MIKE PESCA, host:

Private equity firms are known for taking calculated risks. They often pounce when the rest of the financial world is tentative. Las Vegas is a place known for less calculated risks. But still, even the worst bet on the wheel of fortune offers a 40-percent return on investment. Then there is this investment being considered by a private equity firm that owns a few Las Vegas casinos.

Michael Jackson, the king of pop, Neverland Ranch, spangled glove, "Thriller," Billie Jean is not my lover - you know the guy. Colony Capital is jacked up about Jacko, as the tabloids might say, if they had our writers. The private equity firm has purchased Jackson's loan on Neverland Ranch in hopes of convincing him to be part of a tribute show in Las Vegas. We first read about this story in the Wall Street Journal and since we wanted to know more, we've decided to Rip It...

(Soundbite of "Law & Order" theme)

PESCA: From the Headlines. Ethan Smith, reporter for the Wall Street Journal, wrote the article. He joins us now. Hello, Ethan.

Mr. ETHAN SMITH (Reporter, Wall Street Journal): Hi. How are you doing, Mike?

PESCA: Good. You know, we can talk about Michael Jackson as a pop icon or an entertainer all day, but I want you to talk about him as an investment. Can you give me a quick rundown of his assets and financial liabilities?

Mr. SMITH: Well, his biggest asset is a large stake in a music-publishing joint venture with Sony Corporation called Sony ATV. It owns the music and lyrics to hundreds of songs, including 251 Beatles songs. It was a really shrewd investment that he made back, kind of at the top of his game, in the '80s.

And then he bought the publishing catalog himself, and sold half of it to Sony, and he's made other investments. He has well over 500 million dollars in assets and less than that in liabilities, although maybe not so much less, probably about 400 million in debt, which he's basically just living on since his career and personal and financial lives melted down over the past five to 10 years.

PESCA: I guess Colony Capital is looking at that and saying, yes, but he has the potential to make so much more money for him and for us, if we just get the ball rolling in the right direction. So what's their plan for Michael Jackson?

Mr. SMITH: Right. Where his previous creditors, I think, have pretty much looked at the situation and said, well, worst-case scenario, he's worth more than he owes us, Colony looks at the situation and says, you know, we could get this guy back on stage. And so they have this kind of step-by-step plan to first rehabilitate his image by getting him to go on "Oprah" and make a sort of contrite statement - not contrite, make a statement saying, look, I love America. The American legal system exonerated me. I don't want to talk about this anymore.

This is, of course, the child-abuse allegations he was tried on a few years ago. You know, get him out to sing and dance somewhere. Nobody's really seen him perform in many years. And then they would like to rip a page from a playbook that was designed pretty much by Celine Dion a few years ago, who was installed at Cesar's Palace and earned around 400 million dollars performing five nights a week for four years.

PESCA: The thing is, Celine Dion's a workhorse. She has no negative anything associated with her, unless you are vehemently anti-Quebecois. What makes them think that public will, you know, once again take a sheen to Michael Jackson, given the ick factor?

Mr. SMITH: Well, that is the big question, and you know, they're not unaware of this. And they are not unaware of the fact that Michael Jackson is famously flighty, you know, just has a general kind of constitutional aversion to, you know, putting his nose to the grindstone, as it were, and working hard. So they are thinking, rather than 180 nights a year, maybe more like 20 nights a year they want him to show up on stage. And the rest of the time, they do sort of a Cirque du Soliel-Michael Jackson themed show. And so the question is, is there an appetite to, you know, get 3,000 butts in the seats 20 to 30 nights a year? You know, that starts to sound like a little more realistic proposition, ick factor or not.

PESCA: And what's the deal? Colony Capital owns the Las Vegas Hilton and has a big share in the station casinos, of which there are many, many in Las Vegas?

Mr. SMITH: You know, there are some in Las Vegas - I actually don't know how many station casinos there are - but they did something like this with Barry Manilow last year at the Vegas Hilton. He did, like, 90 shows there and earned a ton of money for them. And they were very happy with that situation. So, yeah, and they would either build a theater for Jackson, assuming this all worked out, or you know, there's all kinds of construction happening in Vegas now, and always. There are some arenas being built. There are all kinds of venues where they could have this.

PESCA: But they also - did they buy his loan for Neverland? Does Colony own that right now?

Mr. SMITH: Right, he was in default on this. You know, in the grand scheme of things, it doesn't sound like much compared the rest of his loans that he's got, but he's like a 23- or 24-million-dollar loan backed by Neverland that he was in default on. And the current - or the then current owner of it, Black Fortress Investment Group, had initiated foreclosure proceedings.

They had actually scheduled a bankruptcy auction for it, and Colony stepped in and bought it, and they are negotiating with him now to give him a little breathing room, probably in the form of something, you know, Countrywide Financial customers would recognize, where it's kind of a balloon payment, where he maybe doesn't even pay anything on the loan for awhile, and you know, later on, it's some big payment.

PESCA: And then, maybe, when he owes them a lot, they could book him into their casino. But is there anything - very quickly - any word from Michael Jackson officially on whether he's up for this?

Mr. SMITH: Yes, his spokesman says he's talking to them, so, apparently, he's into it, at least in theory.

PESCA: He, who? Ethan Smith is a reporter for the Wall Street Journal. Thank you very much, sir.

Mr. SMITH: Thank you.

PESCA: Nice one. Next on the show, Mason Jennings is here to perform from his new album, "In the Ever." This is the Bryant Park Project from NPR News.

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