Michael Jackson mortgages all his songs

MICHAEL JACKSON has made a secret deal to mortgage the entire back catalogue of his own songs, including hits such as Billie Jean and Beat It, for £30m.

The pop star, described last week in court as being 'on the precipice of bankruptcy', borrowed the money two years ago to pay off some of his huge debts and continue to fund his lavish lifestyle.

But by using his own back catalogue as security, the singer now does not have a secure source of future income to finance his debts and pay off mounting legal bills.

It is not the first time Jackson has been forced into such action. In 1999 it was revealed that he had borrowed £65m from US banks using the catalogue of Beatles hits that he bought in 1985. Jackson went on to borrow £45m in 2001 and a further £30m in 2003.

The total value of the Beatles catalogue, which he owns with Sony through a company called Sony ATV, is estimated to be worth a total of £300m.

But his situation raises serious questions about his ability to even meet debt repayments and means Jackson, whose album Thriller is the biggest selling of all time, could be left with nothing to show for 30 years at the top of the music industry.

The singer, who is on trial in California accused of abusing a teenage boy, has debts of about £160m, according to prosecutors.

They have portrayed him as a 'spendaholic' and his situation has become an important element in the case. Prosecutors are seeking to make the full extent of his financial difficulties public so as to discredit the singer's reliability.

Jackson's spending habits have become legendary. His 2,700-acre ranch, Neverland, which has a theme park and zoo, costs the star about £120,000 a month in maintenance alone. During the documentary made by Martin Bashir in 2003, Jackson famously splurged almost £4m in a Las Vegas furniture store. It is also reported that Jackson owes a further £75m in tax liabilities.

The new revelations about Jackson selling off his back catalogue are contained in a forthcoming biography of music industry boss Paul Russell, who has worked closely with the star since he first burst on to the scene with the Jackson 5.

Russell, a former senior vice-president at Sony Music Entertainment and chairman of Sony ATV, told The Mail on Sunday: 'While Michael may still have considerable assets, he has a serious cashflow problem.

'He first borrowed against the value of the Beatles catalogue in 1999 and since then he has just kept on borrowing.

'His problem is he still is living the lifestyle of a superstar whose records sell 40m copies, like in the Thriller days. The pie got smaller, but he was still spending.'

In the book, We Made It Up As We Went Along, Russell revealed how Jackson's attitude towards owning the rights to the Beatles hits changed.

He said: 'Jackson was never a good businessman. I remember in the early days, just after he bought the Beatles catalogue, he was so enthusiastic and earnest about owning what he saw as part of music history. He wanted to be a guardian of the Beatles' memory, not make a fortune out of them.'

But as his popularity began to wane and he became embroiled in a costly molestation lawsuit in 1993, brought by Jordan Chandler, which resulted in a reported £15m out-of-court settlement, Jackson was forced to reassess his view.

Russell said: 'He really wanted to be a part of musical history by owning all these rights. I don't think he ever expected they would be necessary to bail him out of a difficult financial situation.'

Jackson's income has dwindled dramatically since the Eighties when Thriller sold more than 60m copies around the world and netted him £60m from sales alone.

In contrast, the 1995 album HIStory cost £15m to make but sold only seven million copies.