AP Exclusive: Michael Jackson claimed net worth of $236.6 million in 2007

NEW YORK — It’s one of the biggest mysteries in the Michael Jackson saga: How much was the lavish-spending, massively debt-ridden pop icon really worth? In the most detailed account yet of the singer’s tangled financial empire, documents obtained by The Associated Press show Jackson claimed to have a net worth of $236.6 million as of March 31, 2007. But less than $700,000 of that amount was in cash — a relatively paltry sum given his opulent lifestyle, prodigious borrowing and seven-figure shopping sprees.

The dollar amounts, which previously consisted of estimates, are crucial because Jackson’s estate is expected to become the focus of a legal battle between the singer’s family and creditors.

Since then, however, Jackson’s debts and assets have grown substantially — he took on more debt in a refinancing transaction later that year, and the Sony/ATV Music Publishing joint venture spent hundreds of millions acquiring new songs.

The revelation came Tuesday as Jackson’s family reversed itself and said the singer did in fact have a will — complicating a bid by Jackson’s mother to take control of her son’s finances. The will names his mother Katherine as guardian of his children and puts his assets in a trust, according to a person who spoke on condition of anonymity because he was not authorized to speak on the topic.

Jackson had $567.6 million in assets, including his Neverland Ranch and his share of the Sony/ATV Music Publishing catalog, which includes the rights to songs by the Beatles, according to a statement of financial condition prepared by Washington, D.C.-based accounting firm Thompson, Cobb, Bazilio & Associates.

The report was prepared at a time when Jackson had large sums of debt coming due that had to be refinanced. The financial statement, which is not as thorough as an audit, was based in large part on estimates provided by Jackson’s advisers that the accounting firm said it could not verify.

In the documents, the firm also said it omitted the amount Jackson owed in income taxes.

The documents do not show how much money he had coming in that year or how much he was spending, which makes it hard to estimate just how cash-poor he was. Still, the statement paints a picture of Jackson’s tangled finances and the mountain of debt he left behind.

The five-page report says Jackson had debts of $331 million. The singer had just $668,215 in cash, according to the report.

The accounting firm did not return calls seeking comment.

The report puts a net value on Jackson’s 50 percent stake in the Sony/ATV Music Publishing catalog — his most prized asset — at $390.6 million. The 750,000-song catalog includes music by the Beatles, Bob Dylan, Neil Diamond, Lady Gaga and the Jonas Brothers.

A separate document obtained by the AP details Jackson’s dealings with Sony Music Entertainment Inc., which owns the other half of Sony/ATV. Jackson was guaranteed a cash distribution of $11 million a year from the venture through September 2011, according to the May 25, 2007, document that was signed by the pop star.

The document also detailed Sony’s ability to buy an unspecified percentage of Jackson’s remaining share in Sony/ATV.

It said Sony agreed to guarantee loans made to Jackson through September 2011 and to help him refinance his debts. Sony also agreed to advance Jackson money to help pay the interest to his main creditor at the time, Fortress Investment Group LLC, to avoid defaulting. Barclays Bank PLC took over the Fortress loan, which is now around $315 million, in December 2007.

The documents also show that Jackson gave his approval for Sony/ATV to use up to $400 million to purchase the 125,000-song Famous Music LLC catalog from Viacom Inc., which holds such songs as “Footloose” and “The Real Slim Shady” by Eminem. The deal was announced a week later.

A Sony/ATV spokesman declined to comment.

Another of Jackson’s prized possessions, his Neverland Ranch, is valued at $33 million, according to the accounting firm’s report. He also had $20 million worth of cars, antiques, collectibles and other property.

It’s likely that Neverland, a 2,500-acre property in the rolling hills of Santa Barbara County, has dropped in value since 2007 along with the rest of the battered California housing market, experts said.

“The luxury market in the past year has really taken a hit in markets across the country,” said Rick Goodwin, publisher of Ultimate Homes and its parent publication, Unique Homes.

The ranch in central California’s wine country was set to be sold in March 2008 because of missed payments on a $24.5 million loan, but Jackson managed to cut an 11th-hour deal to keep it off the auction block.

The fact that few, if any, similar properties in the area are selling makes it even harder to determine Neverland’s current market value. A couple of properties in the 500-acre range are on the market in the area for around $10 million, said Steve Schott, a real estate appraiser based in Santa Barbara.

Jackson died Thursday at age 50 of what his family has said was cardiac arrest. Medical examiners in Los Angeles are perhaps weeks away from determining the official cause of death.

The divvying up of Jackson’s assets — and the settling of his debts — are likely to be hotly contested in court. On Monday, lawyers for Katherine and Joe Jackson won temporary custody of Michael Jackson’s three children and moved to become administrators of his estate.

A judge granted 79-year-old Katherine Jackson temporary guardianship of the children, who range in age from 7 to 12. He also gave her control over some of her son’s personal property that is now in the hands of an unnamed third party. But the judge did not immediately rule on her requests to take charge of the children’s and Jackson’s estates.

Associated Press writers Alex Veiga, Ryan Nakashima and Anthony McCartney in Los Angeles contributed to this report.