Live London counts the cost

Michael Jackson’s death could cost the London economy as much as hundreds of millions of pounds – not counting the £300m promoter AEG Live is thought to have been left exposed to following the collapse of the singer’s tour.

With around 750,000 fans expected to see their idol on one of the 50 O2 dates of the This Is It tour starting July 13 (and running to March next year), one ticketing expert believes that hotel bookings, travel, restaurant reservations and spending at the shows themselves could easily have eclipsed £1bn.

Suppliers to The O2, such as drinks and catering companies, merchandisers and others will also be hit in the pocket. “I think those people going to the concerts would easily spend hundreds of pounds a piece, but now that’s not going to happen,” he says. “It’s a massive loss.”

But London’s hospitality industry is not the only big loser. Tour promoter AEG Live will be counting the cost of the O2 residency for months, if not years to come. And ticket sellers are also being deluged by anxious fans, some of whom paid £75 through the official ticketing agency Ticketmaster and anywhere up to £1,000 and beyond on the secondary ticketing market.

The tour had been personally put together by Randy Phillips, the Los Angeles-based president and CEO of the US entertainment group. He was not available for comment as MW went to press, nor was his European chief David Campbell.

But sources suggest there was no contingency plan in place. “No-one expects these things to happen,” says one insider. “He was doing 50 dates. Now that is not going to happen. It is not as if there was a huge back-up.”

It is now expected Campbell and Phillips will sit down over the next few days in an attempt to sort out the ticketing and also how they will fill the 50 dates now left empty. Last Friday AEG stated, “We will announce ticketing details in due course” while in another statement Phillips added that Jackson “was my friend”.

However, it is expected the group will reimburse the estimated 500,000 tickets they have already released to the market (some 250,000 are thought to have been held back for later shows) worth around £30m.

On top of this 10,000 tickets were sold through the secondary ticketing company Seatwave and a further 50,000 through the agency Viagogo.

Seatwave CEO and founder Joe Cohen says his insurer Mondial Assistance will cover the cost of tickets bought through his company and booking fees and postage. “All customers who purchased tickets for Jackson’s O2 shows from Seatwave are covered by our TicketCover, which guarantees they will get a full refund,” says Cohen, who adds the average price paid by customers of his service for Jackson tickets was £300. “They’ll get every penny back.”

Deloitte media partner Charles Bradbrook says other secondary tickey buyers might not be so lucky. “Refunds from promoters will only be made to original purchasers, highlighting the potential risk to consumers of buying through the secondary market.”

AEG Live, which also operates The O2, will face a massive challenge in recouping costs because it will be very difficult to find replacement acts to fill in many of the dates. “It’s going to be really difficult to fill those dates straight away,” says another source.

Worse, AEG Live had reportedly only managed to secure insurance for a limited number of dates and Phillips has gone on record to say AEG Live would “self-insure” some of the dates should there be a shortfall in coverage. The whole policy had been shopped for around £300m with just £80m of that thought to have eventually been covered by the London insurance market.

The deal is understood to have been brokered by Robertson Taylor, but a director of the company would only offer a “no comment” to questions.