anschutz, was willing to “self-insure”, shouldering the potential cost itself.
“It’s a risk we’re willing to take to bring the King of Pop to his fans,” Mr Phillips said, insisting Jackson had passed a thorough medical “with flying colours”. AEG declined to comment yesterday.
Ray Waddell, a live entertainment expert from Billboard magazine, reported yesterday that the limited cover AEG managed to obtain did not include Jackson’s non-appearance – despite this typically being a basic component of such policies.
“Even if AEG had a policy, that doesn’t mean Jackson’s death, and the losses incurred, would be covered,” he said.
“If [Jackson's death] was a pre-existing condition or drug- or alcohol-related, a normal cancellation policy would not cover that, even if he had passed a medical exam,” Waddell quoted a source close to the situation as saying.
The original buyers of all 750,000 tickets for the “This Is It” residency, which were priced at £50-£75, are expected to be given a full refund.
However, fans who bought tickets through internet auction websites like eBay, where some paid thousands of pounds to touts, will not get their money back.
Tickets for the concerts sold out in one morning, after being bought at a rate of 11 per second.
In a statement, the O2 management said yesterday: “At this moment our thoughts are with Michael’s children, family and friends. We will announce ticketing details in due course.”
AEG and the O2 must now either find acts big enough to fill the 15,000-capacity arena for the 50 dates – which span July and next January and February – or let the venue sit empty.
Gary Bongiovanni, the editor of the concert magazine Pollstar, said: “They are taking a big hit. They will be able to re-book some of those shows. But those in July, the building will probably be dark.”
Predicting the financial fall-out would be “messy, as well as expensive”, Waddell predicted that AEG could make a claim against Jackson’s estate.
Michael Jackson gig promoters couldn’t get insurance for O2 concerts
Jun 26 2009
THE death of pop megastar Michael Jackson has turned the spotlight today on the firm behind the singer’s planned gigs at the O2 arena.
AEG Live, which persuaded Jackson to stage the mammoth 50-date run at its London venue, is understood to have faced difficulty insuring the This Is It performances after the initial schedule of 10 concerts grew.
The company is thought to have struggled to arrange cover for the full set of concerts, which reportedly would have taken the policy towards s300 million.
In March the firm said it was still negotiating with insurers over the Jackson dates as one million fans snapped up tickets to the sell-out programme.
AEG chief executive Randy Phillips said the company would be willing to “self-insure” to get the shows to go ahead and played down concerns over the star’s health.
Trade magazine Reinsurance said that while the company had managed to secure cover for the first 10 concerts – thought to be worth about s80 million – the rest of the dates had met with little enthusiasm from insurers.
The additional 40 dates were understood to take the policy to around the s300 million level, it said.
Mr Phillips said in March that AEG would be willing to take on the risk of Jackson falling ill, adding that he was in “great shape” and would reveal an updated version of his moonwalk dance at the shows.
“The insurance brokers sent doctors and they spent five hours with him, taking blood tests,” he said.
“But we would be prepared to self-insure to make up the dates.
“It’s a risk we’re willing to take to bring the King of Pop to his fans.”
He said Jackson could make 50 million to 100 million US dollars from the London dates, rising to 500 million if he did a world tour. But he rejected suggestions that the singer’s famously pressured finances were a motivation for the gigs.
No one from AEG was available for comment today.
Jackson fans paid between s50 and s75 for the tickets.
The shows were due to start on July 13 and run until next spring, dominating the O2′s schedule for months.
A statement from the O2 said: “At this moment our thoughts are with Michael’s children, family and friends.
“We will announce ticketing details in due course.”
