City-Touted, $4 Million Benefit From Jackson Memorial Pulled From Thin Air
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City-Touted, $4 Million Benefit From Jackson Memorial Pulled From Thin Air

Read Dennis Romero's updates from Monday's City Council committee meetings.

LA Weekly obtained a series of emails that shed light on City Hall's oft-touted contention that July's Michael Jackson memorial at Staples Center downtown was a $4 million boost to area businesses. The number is important because it's often cited by those who believe it was worth it for the city cover the bill for police and officer overtime -- $3.2 million -- for that day's events downtown.

It turns out the $4 million number didn't come from a study. It first arose when Jack Kyser, chief economist for the Los Angeles Economic Development Corporation was quoted in the media -- before the memorial took place -- saying that it could bring $4 million in business to the city. The City Council had no investment in the figure until Oct. 22, when the legislative analyst's office shot an after-hours email off to the LAEDC asking it to justify the figure on the eve of a council hearing on the memorial's costs. City Hall needed to cover its decision to spend $3.2 million on the memorial, and the $4 million windfall could have been its magic number.


"Was the LAEDC able to actually determine the revenues generated from the event," asked June Gibson, assistant chief legislative analyst, in the Oct. 22 email.

Kyser responded the next morning: "The $4 million estimate was a very rough estimate that was done in response to media calls. We have not done a comprehensive analysis of the revenue generated, but would estimate that the $4 million was probably low."

In a subsequent email to the city, Kyser said, as he had told the Weekly, "The conclusion was based on the number of celebrities who came in to L.A. for the service. Several probably came in on private planes, which would go to either Van Nuys, BGP or LAX. They would probably have used car services. Some would have stayed in hotels probably on the Westside. They probably also conducted business while they were in Los Angeles."

As we reported last week there was little evidience to support the idea that a throng of celebs flooded L.A. for the memorial. One major fact to consider is that many of the dignitaries who came to the memorial already live here. Some of them, as an official at Anschutz Entertainment Group, the company that owns Staples Center, admitted, were already in town as a result of Jackson's death (and some of them famously skipped the 17,500-ticket event at Staples).

What's more, the expected, million-strong throng of people never showed at Staples that day. In fact, then-Chief William Bratton estimated the crowd around Staples at 600 at one point during the memorial July 7. One expert told LA Weekly that people turned off by the prospect of a mob scene downtown stayed away and could have actually hurt area business.

As the Los Angeles Times reported Sunday, AEG has been kind to some of the same folks on the City Council who have been quick to deflect criticism of the city's spending on the memorial. The company has raised funds for political issues of great importance to Mayor Antonio Villaraigosa and Councilwoman Jan Perry, who represents much of downtown. Villaraigosa had originally asked members of the public to pitch in via a website to help cover the city's costs for AEG's show. Perry has been critical of those on the council who have pressured the company to cover the city's costs, calling them people who "want to get recognition for being the one who took it across the finish line."

The money is a drop in the bucket for a city that is heading toward a more than $1 million per day operating deficit. But what critics are asking is whether residents should have to live with one less cop or one less firefighter because AEG, a company owned by billionaire Tim Leiweke Phil Anschutz, wanted to put on what was essentially 90-minute television special for 31 million viewers across the world. The company sold the rights to Jackson's Staples Center rehearsal footage to Sony for $60 million. Sony used it as the backbone for the blockbuster concert film This Is It. AEG has a 10 percent stake in the movie's profits. The memorial served, intended or not, to stoke interest in the entertainer and, thus, AEG's stake in his legacy.

Chief legislative analyst Gerry Miller and city administrative officer Miguel Santana wrote in a report that the city should back off of AEG.

"In light of the overall positive impact of the event ($4 million), and that there was no ordinance in place prior to the event providing for cost recovery from major venues, the city may wish to cease pursuing cost reimbursement."

That's one option as the City Council is expected to take up the issue Monday.

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