The passing of Michael Jackson certainly was a tragic ending to a troubled life, but it may end up costing promoter AEG £300 million, as well as revenues lost as O2 Arena sits empty during the lucrative concert season.
It certainly was audacious for AEG to schedule 50 Michael Jackson concerts at London's O2 Arena, in what was billed as a farewell tour. With the untimely death of the King of Pop, that audaciousness could end up costing the giant promoter upwards of £300 million, or $496 million in today's currency rates.
AEG's risk involved such an ambitious schedule for Jackson, both in terms of Jackson's health (which was been reported as being frail for months now) and the ability of the market to absorb that many tickets. While the market has had a mixed reaction to the schedule — high-end tickets were selling well, apparently, but not low-end ducats — the insurance industry had a negative reaction to the slate, and AEG had found it very difficult to obtain insurance. That led AEG to declare Jackson's health was so good they would "self-insure" the concert run .
In the end, the insurance industry was right. And the confidence exhibited by AEG officials will cost them. Besides the lost costs of staging the concerts, the firm will need to eat a slew of empty nights at O2 Arena during the lucrative concert season.
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