This action might not be possible to undo. Are you sure you want to continue?
(Entertainment Industry Certified Public Accountant)
Judge. Have you seen it?
Mr. Panish. It's just describing the two differences. I think the CACI is pretty clear on the differences. I don't
think we're doing anything other than what's allowed under the law.
Ms. Strong. I don't... if this is about the admissibility of expert testimony, your honor, it doesn't address the
admissibility of expert testimony whatsoever, the standard for that. That is set out clearly in sargon. Again,
sargon refers to expert testimony. And, also, the standard for lost profit damages, your honor, so this doesn't
speak to that at all. The question is: can an expert give speculative testimony to the jury? And clearly the
answer is "no," and nothing in their brief addresses that.
Mr. Panish. What is the issue here?
Mr. Boyle. Right.
Mr. Panish. I thought we were in the earning capacity for spouse/victim. Is there another issue that ms. Strong
is again trying to exclude? I don't understand what... I thought she was objecting on sargon and all this last
Judge. I thought what she objected to last time is, in his deposition he said that he was uncertain, or something
Mr. Panish. No.
Mr. Boyle. No. We were there. And then I think we ended the day where she was saying even under lost
earning capacity, you have to prove it to a reasonable certainty. And that's why we did this brief to show lost
earning capacity, which is 303(d), which is different than lost earnings, which is 303... 903(c). And so that's
where we thought we were. We didn't know we were talking now about the ability of an expert to testify at all,
which we thought the court already ruled this expert was qualified and ruled that his opinions could come in.
Ms. Strong. I don't believe your honor ruled that the expert was qualified. But in terms of... I thought where
we ended up on one issue, your honor, is whether the expert can get up on the stand and opine about potential
earnings from movies, your honor, after he testified that he believes that Michael Jackson could have lost
money in movies or he could have made millions in movies. He could only speculate about that. That was his
testimony in the deposition, your honor. So as to that portion of the expert's testimony, it should be excluded
because it's speculative, your honor, and should not be submitted to the jury. And I believe that's where we're
Judge. OK. I guess that's... it's not addressing the issue of whether he would make movies at all, it's just
whether he would have been successful at it, which is a hotly contested issue. Not whether he would do it or
not, because apparently, from what I remember from analyzing this in the past, is that he had made movies in
the past: he made the movie "Wiz," and might have made some other movies. So there is some precedent for
him having made movies in the past, and something that, since potentially he had done it in the past, he could
have or may do it in the future. And whether or not he may have been successful at it is something you disagree
Ms. Strong. Well, with respect to the admissibility of expert testimony on the issue, your honor, the expert's
testimony cannot be speculative. And Mr. Erk has already indicated that all he's able to do is say that Michael
Jackson could have lost money or could have earned money, and that is speculative testimony. We're not
speaking as to the larger issue of movies in the case, your honor. It's just right now we're focusing on the
admissibility of Mr. Erk's testimony, and it's clear that as an expert, he can't give speculative testimony to the
jury. And that's what he made clear he would do if he were to opine about how much money he would have
made in movies. He would be speculating as to any potential damages to Michael Jackson, your honor.
Mr. Boyle. We're not offering that testimony. They're moving to exclude something he's not offering.
Mr. Panish. I don't think she understands what we're doing. We are claiming, as a lost future earning capacity,
his inability to make movies. It's also relevant for general damages, too, because the testimony is he was going
to do it with his son. But that's all he's going to say, and he didn't put a figure on it. So it's not speculative.
And it's supported by the evidence. And the jury can assess that in determining general damages as to what
they believe, if any, weight should be given to that. And that's all that we're offering for loss of earning
capacity, as is allowed by the CACI when the standard is not "reasonable certainty."
Ms. Strong. Then, your honor, if that's what they're proposing the expert would say, then it adds nothing to the
jury's analysis. It requires no specialized expertise to say Michael Jackson lost the ability to go try to go out and
make a movie. It's nothing that he's adding. He should not be permitted to speak to that as an expert on the
Mr. Panish. Also goes to show what he's not included in his calculations; that there are other things for the jury
to assess. I mean, first she's saying he can't put a figure on it, and he's not. Now she's saying he can't even say
it, when he did say in his deposition, which Mr. Ortega and others have testified to, as has AEG testified, Mr.
Phillips, about that issue. So I don't know what the complaint is about it.
Ms. Strong. Your honor, if you'd like to hear more, this is, again, about the admissibility of expert testimony,
and the court's gate-keeping role with respect to that, and how the court should preclude any speculative expert
testimony from the jury. So, again, if he's not putting a number on it, and all he's going to say is he lost the
ability to do movies, I think the jury can perfectly understand that Michael Jackson lost the ability to try to
make a movie. Everything else...
Judge. He lost the ability to do all kinds of things once he died.
Ms. Strong. That's why I argued it's even irrelevant, your honor.
Mr. Panish. Irrelevant?
Judge. OK. Then you would need no expert to give testimony, I would think, if that would be the case.
Ms. Strong. No, your honor. I would say if there was a reasonable expectation, reasonable basis to say that
somebody would have done something in their life and would have earned a certain amount of money, you have
to have reasonable basis, your honor. And, again, it goes back to simple statutes where damages must be
certain. And unless there's a reasonable basis to damages... this is sargon. It's also throughout the case law, it's
listed everywhere. In Allen vs. Gardner; Sargon vs. Southern California; in cal.app... it's 126 cal.app.2d 355.
These cases say that a satisfactory method for obtaining a reasonably proximate estimation of damages must
exist, or there must be some reasonable basis of computation of damages. If there is not a reasonable basis to
compute damages, your honor, then it would be speculative, and the jury can't award damages. But I don't want
to get confused. There are two different things. There's the admissibility of expert testimony, and what can the
jury use as the basis for damages? Right now we're only focusing in on the admissibility of expert testimony.
He's not adding anything to the jury, to the extent he's just saying he lost the ability to make movies. There's no
specialized expertise that's used to give that opinion, your honor, and to the extent they're now saying he's not
going to say he could have made millions, they're just going to say he can't do movies because he passed away.
Again, there's no specialized expertise needed for that. And if he's not going to put out a number and say
millions, then he shouldn't be speaking to the issue at all.
Judge. OK. I'll let you renew your objection later. But I'll allow the testimony.
Mr. Panish. All right.
Ms. Strong. And then, your honor, just for the record, I'm not going to argue the issue, I just would like to get a
ruling so we have it for the record. With respect to motion in limine no. 6, which addressed speculative
damages, I'd like to confirm that your honor is denying that motion as to future tours, increase in royalties,
Ms. Strong.... and movies based on the case law and arguments in motion in limine no. 6.
Mr. Panish. And your order.
Judge. And all the evidence at trial, and all the evidence presented in connection with all the other motions in
limine, and all the arguments that have been presented.
Mr. Panish. And your order that you wrote, also.
Ms. Strong. OK. I just wanted... because there isn't a technical ruling on motion in limine no. 6, your honor.
Mr. Panish. There is.
Ms. Strong. And as to... there's other elements of that motion that I think are moot because we filed that
motion before the experts were deposed, so the rest of that motion need not be decided, your honor.
Judge. OK. Thank you.
Ms. Strong. Thank you, your honor.
Judge. Is it Mr. Erk?
Mr. Boyle. Yes, your honor.
Judge. Let's bring him in.
(the jury enters courtroom)
Judge. Good morning, everybody. The jury: good morning.
Judge. Counsel, will you make your appearances?
Mr. Panish. Yes. Good morning. Brian Panish for plaintiffs.
Mr. Boyle. Good morning. Kevin Boyle for plaintiffs.
Ms. Strong. Good morning. Sabrina strong for the defendants. Ms. Bina: Jessica Stebbins Bina for the
defendants. Mr. Putnam: and Marvin Putnam for the defendants.
Judge. Thank you. Mr. Erk was on the witness stand, and he doesn't need to be resworn, so you may continue.
Mr. Panish. Thank you, your honor. Arthur Erk, recalled as a witness by the plaintiffs, was previously sworn
and testified as follows: direct examination (resumed) by
Mr. Panish. Good morning.
A. Good morning.
Q. We left off with what you did in this case. Can you tell us, sir, what does business management... what
does that involve?
A. Business management is taking care of the everyday business affairs of my clients. Just picture it as you do
for yourself or your family: take care of the checkbook, take care of paying the bills, collect the income,
deposits, reconcile the bank accounts. We do all their taxes; their quarterly tax filings, if they're required; take
care of payroll for their employees, and their long-range tax planning as well.
Q. OK. Now, you told us on Thursday about different services. With royalty compliance, you told us about
business management. You mentioned consulting. What does that entail?
A. From time to time, because of the many years I've been in the entertainment business, both music and film,
I'm called upon to help along with the negotiations or put my comments in on negotiations. I don't usually sit at
the table when it's happening. I like to be behind the scenes. They feed me the information, and I give them my
druthers as to what I would like to see during the negotiations.
Q. And I think... what is "intellectual property"?
A. Intellectual property runs a broad span. But in my particular specialty, it has to do with music copyrights. It
covers a songwriter when he writes a song. It gets published. Whether it gets recorded or released is another
story, but essentially it's song composition. There are master recordings that are considered intellectual
property, but primarily songs.
Q. What is a "master recording"?
A. A master recording is where you have an artist... let's say it's Michael Jackson. He goes into the studio and
records the written music that the songwriter wrote.
Q. Can the songwriter be someone different?
A. Yes. Or it can be the same person.
Q. Did you prepare a demonstrative exhibit to illustrate the various forms of intellectual property and how you
deal with it?
Mr. Panish. OK. Why don't you show... mark 745-1 and 2. You want me to show you what it is? You should
have it. All right. And actually... OK. Well, let's... this is entitled, "most common path of copyright's
creation to usage." we're not copyright experts here. Copyright, can that be a complex area?
A. There are many facets to a copyright. But essentially, it's a song. You have a songwriter who writes the
music. You can have multiple songwriters on
A. Particular song.
Q. All right. So let's just start at the beginning. First, do you have to have something that can be copyrighted?
Q. And in this case, what specifically are you going to address for us?
A. Music and lyrics.
Q. Music. What is music?
A. Music is the instrumental portion of a song.
Q. Is that where someone would actually write the notes?
A. The musical notes, yes.
Q. Like we see sheet music. Have you heard that term?
Q. So it's like when you want to play the song, there's, like, the notes of the song?
A. That's correct.
Q. Somebody writes that?
A. Well, sometimes it could be just a rendition of the music, as opposed to writing out each musical note that
makes up the songs.
Q. OK. Then let's... then you said the music and then the lyrics. Is that the words to the song?
A. That's the words to the song.
Q. Can there be somebody who writes the lyrics and somebody who writes the words?
A. Could be the same person; could be different people.
Q. OK. So let's look at the chart. We have "songwriter," and then what?
A. Then the songwriter, depending on the... his environment that he's most creative in, will sit down and write
the song, whatever he envisions. Let's say it's the same person.
Q. Could it be a she, also?
A. Sure. Absolutely, yes.
Q. There's female and male songwriters?
A. Oh, absolutely. There's many terrific female songwriters.
Q. OK. So... while we're on that, can you tell us some songwriters we might know? Any famous songwriters?
A. The one that's probably been most in the media would be Diane warren who is a female songwriter. She's
written for Celine Dion, she's written for Toni Braxton, she's written for Aerosmith, Cher. She's considered the
leading female songwriter, if not in the country, in the world.
Q. All right. So we've talked about songwriters. Why don't you walk us through exhibit 745-1?
A. OK. So as we said, there's the songwriter, conceiving of the song. And this is the time that he spent when
he's writing the song, both music and lyrics. When he's completed with the song, you do one of two things: if
he's what we call a self-published individual, he will make a copy of the song and also a demo tape of the song.
Q. What do you mean a "copy" of the song?
A. Well, he would write down... if he wrote musical notes, he would write the musical notes down, along with
the lyrics; OK? So that's what writing the song means. The other way he could do it is he could have his own
little studio or go to a professional studio and record what he's creating; OK?
A. So when it comes time to register a copyright, he will make a copy of what he's done, whether it's written...
it has to be written and/or the actual demo recording of it. You fill out a form, a copyright registration form,
and send a copy of the tape and any written materials to the copyright office in Washington, DC. To the
depository, where they would register the song, and it would just remain in the depository.
Q. OK. Then what happens?
A. Then at that point...
Q. What if somebody else wrote the song already?
A. Well, at that point in time the copyright office... because you could use a different name. They wouldn't
know right away. What happens is, when the song gets recorded and released, people have their ears out there,
and they're going to automatically pick up on it and say "Hey, I wrote that song," and possibly come and say
"What's going on? I'm going to make a claim," if it's released commercially.
Q. OK. So then we go down. It says "use license." what is that?
A. Use license, for every use of a song, whether it's by the record company that distributes the song... let's say
it's the artist now, because you can have an artist that self-distributes. These days, a lot of things are done on
the internet, so you have these unsigned artists that do their own material. If they're using someone else's...
Q. When you say "unsigned," what does that mean?
A. Unsigned means not signed to a record label, whether it's a major, independent or otherwise.
Q. All right. And, by the way, let's say 25 years ago, were there dvds?
A. 25... no, there weren't dvds 25 years ago. That was the advent of cds, early '80s.
Q. So before that, was it just records?
A. There were disc records, cassette tapes and 8-track tapes.
Q. OK. Now, was that different, how calculations were done?
A. No. The royalty calculation's the same no matter what.
Q. What's changed in the music industry?
A. The distribution aspect of it.
Q. What do you mean by that?
A. Well, again, now you've had the advent of the internet in the late '90s. You all remember the name kazaa
where they had the file sharing going on. The record labels finally woke up to the fact that an internet existed,
and it was another avenue for them to sell their music. So by and large, technology has advanced by leaps and
bounds, and a good deal of the music these days are not sold in what we call brick-and-mortar stores but sold
through the internet through apple iTunes or various other services. You now have Spotify, which is a
streaming music listening, but they also allow you to buy songs, and there's other services besides that.
Q. So let's go back to the old days a little bit. So what's a use license?
A. Use license is when an artist uses... well, could be even his own song. But let's just say he's using another
person's song, using Diane warren's song. He can record the song, but he can't commercially release it until he
gets what we call a use license... or "mechanical license," is the technical term. He has to go to that artist's
publisher, and as I say... I'm sorry... songwriter's publisher. And songwriters can be self-published and have
their own server. Or they can go to a major song-publishing company, like the Sony/ATV, and request a license
to exploit this particular songwriter's song.
Q. Break that down for me. What is a publisher?
A. A publisher, in theory, and sometimes in practice, is a company that will take a song and get either... well,
they do two things. One of two things, or both. They find other artists... like, let's say in Diane warren's case,
she's just purely a songwriter. She will write songs. Her publisher will go out and seek artists to record her
songs, usually with top tier artists, but it could be, you know, an up-and-coming if they strike the right deal for
the song. Or you have an artist that writes his own material, but he goes to the music publisher to exploit his
songs further. Which means, take his songs after they've been recorded and released, and find other artists to
record his songs. Sometimes it takes on the form of... in a foreign country, you have local foreign artists, and
they'll translate the song... let's say it will be French, German, or otherwise... and that artist will record that
particular song. So you get these music publishers to find other uses for your song, not just what you use it for.
Q. Does the person that wrote the song, do they get anything out of that?
A. Yes. Currently under the US Copyright law, for every record sold, for every song on a record that gets sold,
it's 9.1 cents per copy sold.
Q. Who gets that? The artist?
A. It goes to the publishing company now, if he's got a publisher. The way it usually works out, the publisher
retains 50 cents of every dollar... forgetting about collections cost... and the songwriter gets the other 50 cents.
Q. So down below that we have "record company," "broadcast," "print," "film." can you explain those to us?
A. OK. Broadcast, which encompasses TV, radio, and any other form. Could be film or whatever, in terms of
just playing. You all might have heard there are... in the united states, there are three collecting copyright
performing societies that collect: you have a.s.c.a.p., which is the old-timer in the business, first one that was
formed; then you have b.m.i., which was formed, actually, by the record companies, because... or by the radio
stations, because they were upset that a.s.c.a.p. Had a monopoly on it; and then some 20-some-odd years ago, a
new company came in named s.e.s.a.c. These companies have what they call blanket license with the radio
stations, television stations, and the movie companies; that when music gets played on their stations, there's a
formula that they have to pay according to, and a.s.c.a.p., b.m.i. And s.e.s.a.c. Collect these over-the-air-type
royalties. And that happens all around the world. There's different collecting societies in each particular
Q. OK. So have you explained all the bottom to us? Which part?
Q. OK. We're on the record.
A. OK. So let me tell you what happens with the performing societies. They receive reports in from all the
radio stations, television stations, or otherwise. And they compile all this data, and they have all their members,
whoever signed up with those particular societies, and it's not... you know, each writer chooses which one that
they want to... or publisher and writer chooses where they want to be. So usually there's about a 9-month lag
from when it plays on the radio to when the songwriter and the publisher get reported to. So these collecting
societies boil down all the information that they get from the radio stations or TV or otherwise and calculate
how much, according to their formulas, that the publisher and songwriter would be due. Now, under each one's
provisions, a.s.c.a.p., b.m.i. And s.e.s.a.c., the songwriter has to get his money directly. Because there have
been cases in the deep, dark past in the music industry where people have bought out songwriters' interest.
Meaning, the publisher tries to collect both sides. For the protection of the songwriter, the songwriter has to get
a reporting, that's the 50 percent, and the publisher gets the other 50 percent. And this happens at various times
throughout the year, not just quarterly or whatever. So that basically will run the broadcast income. Then we
have what we call "print folio" and that is where, if you're learning an instrument, you have these songbooks
that has the printed-out songwriting material in there, the music and the lyrics. And for the student, or even for
the aficionado, they can play the song on the instrument they're doing. In return for that, usually the songwriter
gets 10 percent of either the wholesale price or the net published price. And the publisher is the one that...
music publisher is the one that strikes these deals. They have a big print folio publisher. Hal Leonard music is
one of the biggest ones in the world. They distribute this to music stores, or whatever, where you would buy it,
or you can buy it on the internet.
Q. How about "film"?
A. And film, we have what we call synchronization licenses. Totally separate and apart from the mechanical
license for just an over-the-air use. The film company has to get permission to use two things: number one, not
only the song, the music copyright, but they have to get permission to use the music. So in the case of, say,
Michael Jackson, who was signed to Epic Records, which was Sony Music, if his song ended up in a film, let's
say it's Paramount pictures, Paramount would have to go to Epic or Sony and strike a deal for a certain price to
get permission to put that song in the film. So we all go to the movies, we hear music in films. That music has
been paid for. It's a separate license, usually a worldwide license. And at the same time, they have to go to the
copyright owner, the publisher... and, again, it could be the songwriter's self-publishing... they strike a deal
with him, usually for the same amount of money they pay for the music, because they have these little things
called the "most favored nations clause" in the contracts.
Q. What's a "most favored nations clause"?
A. Most favored nations clause is a protection now that either the record company or the music publisher wants
that another song that's licensed in the movie does not get a better price than what your song is getting. Now,
that happens with usually songs that are well established, very popular, well used. If it's a new songwriter,
probably not going to get it. But for, let's say for Michael Jackson's song "Beat It," yeah, they're darn well
going to get it, because they want the best price possible on it, and that's the company's protection they're
getting the best price. They'd have to take a look, do an audit, take a look, double-check that they got the best
Q. Let's go to the next page, 745-2
Q. OK. This is entitled, "standard income path excluding performance fees." what is this referring to?
A. OK. So it's picking up where the song use is, and this is where we've started talking about the publisher. It
can take many forms. What happens is, songwriters like to hold on to their music. In the old days, especially
out of Nashville, it used to be, you get signed to a songwriting deal, you give up 100 percent of the copyright...
which is that 50 cents I was talking about... and you just became on staff. You usually got a salary, and they
would report your songwriter royalties, the 50 cents per use of the song, or half of the sync license, usually less
collection costs. Well, as the business evolved, songwriters, their representatives, the attorneys and all, business
managers, got a little bit more savvy and said "well, you really want my material, I'm not giving up 100 percent
of my copyright. I still want to own a piece." so that's where the "co-publishing" aspect comes in. Signs a deal,
gives up half his copyright, so that means he owns 50 percent of that 50 cents that the publisher gets, and he still
gets his 50 cents as a songwriter. So in effect, a common term in the industry is, "Oh, what kind of publishing
deal did you get?" "I got a 75/25 deal." the songwriter's getting his 50 cents as a songwriter, and 25 cents is his
half of the copyright. So... and there are different permutations of the deal. But in broad strokes, that's
essentially what a co-publishing deal is.
Q. OK. Did that cover that?
A. That pretty much covers that.
Q. Now, in this case, your firm and yourself were retained to assess the loss of income, future earnings of
Michael Jackson; is that right?
A. That's correct.
Q. And you told us about that on Friday. Now, did you have support and assistance from others at your firm
working on this matter?
A. Yes, I did.
Q. OK. Can you tell us who helped you, and who did you work with in this matter?
A. Well, one of which was the main managing partner, Joel Cooperman, with my firm. He oversees the
accounts of the who, AC/DC, the Allman brothers, and a couple of other accounts. I also had Gary Karlitz, he's
the head of our forensic division within the firm, Howard Fielstein and Manny Diakogeorgios. These are all my
partners. All very high-level people within my firm.
Q. And what is a forensic services group? What do they do?
A. Well, forensic services can take on many forms. They also do valuations, which we were talking about,
intellectual property. But they also are the guys that are hired... if
A. Company thinks that a fraud has been perpetuated upon it, meaning by its employees or whatever, they'll get
hired to go in and do a detailed review of the accounting records, the controls and all that, and they'll discover
whether in fact... hopefully whether in fact that... if in fact there is a fraud, what money has gone astray, and
who did it, and how was it done.
Q. OK. What percent of your time or income is devoted to working in cases of litigation matters?
A. Very little. I don't do this very often.
Q. Let's talk about that. Have you ever come to court and testified in front of a jury?
A. Yes. Twice.
Q. OK. Tell us, when was the first time?
A. Very first case I ever did was for one of my clients, the musical recording act KISS, and that was probably
around '84, or thereabouts.
Q. Was that in a regular court like this with a jury, or was that in a bankruptcy court?
A. No, it was in a regular court. It was the federal court at the time.
Q. A regular court or...
A. Here in New York, the southern district.
Q. When you say "southern"...
A. I'm sorry. It was the federal circuit, yes.
Q. OK. And, then, has there been any other cases where you've come to court as an expert witness?
A. Just... well, in front of a jury there was just one other time, which was a trademark Meatloaf case in 2005. I
was a factual witness in that case.
Q. Meatloaf. You're not talking about a food, are you?
A. No. "Bat out of hell." the artist, Meatloaf.
Q. What is...
A. Cleveland international was my client.
Q. OK. So that was involving... there's an artist called Meatloaf?
A. Yes, there is.
Q. All right. Now, have you been retained on any other cases to do what you've done in this case that may not
have gone to trial?
A. Yes. There were two.
Q. OK. What are those cases?
A. One had to do with the Notorious B.I.G., otherwise known as Biggie Smalls.
Q. Otherwise known as Christopher Wallace?
A. That's correct.
Q. That's his name. And Christopher Wallace was Biggie Smalls. And Notorious B.I.G., who was he?
A. He was the east coast version of Tupac Shakur. He was a major up-and-coming rap artist in the middle '90s
and was signed to Bad Boy records. And there was a feud going on between the East Coast and the West Coast,
and he was shot to death here on the West Coast.
Q. In Los Angeles?
Q. OK. And was there a case that came out of that?
A. Yes. In the middle 2000s. I don't remember the exact date. 2006 or '7, thereabouts.
Q. What did you do in that case?
A. I was retained... well, also, you should know I was the business manager for the estate of Christopher
Wallace from '98 to 2009. So as an outgrowth of that, plus my expertise in the business, I was asked to prepare
an analysis of the loss of future earnings capacity with respect to the estate of Christopher Wallace or Notorious
Q. And Mr. Sanders, one of the attorneys in this case, did you work with him in that matter?
A. Yes. He was the attorney on that case.
Q. For the mother and child of Mr. Wallace?
A. For Voletta Wallace, the wife, and the children.
Q. Now, any other cases involving songwriters or artists who you've been retained?
A. Just one other case in 2012.
Q. And in that case, what was the name of that case?
A. I think it was the estimate of Sean Garrett against Baptist Hospital in Kentucky.
Q. And who retained you in that case?
A. Baptist Hospital.
Q. That was the defendant?
A. Yes. I was on the defendant's side.
Q. What was your role in that case?
A. To debunk the theories that the plaintiffs' expert came up with in determining the damages in that case.
Q. What specifically did you do in that case?
A. Sean Garrett was a prominent songwriter. He wrote songs for Aaliyah.
Q. Aaliyah, the songwriter... the artist killed in the Bahamas in a plane crash?
Q. I was in that case.
A. OK. And he also wrote a big song with Lil Wayne before he did his own record.
Q. Lil Wayne is a prominent rapper?
A. Yes. And slick rick and a few others. But the real claim to fame was Aaliyah and the big Lil Wayne song,
which I think was 2006/2007. The problem with the plaintiffs' side is that they tried to make a case that Sean
Garrett would have been a successful recording artist. He had recorded an album just immediately prior to his
death, and the expert on the other side came up with all these theories how he would have sold, you know, a
couple of million records that would have resulted in tremendous airplay, and a lot of other factors. And I didn't
think his approach or theories were valid.
Q. So you gave your approach?
Q. All right. And what's the difference between that artist making that and Mr. Jackson?
A. Well, it's night and day. Michael Jackson was tried and tested songwriter and artist; had a very long career
that started, what, in the early '70s with the Jackson 5, and on continually as a solo act. So he proved his
success. He could do all facets. Sean Garrett was a very successful songwriter. Had literally been on stage
maybe three times, made all of $1,000. They released a single from his album, which, you know, in the hip-hop
industry, they tend to do each other favors back and forth. So he wrote I think 25 percent of this Lil Wayne
song, I don't remember the title, and performed in the background. And in return, Lil Wayne performed on the
single that he wrote for himself. It was an obscure, independent label. It was owned by R Kelly's manager...
Q. R Kelly, is that another artist in... he's in Detroit, Michigan?
A. Yes. He was a prominent R&B artist. And they released the single, you know, with no marketing behind it.
Sold all of 11,000 copies. And they dropped the entire project.
Q. Now, Michael Jackson, do you know any of the songs that he wrote?
A. Well, numerous no. 1 hits. I mean, "Beat It" comes to mind. "Billie Jean." the "Man In The Mirror" was a
very big one. He also wrote that big song for charity, "Heal The World." so "Don't Stop, Can't Get Enough,"
"Can't Stop Loving You." he's had a long list of songs.
Q. Now, when albums are sold, do they use terms to describe how many albums are sold?
A. Yes. Over the years they've developed these certification categories. You have gold for albums, which
means you sell 500,000 copies of records sold; then you have platinum, which is a million; and double
platinum, which is times two; then diamond, which is 10 times platinum. You can come up with all different
permutations. And each country has their own certification levels. The ones I gave you were in the United
Q. OK. Like if someone says, "oh, that album went gold" or "that album went double platinum," what does
A. If it went gold, sold 500,000 units; double platinum, 2 million units.
Q. How much is diamond?
A. 10 million.
Q. And had Michael Jackson reached these categories?
A. And then some, yes.
Q. All right. Now, in this case, do you charge for the work that you've done?
A. My normal hourly rate.
Q. What is your normal hourly rate?
A. It's $475 an hour.
Q. Do you charge that whether you're working on a case or working for a client, or do you give different rates?
A. No. One price fits all.
Q. And do all the other people that work on this case with you, do they charge, also?
A. Yes. Their normal hourly rates.
Q. And they're different...
A. They can be.
Q. ... or the same?
A. They can be.
Q. How many hours would you say you personally have devoted to working in this case?
A. Little over 200 hours. Maybe closer to 250.
Q. And other people in your firm have also worked numerous hours?
A. Much less than I did, yes. But they put in numerous hours.
Q. Have we run up a big bill?
A. So you've told me.
Q. All right. Have you ever done any work prior to this case in any way related to Michael Jackson?
A. Yes. Throughout the '80s, when I was a partner at Gelfand, I did all of his royalty audit work in the United
States and throughout Europe.
Q. Can you tell us how you were involved in helping him at that time?
A. Well, it was several different things. First audit I did for him was back around 1983. I think he became a
client of the firm just around that time, or 1982. And we were hired for the... "Thriller" just turned out to be
just a huge, huge phenomenon.
Q. "Thriller," was that an album that Mr. Jackson did?
A. One of the... yes, and one of the largest selling albums of all time.
Q. What was your involvement in that?
A. Well, when you have those kinds of sales, and knowing how... well, at least how I know how the record
companies operate, there's usually money there. So...
Q. What do you mean "money there"?
A. Meaning that they didn't pay in accordance with the contract.
Q. OK. So what did you do?
A. So I was hired to conduct an audit. In those days it was called CBS records. Now it's called Sony Music or
Sony BMG, as a matter of fact. So I went to CBS, conducted the US portion of the audit. At the same time,
sales overseas were so dramatic that we said, "Let's go visit a few countries and see how they reported it as
well." so I conducted a series of audits that probably encompassed England, France, Germany and the
Netherlands on his behalf.
Q. OK. Did you find money that was owed?
A. Plenty of money.
Q. OK. What about... did you do anything else for Michael Jackson?
A. Yes. There came a time when we got a phone call from John Branca, who was Michael's attorney at the
time, saying that Michael was interested in buying the ATV catalog.
Q. What is a ATV catalog?
A. The ATV catalog is a music publishing catalog that prominently contained Beatles songs, compositions,
among other compositions within the catalog.
Q. So, in other words, within the catalog, what's contained in the catalog?
A. Well, what we went over in the slide before. There were song compositions. It was that type of intellectual
Q. So someone put that together, and then there was money to be paid each time the songs were, as you
explained to us, were played or used?
A. That's correct. ATV was started back in the '50s. I don't know who started it, but it was called associated
television, where ATV came from. And over the years they acquired catalogs of different owners and acquired
the likes of Nat King Cole, Little Richard. They had Barry Mann and Cynthia Weil. You may not know those
names, but they were very prominent songwriters from Canada, among many other compositions. About 4,000
in the catalog.
Q. What did you do in that regard?
A. We were retained to go value that particular catalog to determine what price we thought that catalog was
Q. How do you determine the valuation of an individual piece of intellectual property?
A. Well, the terminology we use in the business is, we call it "net publisher's share." net publisher's share is the
amount of money that the publisher's left with at the end of the day after paying all co-writers, or anybody else
who has an interest in the song. So whatever is left in their pocket at the end of the day we call nps or net
publisher's share. It was our job to go, when ATV... which, at the time, was owned by an Australian
businessman by the name of Robert Holmes a'Court.
Q. Holmes what?
A. There's a little a and some kind of asterisk or tilde... I can't do it on a typewriter. I don't know where that
symbol comes from. But he was an Australian.
Q. All right. And was there any difficulty with Mr.... what was his name?
A. Holmes a'Court.
Q. Holmes a'Court.
A. Well, after we did all our work, there was just a ... it was a testing of the wills back and forth as to whether
Michael Jackson would pay his price or not.
Q. Was there something that held up the sale for a while?
A. There were a couple of things: No. 1, we valued the catalog at $40 million. He was asking $49 million.
But in addition to that, which I remember to this day, because it was, like, I was involved with it. He also
would not permit the song "Penny Lane" to be included in the catalog because he had a family member by that
Q. What is "Penny Lane"? Who sings that song?
A. The Beatles sang that song. They wrote it and they sang it. It was a major hit.
Q. Not everyone is a Beatles fan.
A. Ah, well. It's a great song. It's still played to this day.
Q. It's a famous Beatles song?
A. Yes. It's a famous Beatles song.
Q. He had a relative named Penny, and he didn't want to sell that song?
A. That's correct. And he called it a deal breaker.
Q. Did it eventually get done?
A. The deal got done without that song. John Branca was authorized by Michael Jackson to finish the deal and
went over to England to finish the deal.
Q. All right. Now, let's talk about copyrights in the future; OK?
Q. Now, is there a difference between Michael Jackson's own song catalog copyrights and the catalogs of other
A. Yes, there is.
Q. What's the difference?
A. Well, with Michael Jackson's copyrights, he was smart from the very get-go. Whoever represented him
early on had all his own copyrights in his own separate publishing company called mijac. The Sony/ATV
catalog is comprised of everybody else's copyrights, not his own. He was smart enough to keep it separate.
Q. Now, if someone dies, does that have any effect on the copyright that they own?
Ms. Strong. Objection. Lacks qualifications, your honor.
Judge. Well, lay some foundation if he's had experience with that.
Mr. Panish. Sure.
Mr. Panish. Just tell us all the experience you've had with the length of copyrights, the copyright act if
somebody dies, what... don't tell us the answer. Tell us all the experiences you've had.
A. Sure. I mean, I've valued several catalogs and estates over my time period. I have to know and understand
the life of a copyright. Because one of the big things when Michael Jackson bought, now called Sony/ATV, but
ATV, is we have this thing called diminution. So diminution is when you have... there are a couple of different
copyright acts, and I'll bore you to tears with this one.
Q. Well, they objected to the foundation, so lay it all out for us.
A. I will. The original copyright act was dated in 1909. And back in those days, it called for copyrights to be
paid. Song usage in a record, per record, sold 2 cents a copy, and it stayed that way until 1978. The life of the
copyright was 28 years plus a renewal period of 48 years. The 1978 copyright act changed that, and subsequent
rulings changed the life of a copyright. Now, in '78 the copyright law changed where the 2 cents became 2 3/4.
And as I told you before, it's now 9.1 cents. So that 2 3/4 has grown over the years but stopped in the earlier
2000s because it was getting very expensive for a record company to have to pay. So, I mean, records now
have... you know, they used to only have 10. 10 songs that went 2 1/2 minutes. Now, not only do you have 10,
you have 12, you have 15, you have 20. It depends on the record itself. Got very expensive. So then the
current life of a copyright is life plus 70 years. The old...
Judge. Life plus 7 or 70?
Witness. 70. Seven Zero.
Mr. Panish. How did that come about?
A. Well, because the intellectual property owners lobbied in Washington. You know, they got these lobbyists
in Washington. So they lobbied, and they said, "we're not being paid fairly." so, you know, you have the old
catalogs. You have Tchaikovsky, Sergei Rachmaninoff. By the way, we represent the estate of Sergei
Rachmaninoff. All these copyrights, even with the extensions, the copyrights are expiring. With
Rachmaninoff, they start expiring next year. So the...
Q. What does that mean when a copyright expires?
A. It goes into what we call a public domain. So the record companies that would, say, hire an orchestra to
record a Rachmaninoff piece wouldn't have to pay copyright royalties. They'd only have to pay that artist
royalty. So they basically have a lot more money coming to the bottom line if they sell a lot of records.
Q. OK. Now, can you tell us if somebody dies, how does that affect the copyright?
A. OK. So to give you a drastic example, if you have a 20-year-old who wrote several hit songs... and
nowadays, you have young kids, the Biebers of the world that are writing things. And, you know, he writes
some of his stuff. Probably not a prolific songwriter, so part good example/bad example. If he were to
suddenly die... I forget where he is now, 19, 20 years old... you know, the average age of a male, according to
an insurance chart's lifetime, is 75. So you're knocking off, 55, 56 years of it; right? In Michael Jackson's case,
he died at age 50. You're losing approximately 25 years of copyright life.
Q. So, in other words, if you lived a life to 75, then when you die, you got another 70 years?
A. Or the estate has the 70 years. Whoever inherits it, yes.
Q. So if you died... the older you live, the longer the copyright will last?
Q. OK. So by dying at a time less than what your normal life expectancy is, you're cutting off the lifetime of
A. That's correct.
Q. Now, you told us on Thursday some of the areas that you were assessing for the losses due to Michael
Jackson's death. Can you tell us what, again... and, I'm sorry, just the general areas that you assessed?
A. All right. Touring. We knew he was going to go out on tour. Along with touring, you have merchandise.
Merchandise, you know, when you go to a show, you can buy t-shirts, hats, whatever it might be.
Ms. Strong. Objection, your honor. I think the question was directed at what are the areas, not the substance of
the areas at this point, and lack of qualification.
Mr. Panish. What?
Judge. I think he's describing the areas.
Ms. Strong. Just want to make sure it's limited to that at this point.
Judge. OK. Tour, merchandise, that's fine.
Mr. Panish. Go ahead. Next area.
Judge. You may continue.
Witness. Thank you. Endorsements.
Mr. Panish. What's an endorsement?
A. An endorsement is where you'll get a major products company to use your name, whether it's in
commercials, maybe put it physically on a product, and to do ads and promote their product. You might get
signage. At the arena, you go to a concert, you see a Pepsi sign or a Coke sign, depending on who the artist is.
Q. What else?
A. We also calculated that he would have done a thematic show in Las Vegas. And along with that would have
been additional royalties, which are commonly known as grand rights. When you're putting something on stage
or staging something, there's another aspect... we said that copyright has many facets to it. There's another
facet called grand rights. And to stage a show, just take Broadway, you have music in Broadway. They have to
go to the copyright owner, which is the publisher, and reach a deal to be able to use the music in the show.
Similar to what a sync license is, but usually it's gauged at an average of 5 percent of the box office. So it's a
significant thing if you get your music in a stage show. And then there's the master recording rights. They have
to strike a deal for the master rights to use... and in this particular case, they would have done prerecorded
Michael Jackson music. So they would have had to pay a fee for that.
Q. All right. Now let's talk about your experience. Tell us all the experience that you have, training,
background and experience and work that you've done, that allows you to assess these areas of damages?
Ms. Strong. Objection. Compound, your honor.
Judge. Overruled. You may answer.
Witness. Thank you. We talked previously about my royalty audit experience. I don't think we need to go over
that ground. I've been doing that since December of '78, so I've been around a long time, represented a lot of
prominent artists around the world. Still do. Unfortunately, I can't tell you the names of the current ones. I do
intellectual property valuations, mainly for estates. I did the big catalog purchase back in the ATV time, so I
have a full understanding of that. I also do what we briefly touched upon as the business management. And I
left Gelfand in May of '88 because Marshall Gelfand did not want me to do anything but royalty audits for the
rest of my life, and I said that's not exactly what I wanted to do. I mean, it's great expertise, I'm very good at it,
but I wanted to start to get into business management, because I was interested in it. So I left Gelfand and
began to acquire business management clients, which means I started picking up some small acts. We call them
baby bands. The newly-signed ones, not tried and tested yet. And fortunately, a few of them became much
bigger acts. And not only did they sell a lot of records, but they did extensive touring. So that's why I became
very familiar with touring, all the components that go into touring, and continuing on helping negotiate the
deals from time to time. But also know that there's a personal manager involved here. They're the ones that,
along with the entertainment attorney, negotiate the deals. What they'll do is feed me information, and I'll help
put together the components or evaluate the components of the deal.
Mr. Panish. And when you deal with tours, you deal with merchandising?
A. Absolutely. It's an integral part of the tour, what we call extra money. Usually goes along with the deal.
Q. What work have you done in that regard?
A. Well, not only have I, you know, looked at the merchandise deals to see if they were, you know, good or
not, and opined on them, but I've done merchandise audits. I did a Brittany Spears's merchandise audit at
Bravado, which we'll talk about at another time here. Bravado is the largest merchandise company in the world.
We did... well, actually, I'm sorry, that was Sony Signature. Shania Twain was Bravado, so I did a Shania
Twain merchandise audit. I'm fully familiar with the components, from just about the creation, to the prints that
they do, to the ultimate distribution.
Q. OK. Did you... on Thursday you mentioned something, you had done some work with KISS?
Q. You worked on some valuations on the case for KISS?
Q. What was that about?
A. We... well, the court case was... now, I was the normal royalty auditor for KISS. And I did an audit of
Polygram records, which is now known as Universal Music. There's been many mergers and consolidations
over the years, including MCA Records, Interscope, Def Jam, whatever's the current company. But back then it
was Polygram Records. KISS was originally signed to Casablanca Records, which was then bought out,
merged into Polygram Records. There was a clause in the contract that prevented... and KISS had become very
big by 1980, so this is from their 1980 contract. Became very big by 1980 and had a clause in their contract that
prevented Polygram from dumping surplus, unsold record discs and cassettes in the market, thus diluting the
value of KISS. And Polygram did just that. It's a term called schlocking or surplus sales. Well, they did it, and
it was worth a lot of money. We came up with a claim. They refused to settle on it. They needed written
permission to do this, by the way, so thus the reason for the claim. They refused to settle, went to trial, and
KISS prevailed in the trial.
Q. OK. And you worked with them on that?
A. Yes, I did.
Q. OK. Now, let's talk about the documents and the things that you reviewed regarding the world tour. What
did you review?
A. Well, I reviewed numerous depositions; I reviewed the AEG contract with Michael Jackson for the world
tour; I reviewed the... there was a picture development deal that Michael Jackson signed with AEG I reviewed
numerous deposition testimony, as well as recent trial testimony.
Q. Did you review Kenny Ortega and Karen Faye's contract with AEG?
A. Yes, I did.
Q. Did you review e-mails regarding plans that AEG had for Michael Jackson and the tour?
Q. Did you review e-mails from Randy Phillips regarding specifically AEG's plans or what they planned to do
with Michael Jackson?
A. Yes. There was one in 2008 that laid out all the plans.
Q. Did you review trial testimony from Mr. Trell, Mr. Gongaware, Mr. Phillips and Mr. Ortega?
Q. All right. I'm not going to go through all the testimony.
Q. Did you review specifically, though, the testimony of those witnesses, if they had, regarding touring?
Q. Did you review budgets for tours that had been prepared by AEG?
Ms. Strong. Objection. Vague, your honor.
Judge. OK. Budgets for "This Is It"?
Mr. Panish. I'm sorry.
Mr. Panish. I said, did you review touring budgets for Michael Jackson for world tours that had been prepared
by the executives of AEG for their plans and Michael Jackson to go on a world tour once the 02 shows had been
Q. Did you review handwritten notes of Michael Jackson?
Q. Did you have conversations with Michael Jackson's son?
Q. Did you review deposition testimony of Michael Jackson's attorney?
Q. John Branca; right?
Q. Do you know who Mr. Branca is?
A. For many years.
Q. Just generally, who is he?
A. John Branca is one of the leading entertainment attorneys in the music industry. For many years and today.
Q. Did you review Randy Phillips's trial testimony regarding Mr. Jackson's intentions?
Q. Same thing with prince Jackson and same thing with Kenny Ortega?
Q. OK. Did you review some of the handwritten notes in the box that was retrieved by Taj Jackson regarding
Mr. Jackson's future plans?
Ms. Strong. Objection. Relevance, your honor. Improper opinion testimony.
Mr. Panish. OK. Now, you know who Kenny Ortega is?
A. Yes, I do.
Q. Generally, who is he?
A. Well, besides being the musical director and setting up Michael Jackson's show, he's become a prominent
film director. He did the trilogy of the High School Musicals.
Q. Did you read Mr. Ortega's testimony here in court whether or not he had been approached to get involved in
film work with Michael Jackson?
Q. Did you read Mr. Ortega's testimony as to whether or not he thought Mr. Jackson would be successful in the
Q. Regarding the clothing and the merchandising, did you review testimony of a man named Dennis Hawk?
Q. Did you review Michael Jackson's handwritten notes regarding that?
Mr. Panish. Are we taking a break or... I just looked. I don't know. I don't have to.
Judge. What time did we start? The clerk: about 10:10, 10:15.
Judge. You want a break?
Mr. Panish. "No"? The vote is no. All right. Let's go.
Mr. Panish. All right. Did you... in the materials that you reviewed, did you see whether or not Michael
Jackson had any intention of performing any shows in Las Vegas using his songs that he did not personally
Ms. Strong. Objection, your honor. Relevance, given we have not established qualifications for touring,
merchandise, sponsorships or shows in Las Vegas.
Judge. Wait a minute. Your question is... can you repeat your question?
Mr. Panish. Yeah.
Mr. Panish. My question is: did you ever review any materials regarding Michael Jackson's intentions of
having any shows in Las Vegas which he didn't perform in?
Judge. Which he didn't perform in?
Mr. Panish. Right. Using his songs.
Judge. OK. And your objection?
Ms. Strong. And the objection is relevance to the extent we're talking about, arguably, some of the substance of
the testimony without establishing expertise about touring, merchandising, sponsorship or the show in Las
Judge. OK. Overruled. You may answer.
Mr. Panish. Your honor, I mean... don't want to argue. I'm sorry.
Mr. Panish. Did you review testimony and information as to whether or not Michael Jackson had intentions to
record future music?
Q. What was your understanding of that?
A. Well, from his son Prince's testimony, he was always recording music. His father was always involved with
music. And also with his nephew Taj.
Ms. Strong. Objection. Move to strike. Outside the scope of his expertise. This opinion testimony was not
addressed in his deposition.
Mr. Panish. That's wrong.
Mr. Panish. All right. And you actually reviewed Taj Jackson's testimony regarding working with Michael in
the future; is that right?
Q. All right. Now, with respect to these areas that we've talked about, did you assess whether or not there was
a numerical value that could be placed on these losses?
Ms. Strong. Objection. Vague.
Mr. Panish. Did you do that for every possible loss?
Q. OK. Were there certain ones that you did not place a financial value on?
A. The ones that we discussed a little bit earlier. Oh, that we did not? I'm sorry.
A. Yes. There were several that I did not place.
Q. What are those areas?
A. Movies, clothing, shoes. Was also where he wanted to do something called crystal palace in the Middle
East. There was probably a few others besides that.
Q. So, in other words, in those areas, you have not assessed any... or you have not placed a financial figure on
those loss of future earning capacity; is that right?
A. Yes, that's correct. And I think that... I wanted to let the jury decide just so long as they know about them.
Q. All right. Now, let's talk about the things that you did assess financially. Now, did you do... how would
you describe the evaluation? Liberal? Conservative? Middle of the road? How would you describe?
A. Extremely conservative. I'm a conservative guy to begin with.
Q. Why do you describe it as conservative?
A. Well, I mean, you can come up... based on the wild demand for the tickets... they sold 750,000 tickets in
five hours, and I think in Phillips's testimony, he said there was about 525,000 still waiting in the cue to buy. I
mean, that's pretty wild.
Q. Is it normal that people just buy one ticket, or do they usually... was there a number they could buy up to?
A. I think they could buy up to four. I mean, I didn't know what the extra half a million would have translated
Q. In other words, if everybody bought one ticket, it would be 500,000; if everybody bought four tickets, it
could be 2 million?
A. That's correct.
Q. That's just as of the beginning?
A. That's just the beginning.
Q. All right. In just a few hours?
A. Record-breaking time. Never happened before and still has never happened again.
Q. All right. So you're saying that you did a conservative analysis. Why do you say that?
A. Well, because I actually used AEG's budget numbers to translate this demand into the numbers that I
Q. OK. What do you... when you say "I used AEG's budget numbers," explain what you mean.
A. AEG prepared budgets with respect to the "This Is It" tour, and there were two different ones: they had an
earlier one which was the lower exchange rate of 1.45, and subsequent one at a $1.60, lower.
Q. Stop. "exchange rate." what are you referring to?
A. OK. The initial part of the tour was to take place in England, and they used British pounds.
Q. Don't they use Euros there?
A. No. The Brits refused to sign on.
Q. OK. So England pounds?
Q. So you have to then, if you're doing the calculations, if you want to do it to US dollars, you have to do a
A. Yes. The British pound's, surprisingly, worth more than the US Dollar.
Q. Do you know what it is now?
A. About $1.50.
Q. OK. So, in other words, if you wanted to buy one British pound, how much in US dollars would you have
A. 1.50 plus the 3 percent vig that the bank charges you for.
Q. Sounds like bookmaking.
Q. Vig is what?
A. A commission.
Q. A tax? All right. So you have to pay $1.50 plus 3 percent?
Q. Now, at the conversion... at the time when
A..e.g. Prepared these calculations, did they do it with different conversion rates?
A. Yes, they did.
Q. Which conversion rates did AEG's management people use?
A. They used $1.45, which, when you look at the exchange rate chart, probably occurred in February of '09.
And then they used $1.60, which I determined was the exchange rate in effect in May of '09.
Q. And would it be fair to say that the exchange rate fluctuates to some degree?
A. It can on a daily basis. It's been fairly stable lately.
Q. So between $1.45 and $1.60, what is that? Like 8 percent?
A. Yeah. Well, you remember, back in those days, the economy here was terrible. So when business is slow,
interest rates go down, and thus foreign countries that are doing better, their currency is worth more than our
Q. But there is some fluctuation?
Q. And AEG recognized that, and they prepared figures at two different exchange rates?
A. Yes, they did.
Q. OK. What else did AEG do in their calculations?
A. Well, they determined what the gross revenue would be, which, you know, would be the number of tickets
sold, and the price that they sold at. And they also came up with an estimate of what they would sell as
merchandise along with the shows. Now, understand, the original budget that I looked at was for only 30
shows. They had... they had broken it up into two steps because of different... well, we won't get into the
value-added tax situation, but it was for 30 shows. It wasn't for 50 shows, but the economics wouldn't change.
Q. Did you assess how many seats were in the arena, and things like that?
A. Yes. Initially, incorrectly, we looked up the 02 as a 20,000-seat capacity. And then based on testimony, we
looked a little closer at the numbers. It averaged 15,000 a night; thus, 750,000 seats for 50 shows instead of a
Q. How did you go about assessing what the ticket prices would be in Mr. Jackson's lost capacity for the world
A. Well, we knew that the... what was testified to, Gongaware, was an average of around 80 pounds or so. But
what we did was, we took the top five grossing tours on a per-show basis, and saw what these... what we call
top tier artists were charging for their shows, and we took an average ticket price. Some were much higher than
we use, and some were lower.
Q. Did you take into consideration the fact that initial tickets that were sold were sold for great Britain?
A. Absolutely, because if you used the $1.45 exchange rate at what AEG said was the average ticket price,
you'd come very close to the number we used.
Q. For the number of tickets that were sold in England, great Britain... is there any difference between great
Britain and England?
A. Well, great Britain is comprised of Scotland, Northern Ireland.
Q. Let's use great Britain. It that more people, great Britain or England?
A. Great Britain has more people.
Q. If you take that into consideration, the population of great Britain, what percent of the population purchased
A. About 1.4 percent.
Q. OK. Now, did you consider Randy Phillips reporting to Philip Anschutz that they could have sold out 100
A. Yes, I did.
Q. Did you take into consideration Randy Phillips's e-mail saying that they could have sold out 200 shows in
great Britain alone?
Ms. Strong. Objection, your honor. Hearsay, lacks foundation.
Witness. There was an e-mail to that effect, yes.
Mr. Panish. Well, let's take a look at it since there's an objection. It's 693-324 in evidence at this trial. Let's
look at that. All right. This is in evidence (indicating).
Mr. Panish. And this is Randy Phillips writing to David Campbell, AEG worldwide UK, and cc'ing Mr.
Leiweke. Did you know Mr. Leiweke? Did he work for AEG?
Q. Was it your understanding that he was the CEO Of AEG?
A. I believe so.
Q. OK. And did you consider this e-mail and Mr. Phillips talking about the demand and the number of shows
at the 02?
Mr. Panish. OK. Let's look at exhibit 112. This is an e-mail from Mr. Phillips to Bill Silva dated March 14th,
Ms. Strong. Is it in evidence, Mr. Panish?
Mr. Panish. I believe so. It's an AEG e-mail.
Ms. Strong. Doesn't mean it's in evidence.
Mr. Panish. Do you object to it?
Ms. Strong. If it's not in evidence, yes.
Mr. Panish. You object to an AEG e-mail?
Ms. Strong. I just wanted to know if it's in evidence or not, given this is an expert that can't lay foundation for
Mr. Panish. It's an AEG business record.
Mr. Panish. Admission of a party opponent.
Ms. Strong. It looks like it's in evidence, your honor.
Judge. It is? OK.
Ms. Strong. Not an issue.
Mr. Panish. So you don't object...
Ms. Strong. No.
Mr. Panish.... to your own exhibit?
Mr. Panish. All right. Now, there was an objection before about the number of shows that Mr. Phillips was
saying to Bill Silva. Subject "Congratulations." did you consider this?
Q. Why don't you read it into the record, please?
A. The e-mail is from Randy Phillips to Bill Silva. And I've known that name for many years.
Q. Who is bill Silva?
A. He was a prominent executive in the touring business.
A. All right. It's a congratulatory e-mail dated march 14th, 2009. Says: "Me too. There's not a series of
concerts, it's more a cultural phenomenon. We could have done 200 shows based on demand. Left 525,000 in
the cue when we stopped selling. Major stars like Coldplay, Akon, Black Eyed Peas, etc. Want to support. We
so underestimated the demands. Now I have to get him on stage. Scary."
Q. So did you consider this in making your projections of whether or not there was a demand?
A. For worldwide demand? Absolutely.
Q. And the fact that Mr. Phillips is writing that e-mail; right?
Mr. Panish. Let's look at exhibit 693-339. Before we do that, let's make sure it's in evidence.
Ms. Strong. It does not look like it's in evidence. I don't believe it's in evidence, your honor.
The clerk. 693-339?
Mr. Panish. Yes.
The clerk. I'm showing it is, your honor.
Mr. Panish. Thank you. So that's in evidence.
Ms. Strong. Not...
The clerk. I'm showing it's in.
Mr. Panish. You object still?
Ms. Strong. We had it not in evidence, but if it is, it is.
Mr. Panish. OK. This is Randy Phillips again writing about: "We never thought we could sell 50 shows out in
one city. The fact is we could have sold more than 100 shows." and then it says: "We have a 4-year plan that
includes Australia. I would be interested in hearing your thoughts on what an Australian tour would look like
from a routing and financial perspective." did I read that right?
Q. Did you consider this e-mail written by Randy Phillips, the CEO of AEG Live, in assessing future tours?
A. I did, and set it aside in terms of the length of the tour.
Mr. Panish. And let's look now at 693-341. And I'm not positive, so we better check. Don't put it up yet.
Ms. Strong. I have this as not in evidence, your honor.
Mr. Panish. 693-341.
The clerk. 341?
Mr. Panish. An e-mail from Mr. Phillips and Gongaware.
Ms. Strong. It's not from Mr. Phillips or Mr. Gongaware.
Judge. It's to Mr. Gongaware.
Mr. Panish. To Mr. Gongaware. And it's forwarded, actually, by Mr. Phillips in the bottom there. But if you
want to object.
Ms. Strong. I don't see it.
The clerk. I'm not showing it.
Judge. The clerk doesn't show that one, which doesn't mean it can't be the basis of his opinion. You just can't
show it to the jury.
Mr. Panish. Well, do you see that, sir? I'm not going to show it to the jury right now.
Q. Did you rely on that for the basis of your opinion?
Q. And don't tell us exactly what it says, but why did you rely on that for the basis of your opinion?
A. Because the majority of the tickets showed for the English show were bought by English people.
Q. And why was that important?
A. That the rest of the world demand remains untapped.
Q. OK. If we take the Mr. Phillips's statement of the number of tickets sold, and the number of people waiting
in the cue... does that mean, like, in line?
A. Yes, it does.
Q. Do you have an idea of how much that equates out to of just the population of great Britain?
A. If you added it all together, if you did 200 shows, simple multiplication. 5.6 percent of the English
Q. Did you do an exhibit for that?
A. We did a pie chart.
Mr. Panish. OK. 764. You should have that. It's a pie chart.
Witness. It's a pie chart.
Mr. Panish. OK. Is that OK?
Witness. No, it's not this one.
Mr. Boyle. It's 767, is what you want, Brian.
Witness. There it is.
Mr. Panish. OK. Let's look at 764, though. That shows seat projections, I think.
Mr. Panish. OK. Before I put it up, let's just let Ms. Strong get that.
Ms. Strong. OK.
Mr. Panish. OK? All right. Let's show that, 764.
Mr. Panish. Tell us what that is, sir.
Witness. These were the seats that we projected to be sold for each of the territories that we had Michael
Jackson touring in.
Mr. Panish. How did you do that? OK. It says... on the left side it has "Great Britain," "Central Europe,"
"Asia," "India," "Australia," "US." across the top, it says "population," "Great Britain," "Percentage," "Seats at
1.4 percent of population," "Actual seat projection," "Michael Jackson revenue." why don't you walk us through
each category and tell us how you did that?
A. Well, basically, in England, great Britain, we said that 1.4 percent of the population bought tickets. So it's
750,000 seats. If we applied the same metric to each of the other territories or continents I anticipated Michael
Jackson going to, based on contracts and all, if you see seats at 1.4 percent of the population, which is that third
column there... and I guess let me use the pointer. That one... you could see the number... I mean, if you just
use simple percentages to translate into number of seats that could have been sold, it would have totaled 81
million. We estimated 12.9 million tickets to be sold, not 81 million.
Q. OK. How did you get 81 million?
A. By using the percentage of the English population that bought tickets, and apply it to each of the territories
that we had him going to.
Q. And that was 5.6?
A. No. It was 1.4.
Q. OK. What would 5.6 have been?
A. It would have been such an astronomical number, it would have blown everybody's socks off.
Q. So four times the amount?
A. Yeah. It would be four times. You're talking about 320 million seats.
Q. So four times 1.4 would be 5.6?
A. Yes. Pretty good for an attorney.
Q. Don't push it.
A. I'm sorry.
Q. All right. So is that a liberal, conservative, middle of the road analysis? How would you describe it?
A. Mine is way at the bottom. Conservative.
Q. Now, why did you use the conservative amount?
A. Because I was asked to.
Q. Why is 1.4 a conservative figure to use?
A. Well, it wasn't even 1.4. We didn't apply 1.4 to all the other territories. I established a routing plan as to
where he would go and the stadiums he would play. And the numbers in the column for actual seat projections
are the number of seats that I came up with to total up 12.9.
Q. You don't have Australia?
A. No. We have that in what I call deal 2.
Q. OK. And the demand in Great Britain was equal to 5.6 percent?
A. According to Randy Phillips, it was.
Q. But you only used the 1.4?
Q. All right.
Mr. Panish. Now let's look at 767-1, which I think is the pie chart.
Witness. That's the one.
Mr. Panish. OK. What does this illustrate?
A. That shows you just England, compared to the rest of the world. You're looking at a tiny little sliver of the
Q. So, in other words, England has approximately 1 percent... great Britain, actually... no, England. I'm sorry.
Great Britain has approximately 1 percent of the overall population in the world?
Q. Now, did you consider how long the tour... how long the tour would last?
A. Yes, I did.
Q. OK. What did you consider?
A. Approximately a 3-year period.
Q. Why didn't you use four years like Mr. Phillips wrote in that prior e-mail?
A. The contract was for approximately three years that Michael Jackson signed with AEG
Q. Could you have used four years?
A. Based on Mr. Phillips's testimony, absolutely.
Q. Now, did you take into consideration how many shows... strike that. Did you take into consideration
Michael Jackson's history of touring and how many shows sold out, and the like?
A. Not really.
Q. Why not?
A. Because he said, according to the testimony, that this was going... this is it. This was going to be his final
tour. So I plotted out what I thought would fit in his schedule and was at the rate of less than two shows per
week, even considering he did multiple dates within the same city, but it averaged out to less than two shows
Q. OK. Do you know how many... multiple platinum is what? More than 2 million?
A. More than 1 million.
A. Multi-platinum. Platinum is 1 million; multi-platinum is in excess of.
Q. All right. Do you know how the sales of his albums did worldwide?
A. Quite fantastically. As a matter of fact, as he matured as an artist, the rest of the world doubled and tripled
his US sales.
Q. Do you have any figures you could give us?
A. I think we created a chart for that.
Q. OK. I think that's 768-1. No, maybe... is that it? Could you just look at that?
Mr. Panish. Is that the one you're referring to?
A. No. That's a tour... summary of the tour, metrics.
Mr. Panish. I don't know which... I do not have that.
Witness. That's all right. We can talk about how many albums he sold.
Mr. Panish. Why don't you just tell us generally...
A. Generally in "Thriller," he was more than 40 million units on it. One of the greatest selling albums of all
time. "Bad" went multi-platinum. I forgot how many times platinum.
Q. Nine times.
A. Nine times, and basically tripled for the rest of the world. 27 million. "Dangerous" was, what, maybe five
times platinum. Thereabouts.
Q. Seven times multi-platinum?
Ms. Strong. Objection. Counsel is testifying.
Judge. I'm assuming he's asking the witness if that's the case, and the witness is agreeing.
Mr. Panish. Let me ask him.
Mr. Panish. I wrote it down.
Mr. Panish. Is it consistent with your recollection, "Off The Wall," 1979; sold world, 20 million?
Q. "Thriller," 1982, 29 times multi-platinum; world, 65 million?
Q. "Bad," 1987, nine times multi-platinum; world, 45 million?
Q. "Dangerous," 1991, seven times multi-platinum; world, 32 million?
Q. "History," 1995, US., seven times multi-platinum; world, 20 million?
Q. "Invincible," 2001, US., two times multi-platinum; world, 13 million?
Q. And then the... called his greatest hits, "No. 1 Ultimate Box Set, Essential Michael Jackson All"... well,
A. Yes. But much lower.
Q. Except for the ultimate collection only was platinum?
Q. All right. So when you made your calculation as to the sale of worldwide tickets, did you use... did you
consider the fact of how many albums he sold worldwide?
A. OK. Well, if you look at it historically, sure, he has a huge fan base.
Mr. Panish. OK. Let's look at 768-1, which is a summary of tours, tier 1 damages.
Mr. Panish. Now, did you do... before we show that, in your analysis, do you have different tiers of damages?
Q. Which ones specifically are you going to talk about today?
A. Tier 1, which is where I'm reasonably assured he would have done what we anticipated him to do. That was
in the plan. So on that, that's where I'm reasonably sure there's no speculation in my numbers; thus, we talked
about conservative numbers. Very conservative numbers.
Q. OK. Let's look at a summary of the tours here. All right. Why don't you just tell us here... by the way, did
your office develop these slides?
Q. Tell us what we are looking at.
A. Well, this is really where we have the average ticket price came from. We probably would want to look at a
different slide if you want to look at each of the years, 2009, '10, '11, and even the all-time grossing tours. But
in this particular slide, it shows the $108 as what was reasonable for tickets.
Q. Just walk us through how you did that.
Q. What is a metric?
A. A bunch of numbers.
Q. Does it mean it's like an international measurement?
A. No, no, no. No, it's not meters. I mean, it's derived from that, but it's not meters versus feet, or anything
Q. OK. So just walk us through what you did.
A. All right. So in 2009, we have that first line there, "The top 25 tours of 2009, tier 1 only." and tier 1 only we
defined as the top five grossing artists, highest grossing average per show, to determine what our average ticket
price is. So what this chart shows is our beginning where we started with the $108. And you can see from each
of the succeeding years, the tier 1 only, the fluctuation in prices. When you get to 2011, you're at $118 for tier 1
artists. We didn't use that ticket price. We started at 108, used what existing inflation was to increase the prices
from year to year. And inflation was very low.
Q. What is a tier 1 artist?
A. Tier 1 artists are the top guys like u2, Madonna, Bruce Springsteen, Bon Jovi.
Q. Michael Jackson?
A. Well, Michael Jackson was in a class all his own. He is known as "The King Of Pop." there's nobody that's
come close to him.
Q. All right. And then you have "AEG 02 budget" at the bottom; is that right?
A. The 02 budget, yes.
Q. OK. And tell us what that is.
A. Well, the... we covered that a bit before. In the AEG budget, they plotted out their numbers where they
thought they would... how much revenue they would make, whether it was from ticket sales, merchandise, and
what the bottom line would be. We used the AEG budget. They called it "Production Budget no.2," which is
the one that was at the $1.60 exchange rate, because that would have been the most recent budget before the
tour was supposed to kick off. The way, average attendance per show, is it supposed to be 20,000 or something
A. In terms of... you mean for Michael Jackson?
A. It was supposed to be 15,000.
Q. So that 20 should say 15?
A. Yes, that's correct.
Q. And that's what you told us about earlier?
A. That's correct. I told you about the error there.
Q. Just noticed that. Now, when you used 31.33 percent, what is that?
A. That was the average net income to the artist, meaning Michael Jackson, based on the AEG numbers,
excluding merchandise. So it's just strictly ticket sales, less expenses, what's leftover as a percentage of the total
box office revenue.
Q. Based on...
A. Net box office revenue.
Q. Based on AEG calculations?
A. Based on AEG calculations.
Mr. Panish. Let's now identify 769-1 to 3. I think these might be what we were talking about here. Let's wait
for counsel. OK. Is that all right, ms. Strong?
Ms. Strong. Yes.
Mr. Panish. OK. So let's take a look at that. Let's look at 769-1. It's kind of small, but let's see if we can blow
Mr. Panish. What is this?
A. The industry magazine, the music industry magazine is called Billboard. Billboard tracks what artists who
have contracts... every issue comes out every month. They have the top box office grossing people. What this
chart reflects is that Billboard published the top grossing acts for 2009. So these are the most popular selling
acts for 2009.
Q. Does that mean concerts?
A. Concerts only.
Q. OK. And then... so we've got... and they go by the money; right? "Average Gross Revenue Per Show"?
A. That's correct.
Q. What's interesting is that Paul McCartney, according to this, only had 10 shows, but he was the third
grossing artist. How would that be?
A. Very expensive tickets, and he played bigger venues.
Q. But his total attendance at only 10 shows was 275,000 people. And Bruce Springsteen played at 72 shows,
and he had 1.7 million people, and he only got 2.171 million?
A. He charges less for his shows.
Q. And then I note that the only two that sold out where... that number of sell-out shows, in other words, if
they had... they sell everything?
Q. Is there only two?
A. Well, looks like you have U2 and Madonna.
Q. Everybody else, even Paul McCartney, wasn't selling out?
A. That's correct.
Q. Billy Joel and Elton John was close, though. Sold out 31 out of 32?
A. And Celine Dion was close.
Q. Celine was 33, and she sold 31, but some of them didn't even sell out half?
A. That's correct.
Q. Who is Andre Rieu?
A. I don't have a clue.
Q. I don't, either. Must be some... he only sold 18 out of 112. All right.
Q. So, you used 108.12 as the average price per ticket; is that right?
A. That's correct.
Q. Whereas the average of all of these 25 artists was 80.15?
A. That's correct.
Q. Why did you use the higher average?
A. Well, the problem that we had is that there was nobody in the class of Michael Jackson, so we took the next
level down. I think... if you picture a pyramid, he's at the top of the pyramid, and then you get the next level
Q. Like what you call tier 1 artists?
Q. You could use a higher number if you wanted?
A. Well, there's no question about it. I think... you know, I read correspondence from AEG that they didn't
expect this wild demand, and they probably undersold the tickets. So, you know, we created a chart that
showed what we called a sensitivity study, all the different prices. We don't know what the final result would
have been, but there could have been different scenarios.
Mr. Panish. Let's look at 770-1. You bring up that term "sensitivity." before you put it up, let... Ms. Strong?
770-1, sensitivity chart. Are you with me?
Ms. Strong. Uh-huh.
Mr. Panish. Is it OK to put it up?
Ms. Strong. Yes.
Mr. Panish. Thank you.
Mr. Panish. OK. Tell us, what are we... it's called a sensitivity chart. What are we looking at here?
A. Well, here, because of the wild demand, and people still waiting in the cue, there probably would have been
more if there was no further time that the tickets were available, that... you know, promoters, they try to gauge
what the demand's going to be, and they try to charge accordingly. And what happened here is the demand was
so wild that you could have charged probably more for the ticket and still sold the shows out. So what we did
was, we presented different ticket price scenarios and what the resulting tour revenue would be. We didn't
affect any of the other categories, just strictly for revenue.
Q. And so explain what we see across the top. "Ticket Price," that is under the assumption that each different
ticket price was from $200 to $108?
A. Right. So the numbers we used was the 108 and with 18 cents. It was rounding from the 12 cents. And it
turned out to be 1,127,000,000 and change.
Q. And what would that be?
A. Excuse me?
Q. What is that?
A. That is the conservative number we came up with... for tier 1 damages that's in our report.
Q. For what?
A. For the lost economic earning capacity of Michael Jackson.
Q. All right. Let's break it down. "Tour." OK. You have... as you told us, you have five categories: tour,
merchandise, endorsements, Las Vegas show and Las Vegas royalties.
Q. OK. Then you used the various prices. So if you used the higher ticket price of $200, what would the
projected gross be?
A. Well, the net to Michael Jackson would be 8... approximately 836 million versus 452 million at the $108
Q. So when you say... when we add all this up, and then you have "Projected Income," then it says "Less MJ
Consumption." what is that?
A. MJ consumption is Michael Jackson consumption, is what we calculated over a period of time how much
Michael Jackson would spend collectively over 15 years. We call that consumption.
Q. So you have to take out of the projected income what you would spend or use?
Q. And so then what are the ranges...
Judge. Why 15 years?
Mr. Panish. Good question.
Witness. 65, retirement. So we went from age 50 to 65.
Mr. Panish. So did you only calculate 15 years of loss?
A. For consumption, yes.
Q. Did you actually do less than 15 years for the...
A. Well, originally our thought was just for the three years, because so much money would have been earned
from this tour, if it was invested wisely, which it probably would have been, the resulting income thrown off
from the investments would have taken care of the consumption.
Q. OK. But you used 15 years?
A. We wanted to be conservative.
Q. All right. Now, what is the range from the... this is just for... strike that. What is the range from the...
what you called your higher end to your lower end?
A. Well, the high end, if we were to use $200 per ticket, the total... with or without consumption?
Q. Net after consumption.
A. Net? OK. Net after consumption would have been a little over $1.5 billion; and at the lower end of the
range, which is the numbers we went with, at the $108 ticket price, it's a little over $1.1 billion.
Q. All right. And then that's the loss of the future earning for Michael Jackson?
A. That's correct.
Q. Only for 15 years?
A. Only for 15... well, it's really the 3-year period. It's a 37-month tour, and these numbers are calculated
based on 37 months. We did take out 15 years' worth of expenses.
Q. For three years of earnings?
A. For three years of earnings.
Q. OK. So let's look at exhibit no. 771-1.
Mr. Panish. Don't put it up. Wait for Ms. Strong.
Ms. Strong. You can put that up.
Mr. Panish. Pardon me?
Ms. Strong. You can put it up.
Mr. Panish. Thank you. OK. I mean, this is a little harder to read. It's OK to put it up. We got to get these
bigger. I can't even see that.
Judge. Well, what we could do is go to lunch 5 minutes earlier. You could make copies to hand to the jury if
you have enough copies.
Mr. Panish. All right. That's a great idea.
Judge. OK. So come back at 1:30.
Mr. Panish. Thank you, your honor.
Judge. Thank you.
Jury left the courtroom
Judge. It's probably a good idea, if either of you anticipate using charts that are kind of small to read, when
they're put on the screen, is to make copies so you can hand them out to the jury. So if you anticipate doing
that, make copies.
Mr. Panish. OK. I didn't know how small it was going to be.
Judge. OK. Thank you.
Mr. Panish. All right. Thank you.
(The following proceedings were held in open court, outside the presence of the jurors):
Judge: Katherine Jackson versus AEG Live. Good afternoon. Just a little update. Apparently there was
somebody outside who took a photograph of something that was going on inside the courtroom. I don't know if
it was the jurors or some -- someplace else, but the jurors notified my court assistant that someone was outside
the door, had a camera up and took a picture. And it was more than one juror that said it. So what I'm going to
do is we have some -- I don't know what you'd call it -- cards that sort of block the windows on the doors. The
courtroom is still open, it's just the windows on the doors are now blocked. Because they can't be taking pictures
of jurors -- they shouldn't be taking any pictures at all in the courthouse, so --
Mr. Panish: There's a sign up there that says it.
Judge: I know. But I don't know --
Mr. Panish: Did anyone get a look at who the person was?
The bailiff: We are looking into that.
Judge: Okay. We do our best. So I wanted to let you know we're going to keep those cards over the window
there, but the courtroom is open. And the little cards say the court hours are 8:30 to 4:30, something like that.
So people can come in and out, we just have to prevent that from happening again. And I'll have a discussion
with the jurors when they come in about that.
(the following proceedings were held in open court, in the presence of the jurors)
Judge: Katherine Jackson versus AEG Live. Good afternoon, everybody. It came to my attention through my
court assistant that some of you had observed somebody standing out in the hall with a camera that was taking
pictures inside the courtroom, and just holding it up to kind of the window at the door trying to take pictures. So
what we've done is we've had them put up those two placards -- do you see that? -- blocking the -- the
courtroom is still open, people can come in and out, but now people can -- cameras are not allowed in the
courtroom, and they certainly be taking photos of you. I don't know if that's what they were doing, but that's
prohibited. And as the case goes on, we may have to institute new procedures for you. I don't want to talk about
it right now, but that may be necessary later. I'll get to it when we need to get to it. But just so you know, as we
go along, I'll try to take care of these situations; and please let me know -- when you do see things like that, let
me know so we can take care of it. Thank you. You may continue.
Mr. Panish: Thank you, your honor.
Direct examination by Brian Panish:
Q. Okay. Let's go back to exhibit 770, dash, 1. If we could blow that up, please. So there are five categories of
damages; is that right?
Q. What are the five categories?
A. Tour; merchandise; endorsements; Vegas; the shows; and Vegas royalties.
Q. Each one is separate, correct?
A. That's correct.
Q. And then if you add them all up, that gives you the projected income, depending on what the ticket price is
of the tour, correct?
A. That's correct. The ticket prices only affect in terms of the sensitivity study, the tour aspects.
Q. What's the sensitivity study?
A. We called it sensitivity study. It's just to give you the low price and -- and other price points in between, up
to the high point of $200.
Q. Okay. So if we look, for example, merchandise, endorsement, shows, royalties, the same number is used in
every column; is that correct?
A. That's correct. We wanted to isolate the tour.
Q. So the only thing that has a variance would be the tour depending on the ticket price?
A. That's correct.
Q. And then when you say "MJ Consumption," the 134 million, that number remains the same across the
Q. So the only things that change would be the ticket price, and that would be the gross amount of money?
A. That's correct.
Q. And then everything is subtracted, and the numbers on the bottom, total projected economic damages,
would be between 1.5 billion and 1.127 billion. That would vary only based on what the price of the tickets
A. That's correct.
Q. Okay. Now, the ticket price could be more than 200?
A. Of course.
Q. And if the ticket price goes up, the figures would go up?
Q. All right. So now -- so we've covered the first area pretty much. I ditched that exhibit we couldn't read. All
right. So let's talk about the second area, the merchandising. Did you rely on the trial testimony, in addition to
what you read, of Randy Phillips regarding whether or not there was a likelihood that Mr. Jackson would earn a
substantial amount of money on the This Is It tour in merchandising?
A. Well, the trial testimony of Mr. Phillips basically supported my conclusion with respect to merchandise.
Q. Okay. And if we go back to 770, dash, 1, the merchandising tier 1 is in the second column, 121 million?
A. That's correct.
Q. And if we look at -- were you asked to render an opinion in this case concerning the publishing and record
royalties Michael Jackson would have earned had he lived?
A. No, I didn't. I actually -- I put that in tier 2.
Mr. Panish: Okay. Well, let me show you exhibit number 765.
Judge: Just so I'm clear, what you just showed us was tier 1?
The witness: Yes.
Mr. Panish: Thank you, your honor.
Q. That's all tier 1, no tier 2 at all?
Q. Okay. Now -- no, that's not it. Maybe it is. Okay. Explain tier 1 versus tier 2. Before we do that, explain the
A. Okay. Tier 1 is where I felt that there was more than reasonable assurance that Michael Jackson would have
achieved those five categories that I have in tier 1. Now, we only indicated he wanted to do the This Is It tour,
so the contract ran for about three years. Our tour projections took it to 37 months. With respect to tier 2, it's my
belief -- I've been in the business for some 34 plus years -- that artists never leave what they're very good at.
They take a hiatus, they chill out a little bit, they do other things that they want to do, but they always seem to
come back to play shows again. So in tier 2, I focused on, well, what would be reasonable, in terms of my
opinion, at least, anyway, of him coming back and touring again? So in tier 2, I gave him off for about two and
a half years from tier 1, and had him go out on a much reduced tour; and then when he finished that, another
two years or so of hiatus; and go out on a -- again, a reduced tour, only talking 40, 50 shows, thereabouts, and --
and then declined from there. When he gets to -- towards age 65, I had him down, you know, doing just a few
shows a year. Maybe bigger productions, get more people in the seats, but that -- I had him trailing down.
Q. So let's look at 770, dash, 1. All right. Now, this is what we were looking -- okay. This is what we would
call tier 1, right?
A. That's tier 1.
Q. Has nothing in it for additional touring, anything like that, right?
A. Nothing whatsoever.
Q. Okay. So let's look at the 765. Put that up. All right. So if we look at this, it says tier 2 -- tier 1 and tier 2.
Tier 1, which was just exhibit 770, dash, 1, those are the ranges, right?
A. That's correct.
Q. Tier 2, .376, does that mean 376 million?
Q. And what is included in that?
A. It's a comstebbinstion of touring and merchandise only.
Q. Okay. So the tier 1 doesn't take that into account at all?
Q. And then it says "royalty bump." what is that?
A. That is an occurrence that happens when an artist goes out on tour, especially a well-received artist, his
catalog tends to -- catalog sales tend to increase as he gets more fans to come to shows, or whatever. So I had
spent a little time with Michael kane, the estate's business manager, before my first deposition, and looked at the
tax returns, the personal tax returns of Michael Jackson for about a four-year period preceding his death. And I
came up with an average earnings in his royalties for that period of time. And I had calculated roughly 2.7
million a year would be -- what I did was the royalties bump or the increase in sales can range from the low side
to -- to the extreme side. I didn't -- I didn't have access to his prior tour information versus his royalty statement
information, so I couldn't establish a pure relationship that I could have shown you historical on his basis, only
with what I thought would happen here. So I did it based on my experience. So on my experience, royalty
bumps can go on the low side from, let's say, 25 percent, into the hundreds of percent. I decided to take it
conservatively, because those were my instructions, and I set a 50 percent bump. So basically the 50 percent
bump each year he's out on tour equates to $2.7 million.
Q. Okay. And that's only in tier 2?
A. That's only in tier 2.
Q. Okay. And then it says "reductions." what does .022 mean? 2.2 million?
A. It's 22 million. So it's 2.7 million times eight years of touring.
Q. Okay. And so what is the reduction, 10 percent, 20 percent?
A. That was to allow for professional fees that weren't deducted previously that are for the people that are
associated with Michael Jackson; personal manager, his attorney and the business manager.
Q. I want to show you -- let's go back to touring. 7741 and 7742, show it to counsel, please. 7741, 7742. Okay.
Now, we can put that up. Did you try to look at historical grossing tours of all time as part of what -- the work
you did in this case?
A. Yes, I did.
Q. Do you think it applies to Michael Jackson?
A. You know, we only established the relationship with respect to ticket prices. Quite frankly, it is my belief
and the perception, and I think of the AEG executives, as well, there was no other artist like Michael Jackson.
But these go from 1 to 25; and this has, you know, u2, the rolling stones, all the way down to bruce springsteen.
Actually bruce springsteen is multiple times in there. And why -- did you use this just for ticket prices?
A. Used it just for ticket prices, yes.
Q. Why couldn't you use this to assist you in determining what Michael Jackson would have done?
A. Because I -- you know, this particular tour was what he called the This Is It tour, and I approached it where
this would be the blowout tour. And there's only one other artist on the schedule that would have done more
shows than Michael Jackson, and that was cher.
Q. Do you know how old cher is?
A. She, I believe, is 67 years old.
Q. 326 shows on one tour, right?
Q. How many shows were you going to have Michael Jackson do?
Q. So that's more than anyone but cher. How do you know that -- how do you believe -- do you believe he
could do that?
A. Well, on an average of under two per week, I didn't see why not.
Q. Okay. Now, as far as the testimony of Mr. Gongaware and Mr. Phillips, did you review their trial testimony
as to how they considered Mr. Jackson amongst other top-flight performers like Led Zeppelin, Elvis Presley,
and people like that? How did they consider Mr. Jackson?
A. In a class all his own, which means above them.
Q. And is that what they testified and you read?
A. Yes. And I believe they also testified to the fact when they brought up Celine Dion that reluctantly, they
admit that Michael Jackson was bigger than celine dion, who had a 300 some odd million dollar deal for a
residency show with them.
Mr. Panish: Okay. Let's look at 775, dash, 1, on the issue endorsements.
Ms. Strong: Your honor, I just would move to strike to the extent he's mischaracterizing testimony.
Mr. Panish: All right. Let's look at 775, dash, 1. Is that okay, Ms. Strong, to put that up?
Ms. Strong: Uh-huh.
Mr. Panish: Okay. What are we looking at here?
The witness: We're looking at the approach I took to calculate endorsements.
Mr. Panish: Explain to us how you did it.
The witness: Well, there is not much public information out there as far as music entertainers in terms of their
endorsement deals. So we did a search, and the one that we were able to come up with was the Beyonce Pepsi
deal. And she had a $50 million deal, endorsement deal, with Pepsi.
Q. Do athletes, like, for example, Kobe Bryant --
A. Tiger Woods.
Q. -- Michael Jordan, Tiger Woods, Peyton Manning -- do they also get endorsement deals?
A. Yes, they do.
Q. All right. Go ahead.
Ms. Strong: I'd just object to the extent it lacks foundation, your honor, as to Beyonce.
Judge: On Beyonce, no. Overruled.
Mr. Panish: Go ahead.
The witness: Okay. So what we tried to do, considering the day and age in 2009, as compared to what took
place back in the '80's when he had other endorsement deals -- because the times have changed considerably.
What we did was we established a relationship with the amount of Beyonce's endorsement deal to the amount of
her tour gross, and established the relationship that the endorsements were 41.84 percent of her tour gross. And
what we tried to do -- not what we tried to do, what we did do was that we applied this percentage to a portion
of Michael Jackson's tour. As a matter of fact, what we did was that -- if we would have applied 41.84 percent
to the entire tour gross receipts from Michael Jackson, the number would have been absolutely astronomical,
and I was uncomfortable with that sum. We wanted to take a conservative approach. Effectively through my
calculation of only using 2009 -- remember, 2009 was a short year; and 2010, we used those gross receipts with
the 41.84 percent. Effectively, it turns out to be 25 percent of the total tour receipts in calculating the $267
million that's on this schedule.
Q. Okay. Explain that to me again.
Q. I didn't get it.
A. I'm sorry.
Q. Slow it down.
Q. Okay? Because --
A. If I were to apply the full relationship of the 41.84 percent that we calculated as Beyonce's sponsorship deal
as a percentage of her --
Q. Okay. Just finish that answer.
A. -- as a percentage of her tour gross --
Q. Okay. You said the full relationship of the percentage. Explain that.
A. If I applied 41.84 percent --
Q. Okay. Where do you get that from?
A. That is the $50 million endorsement deal from Pepsi, divided by -- or as a percentage of Beyonce's tour
Q. So you take like .42, let's say, times 119,500,000, and that gives you how much?
A. Roughly $50 million, allowing for rounding.
Q. Okay. So then, if you take 638,976,138, and if you were to multiply 42 percent times that, what would it
A. $267 million.
Q. Okay. And then you put "clothing." what are you referring to there?
A. Back in the mid '80's, there was a clothing deal with a gentleman by the name of Chuck Sullivan, that was a
$28 million clothing deal. It was endorsements, whatever.
Q. Who is Chuck Sullivan?
A. He was just a guy that distributed merchandise back then, clothing merchandise. And what we did was we
took that 28 million and put it in 2009 numbers with the inflation rates that were in effect. And today, or in
2009, it would have amounted to $50 million.
Q. Now, I know that Beyonce, obviously, is a pretty well-known, famous performer. Is that a fair statement?
Q. And as far as Beyonce compared to Michael Jackson, how would you compare that?
A. I couldn't compare them.
A. It's Michael Jackson. His -- he's the king of pop. He's an icon.
Q. Well, Beyonce does pretty good, too, doesn't she?
A. Yes, she's very popular; but not like Michael Jackson.
Q. All right. Now, let's talk about -- we can take that down. Let's talk about -- strike that. Did you review
materials, specifically emails, from Randy Phillips where Randy Phillips actually planned tours, movies and
merchandise with Michael Jackson?
Q. Did you review emails between Randy Phillips and Richard Nanula of Colony Capital?
Mr. Panish: I want to show you -- I hope this is in evidence. 12968. Can we check that, counsel? I think it is.
Ms. Strong: I believe it's in evidence.
Mr. Panish: Okay. Great. Thank you.
Q. So this is, what I'm going to show you, sir -- this is an email, and -- can we make it so it's somewhat
readable. Randy Phillips, to Richard Nanula, Colony Capital, inc. And this is regarding a Michael Jackson
proposal. And this is Randy Phillips writing to Mr. Nanula, and he's writing about a movie version of Thriller,
and he's also talking about -- well, what is he talking about 2009, July, to December 2010?
A. "A well-rounded, spread-out, worldwide tour taking advantage of the gigantic secondary ticket market,
v.I.P. Packages, et cetera, massive sponsorship opportunities subject to how well we have rehabilitated him, and
very lucrative exotics.
Example, dubai, abu dhabi, china, et cetera, and privates starting at 3 million to 10 million, plus costs, per show.
We would produce another prime time television special and continue to release new singles during this period.
We would also start the development process of an only-in-Vegas style spectacular at one of colony's
Q. And then they list that they own -- "or another suitable location," and they list that?
Q. And, now, is it your understanding that Mr. Phillips was involved in this whole process, based on this
A. Certainly appears that way.
Q. And then he talks about if this moves further -- this was before the contracts were even signed with AEG?
A. Long before.
Q. He's anticipating "if we take a surgical approach to the run of the 02 to maximize his earnings and ours, I
believe we can net at least 1 million per show -- per night after all costs, fees, and possibly more." was that
consistent with the analysis that you did?
A. Yes. As a matter of fact, I think that we were lower on the per-show profit.
Mr. Panish: Let's look at 776, dash, 1.
Mr. Boyle: Take it down for a second, Josh.
Mr. Panish: It's okay?
Ms. Strong: Yes.
Mr. Panish: It's okay, but we can't see it.
Mr. Boyle: Okay, Josh.
Mr. Panish: All right. So we're talking about this Las Vegas.
Q. Fill us in. What are we talking about now in Las Vegas?
A. We're looking at a ten-year run of this Las Vegas theme show.
Q. And is this something that had been discussed in the emails and Mr. Jackson's notes?
Ms. Strong: Objection; lacks foundation.
The witness: Yes.
Q. Is this part of tier 1?
A. Yes, it is.
Q. And just tell us how you made these calculations.
A. Well, we actually took a budget from AEG it was post death, about a month or two after Michael Jackson's
passing. And they had presented to the estate to put together this Vegas theme show. So we used their numbers
regardless of the fact that it was post death. Wouldn't have made any difference to me. The prices and the
attendance would have all been the same, and the costs would have been the same.
Q. And what was the amount of money that you got after taking out everything?
A. Well, it's $209 million, plus there was a $60 million guarantee that would have been earned out on top of it.
Mr. Panish: Okay. And let's look at exhibit 827, dash, 1.
Judge: I'm sorry. How much is Michael Jackson's?
The witness: 269 million.
Mr. Panish: You can put that back up so we can see it.
Mr. Boyle: Put the last one back up.
Mr. Panish: Yes. We couldn't see that. That was 776-1.
Judge: So the guarantee
The witness: It was -- it was on top of the net profits. So the guarantee was paid over a period of time, and then
plus the profits of the show.
Q. So 209, plus 60, so 269?
A. That's correct.
Q. Now, did Michael Jackson have to perform in this show?
Mr. Panish: I want to show 827, dash, 1. Ms. Strong. Is that okay?
Ms. Strong: Yes.
Mr. Panish: All right. This is what we're calling royalties. Tell us what you did here.
A. This is what I spoke to earlier where we call this grand rights for the use of the music and the actual
recordings of Michael Jackson. The show would have paid 5 percent of adjusted box office for both individual
-- each publishing for the use of the compositions and recorded music.
Q. Okay. And if we go -- that's $102,192,116. And if we go back to 770, dash, 1, we will see that these are the
-- that's the last item, and the one before that is what we just looked at, right?
A. That's correct.
Q. And then the range that we have there -- now, in this tier 1 damages, did you put a single penny in there for
Q. Did you put anything in there for clothing?
Q. Did you put anything in there for new record sales?
Q. Why not?
A. Because these are the items that I was -- it was more than likely than not, and I was reasonably assured he
would have done these things had he been alive.
Q. Can you say this is the exact figure to the penny?
A. Of course not.
Q. Okay. What is this?
A. I'm trying to err on the low side. It could vary either way. It could go much further up. I don't think it could
go much further down. I consider these conservative numbers. Q. Did you see evidence and testimony where
Mr. Gongaware and Mr. Phillips discussed instead of 37 months, touring 48 months? A. Yes.
Q. And did you do some calculations assuming that that were the case, instead of 37 months, it was 48 months?
Mr. Panish: Okay. Let's show counsel exhibit 828, dash, 1.
Q. Okay. This is tier 2?
A. No. This is tier 1.
A. I think you would consider the 48 months -- if it went the four years, the 48 months would be --
Q. On the left, 37 months, 1.127 billion to 1.511 billion, that would be everything added up in exhibit 770,
A. That's correct.
Q. That's assuming 37 months of touring, about three years?
A. Pure tier 1.
Q. Okay. 48 months would mean the tour would then be extended 11 months, and that would range from 1.462
to 1.96 billion.
A. Yes, approximately 30 percent more.
Q. Now, if you do that, does that increase anything else?
A. Well, just the first three. I mean --
Q. Well, first, does it increase merchandise, does it increase royalties, things like that?
A. No, it doesn't increase anything to do with the -- with the Vegas or Vegas shows.
Q. Okay. All right. So let's look -- okay. I already showed you that one email where we talked about the four-
year plan including australia. Do you remember that?
Q. Okay. Now, did I show 828, dash, 1? I just showed that. Okay. Let's look at -- you mentioned professional
Q. What are professional fees?
A. Those are the fees Michael Jackson would have paid to his team, which would be his entertainment attorney,
his business manager and his personal manager.
Q. And what range of -- did you use?
A. 10 to 20 percent encompass all three.
Q. Do some go for less?
Q. Why is yours so high?
A. Well, I figure in this particular case, a person of john branca's caliber would probably go for at least 5
percent. Personal manager, at the low end, usually goes for 10 percent. Business manager for an artist of
Michael Jackson's stature would probably be hourly, but there would be a lot of time that would go into this, so
I don't know if it would approximate 5 percent or not.
Mr. Panish: Okay. Well, let's see what you did here. 826, dash, 1. Is that okay?
Ms. Strong: Yes.
Mr. Panish: All right. So what you did was you took future loss, and then you -- which we've already seen,
and you took out either 10 percent or 20 percent.
Q. Those are the fees?
A. Yes, we took the fees out, yes.
Q. So that's in -- is that in addition to consumption?
A. That's correct.
Q. So if you take out 10 percent, what's the range?
A. 1. -- literally a little over 1 billion to 901 million.
Q. No, no.
A. I'm sorry. To 1.76 billion. I'm sorry.
Q. What if you take out 20 percent?
A. Then it would be 901 million to 1.56 billion.
Q. And the lower number of the 1.014 and 901,600,000, that's assuming a 37-month tour?
A. That's correct.
Q. The higher number, 1.764 to 1.568 billion, that's referring to a four-year tour?
A. That's correct.
Q. Now, I asked you this earlier, but did you review Mr. Tom Barrack's deposition?
A. Yes, I did.
Q. Who is Mr. Barrack?
A. Mr. Barrack is a principal in a company called Colony Capital.
Q. And did he work with Mr. Jackson?
Q. What did he do?
A. He refinanced his neverland property, and he also guided him into the AEG deal.
Q. And do you know whether he actually was in contact with Philip Anschutz to work with Mr. Jackson?
A. Yes, they were friends.
Q. And Mr. Barrack, do you know now if he's heading up a record company?
Ms. Strong: Objection; calls for speculation.
The witness: No.
Ms. Strong: If he knows.
The witness: No. It's a movie company.
Mr. Panish: I'm sorry.
Q. What is -- where is Mr. Barrack -- among other things, what is he in charge of now?
A. He's in large of a large movie company, and the name escapes me.
A. Miramax. I was going to say it starts with an M.
Q. Before Mr. Barrack, do you know who was in charge of Miramax?
A. The Weinstein brothers.
Q. But as the CEO they own it.
A. Disney was --
Q. And do you know who Richard Nanula is?
A. Richard Nanula was Tom Barrack's partner.
Q. And he was -- you saw him on these emails?
Q. We've heard some testimony that Michael Jackson had a lot of debt. Okay?
Q. Does that have any bearing on what he could earn in the future?
A. I didn't think so. As a matter of fact, I would have thought it would be further impetus for him to go out to
Q. Did AEG not, to your knowledge -- did they -- were they concerned about Michael Jackson's debt when
they entered into the contract with him?
A. I don't know, but they spent $34 million preparing for him to go out.
Q. All right. Did you -- are you aware of whether or not AEG hired an economist and experts to assess the
future loss of income of Michael Jackson in this case?
Q. And do you know who they are, their names?
A. Just the last names, Briggs and Ackerman.
Q. And did they give depositions like you?
Q. And did they have opinions like you on the potential loss of income?
A. I think their opinion was that there wouldn't be a future loss of income.
Q. And did you agree with that?
Q. Did AEG's own internal documents agree with that?
A. I don't think so.
Q. Were there factors that Mr. Briggs felt were important to determine whether a show like the 02 show was
going to be successful?
A. No, not at all.
Q. All right. Now, what about the fact that no one in the history of the world has ever made as much money on
a world tour as you project Mr. Jackson would have earned? Does that worry you?
A. Not in this day and age. I'm amazed by the amounts of money that fly around.
Q. What -- why do you think -- strike that. Why do you -- are you worried, concerned, that you put this amount
of money that he could make for touring when no artist has earned that?
A. No. I didn't even think about the amount of money while I was doing the calculations. The numbers worked
out to be what they worked out to be. I didn't have any goal or objective to reach.
Q. Do you think Michael Jackson had assembled a group of people that could help him in this comeback tour
and work that he was doing?
A. Yes, I truly believe that.
Q. Okay. You talked earlier about it; that, you know, Michael had said, This Is It and I think we've heard a lot
of people say, as far as the concert, This Is It and that's -- Mr. Ortega and others told us about that. In your
experience, have you heard artists say that, that still go back to tour?
A. Well, not to me personally; but I have seen it in the public eye for sure.
Q. Now, did you count in, in tier 1, money for additional tours downstream?
Q. But if you did do it, they would be in tier 2?
A. That's correct.
Q. Did you calculate how much he could have made making movies?
A. No, I didn't.
Q. Is there any question in your that he could go out and make movies if he wanted to do that?
A. No. I think all the testimony and the documents reflect that he would do movies.
Q. But you didn't put a figure on it?
A. No. I thought that was best for the jury to decide.
Q. Did you put any -- let me show you 831, dash, 1, just so we understand. Okay. And is this what we're
considering tier 2?
A. Plus the royalty bump. The royalty bump is a separate schedule.
Q. So this would be the tour, this is the additional touring, 296 million, merchandise from the touring, 79
million, for a total of 375 -- or 376 million, right?
Q. This is all tier 2?
A. That's correct.
Q. And this is not part of tier 1 damages that we already talked about?
A. Not at all.
Q. And there's no consumption. Why is that?
A. Because we took off all 15 years of consumption in tier 1.
Q. Okay. I want to show 833, dash, 1. What is this? When you say "tour assumptions," is this tier --
A. These are the tier 2 tour legs that I
believe that he would have done had he been alive.
Q. All right. Tell us about it.
A. Well, after taking -- after we wrapped up in, I think, august of 2012, gave him a break for approximately
two and a half years; and I felt that he would probably go back to the touring again. And actually would have
been well into
2015, so it's approximately three years off to give him a real rest to do the things that he indicated he wanted to
Q. These would be the assumptions if we go to the tier 2 damages?
A. That's correct.
Q. And you have the number of tours, which are four, right?
Q. And you have the number of shows, 12, 48, 40, 50, 45?
Q. And then you have where the shows would be?
Q. Okay. Let's look at 834, dash, 1. This is now tour 2 assumptions. I'm sorry. This is in tier 2, right?
Q. And this would be the second tour?
A. That's correct.
Q. And this lists out the stadiums and how often he would play at them?
Q. Most of those seem to be -- wembley is in London; Japan, Europe, Australia, New Zealand, and then back to
Q. And various size of arenas -- stadiums, actually?
A. That's correct. Well, there are plenty of arenas.
Q. Like the US ones are mostly arenas?
A. And Europe, we have 20 arenas in Europe.
Q. Let's go to exhibit 835, dash, 1. Tour number 1 is This Is It right? We've already -- we're past that?
A. Yes. That was tour number 2, meaning tour number 1 for the tier 2
Q. Tier 3 -- tour 3 is India and Japan?
Q. The stadiums, the number of shows. Seems like a lot less shows.
Q. Okay. Let's go to 835 -- 836-1. And we're still on the fourth tour, and these are the various venues, and these
are tour 4 and tour 5 as part of tier 2 damages only?
A. That's correct.
Q. All right. And these are assumptions, you relied on those, also?
Q. Let's look at 836-1. I'm sorry. 837-1. Did you make an assumption if he did these additional tours in tier 2
that there would be some type of merchandising -- merchandising income?
A. We -- we did in terms of merchandise only. We didn't project out any of the other categories.
Q. Okay. Is there a figure that you put down for that?
A. Yes. $79 million.
Q. Now, you have told us what you did. You didn't do -- did you do any theme park income?
A. No, other than the endorsement.
Q. Movies, you didn't do, right?
Q. Did you reduce any of these figures to present value?
A. No. That's the economist's job.
Q. Dr. Formuzis?
Q. And do you understand that is part of the way that damages are calculated, that there's a reduction to present
Q. Now let me ask you some questions. Number 1, are you a tour promoter?
Q. Are you a tour producer?
Q. Are you a musician?
A. I was way, way back when.
Q. How is it that you can make such -- give such opinions in a case like this?
A. Because I've been a business manager for a long time, and I've seen plenty of them.
Q. Well, have you ever handled somebody like Michael Jackson?
Q. Well, how do you know that the projections and the budgets have a sense of being accurate?
A. Well, I consulted with my management partner, Joel Cooperman; and he thought my numbers were
reasonable and conservative.
Ms. Strong: Objection; move to strike, your honor, not --
Judge: All right. Motion granted, the answer is stricken.
Judge: What's the objection?
Ms. Strong: Cannot introduce the content of, allegedly, another expert opinion.
Judge: It's like vouching, having one person vouch for another.
Mr. Panish: Okay. No problem.
Q. Did you use the numbers, the projection budgets, that somebody had already prepared?
A. Yes, AEG's.
Q. Would you assume that AEG was being forthright and honest in their projections and assessment to see
what they could make if they did this?
A. I would hope so. It was their dime.
Q. Now, have you calculated for us any money for Mrs. Jackson or the children for loss of love, care, comfort,
society, affection, anything like that?
Mr. Panish: I think that's all I have. Thank you.
Judge: Okay. Thank you. Cross-examination?
Cross-examination by Ms. Strong:
Q. Good afternoon, Mr. Erk.
A. Good afternoon.
Q. Your primary area of expertise is royalty compliance, correct?
A. No; it's 50/50 business management, royalty compliance.
Q. But you spent most of your time -- you are an expert in royalty compliance?
Q. And that relates to what you described at the outset of your testimony this morning, auditing royalty
A. The early part of my career was all royalty audits, yes.
Q. And that you're examining something that has already happened in a contract, correct?
A. That's correct.
Q. And whether, in fact, monies were paid pursuant to that contract accurately, correct?
Q. So you're looking backwards with respect to that work, backwards in time?
A. Oh, yes.
Q. In this case -- this case, there's no issue with respect to royalty compliance, there's no dispute about any
compliance with royalties in this case, is there?
Q. And your opinions in this case mainly relate to touring, correct?
A. Largely, yes.
Q. And as you just said, you've never produced a tour, correct?
A. That's correct.
Q. And you've never promoted a tour, right?
Q. In fact, you've never been involved with setting up a schedule for any tour, correct?
A. That's not entirely true.
Q. You've never been involved with setting up a schedule for a worldwide tour, have you, Mr. Erk?
A. We've had to prepare budgets for artists to go out on tour, so that's incorrect.
Q. I'd like to -- you were deposed in this case, correct?
Q. I deposed you. You swore to tell the truth at your deposition?
A. Yes, uh-huh.
Q. And were, in fact, you telling the truth that day?
A. Yes; but what I said that particular day --
Ms. Strong: That's my question, just if you were telling the truth that day. I'd like to look at page 290 to 291 of
Mr. Panish: Which day?
Ms. Strong: That would be volume 2. It runs consecutively. It's line 22, 290-22.
Mr. Panish: Go ahead.
Ms. Strong: Mr. Panish, is that okay?
Mr. Boyle: Yes.
Ms. Strong: You may play it.
(the following videotaped deposition testimony is played):
Q. Have you ever been involved in setting up a schedule for a world tour for any artist?
A. That's not part of my responsibilities.
Q. So have you done that before?
A. It's not part of my responsibilities, so the answer is no.
Q. And even though the This Is It tour for 50 shows was scheduled for an arena in London -- the 02 is an arena,
Q. You went ahead and predicted a schedule that would have had Michael Jackson performing in huge
A. That's correct; but I used AEG's numbers.
Q. And the schedule you predicted was for -- that Michael Jackson was not only going to perform 50 -- 50
shows at the 02, but he was going to then go on and do a number of other shows, getting up to 260 shows for
This Is It just the This Is It tour alone, correct? That's your opinion?
A. Based on the wild demand, yes.
Q. And included in the 260 shows that you created -- a lot of those include huge stadiums, correct?
Q. And then part of your opinion is that Michael Jackson would have gone on and done four more tours after
that 260-show This Is It tour that you created, right?
A. Correct, tier 2.
Q. And in that, you also included a number of huge stadiums in your numbers, correct?
Q. But you've never personally worked on any stadium tours, have you, Mr. Erk?
A. No, I haven't.
Q. And you talked about merchandising, what Michael could earn in connection with merchandising in
connection with the tour, correct?
Q. But you're not an expert in merchandising, are you, Mr. Erk?
A. Well, experts are -- it's a relative term. Do I understand was merchandise deals are? Do I know what
merchandise costs? Do I know what it sells for? Yes, I do.
Q. But you're not an expert in merchandising, correct?
A. As I said, "expert" is a relative term. If I understand it, I can deal with the numbers.
Ms. Strong: Okay. Well, why don't we look at your deposition. Mr. Panish, page 97, line 7 through 21.
Mr. Panish: Well, I think it's taken out of context. Why don't you read the part before? I would object, your
honor. It's taken out of context, it's not impeaching this witness. He said before exactly what he was just saying.
Judge: I'll have a copy up here.
Mr. Panish: If we start at page 96, line 24, it explains it all.
Judge: 96, line 4?
Mr. Panish: She wants to read 17 to 19 --
Ms. Strong: 17 to 21.
Mr. Panish: -- on page 97, after he testified about it from 96-24 up to 17.
Judge: Okay. You may read what you want to read, and then you can comeback and do what you need to.
Ms. Strong: Go ahead, Pam.
(videotaped deposition testimony was played):
Q. And you're not an expert in merchandising, correct?
Q. Is that correct?
A. Sorry. Yes.
Q. And you also testified about a hypothetical endorsement deal or deals that Michael Jackson, you believe,
maybe could have earned, correct?
Q. Sometime in the future? But you're not an expert in endorsements, either, are you, Mr. Erk?
Mr. Panish: I'll just object; vague and ambiguous as to the term "expert."
The witness: I'm not an expert in endorsement deals.
Q. In fact, you've
never set up an endorsement deal for any one of your artists, have you, Mr. Erk?
A. It's not part of my responsibilities. The personal manager and the entertainment attorney do that. They have
agents that do that. I understand endorsement deals.
Q. And you've never been involved with any negotiations for endorsement deals, either, correct?
A. I haven't been called upon to do it.
Q. And you've never before predicted a potential value of an endorsement deal, have you, Mr. Erk?
A. That's correct.
Q. And when we're talking about endorsements, what we're talking about is companies aligning their brands
with the artist to have the artist help them market their products, correct?
Q. And you're not an expert in marketing, either, Mr. Erk; is that correct?
A. I'm an accountant.
Q. So the answer to my question?
A. I'm not an expert in marketing.
Q. And you also testified on direct examination about projected profits associated with a ten-year show in Las
Q. And that was a show where Michael Jackson wasn't going to participate in the show, correct?
A. It was a thematic show, yes.
Q. And you had it starting the beginning of 2010, correct?
A. Well, the starting date was irrelevant. I had it going for a ten-year run. I used 2010.
Q. You used a date that was six months after Michael Jackson passed?
A. Again, it was a ten-year run, we put 2010 down for it.
Q. So your projections would have it that that show -- had Michael Jackson not passed in June of 2009, he
would have started a ten-year show in Las Vegas, a theme show, six months later; is that right?
A. But I also believe I testified you could slide it down to 2011, 2012, depending on the people composing the
show and putting the elements together, and creating the staging for it. So either way, I still had it for a ten-year
show. The time period, I think, is irrelevant on the start date.
Q. And my question, Mr. Erk, was, you had it starting in 2010, correct?
Q. And that would have been while Michael Jackson would have been on this 260-show tour of This Is It had
he lived; is that right?
A. Had he lived, yeah.
Q. So both would have been going on simultaneously?
A. Again, as I say, the start date was irrelevant. It could have slid down further.
Q. And with respect to these -- the Las Vegas show, you're not an expert with respect to that, either, are you?
A. Las Vegas? No.
Q. In fact, you've never had any experience planning or projecting the success of a Las Vegas show like the one
in your analysis, right?
A. Yeah; but I relied on who should have been an expert, AEG I used their numbers.
Q. And my question is focused on your experience. You've never had any experience planning or projecting the
success of a Las Vegas show like the one in your analysis; isn't that right, Mr. Erk?
A. That's correct.
Q. And all of your opinions relate to what you think Michael Jackson would have done had he lived and not
passed in June 2009, correct?
Q. You didn't know Michael Jackson personally, did you, Mr. Erk?
A. I only met him once.
Q. You didn't know him personally, correct?
A. No, I did not.
Q. So you never had an opportunity to talk with Michael Jackson about his future plans, correct?
Q. And you testified earlier about a couple experiences testifying in court before, correct?
Q. But you've never been qualified in a court to testify as an expert on the economic damages, correct?
A. Not in court, no.
Q. You testified that you are being paid for your time, of course, Mr. Erk, correct?
Q. And you mentioned 475 an hour?
Q. You said you spent about 200 hours working on the case so far; is that right?
A. That's correct.
Q. And you said that there were others in your office that had also spent time looking at this?
Q. But less than you?
Q. Do you have any idea how much time was spent by others in your office working on the case?
A. Approximately 650, 700 hours.
Q. For the total of their hours?
A. For the total effort, including me.
Q. Including your 200?
Q. And just to be clear, you were first hired in January of 2013, correct?
Q. Do you know when this case was filed?
A. I don't know the exact date, no.
Q. Do you know the year it was filed?
A. Sometime in 2012.
Q. Would it surprise you to learn that the case was filed in september of 2010?
A. Surprise? No. But that wasn't a focus of mine.
Q. So let me get this clear. You've told the jury that had Michael Jackson not passed in June 2009, he would
have gone on tour for three more years, and then he would have gone out and done four more tours after that
until the age of 66, correct?
Mr. Panish: Misstates the testimony.
A. Four more -- the four more tours to age 66 were in my professional opinion.
Q. And -- and that's what you told the jury, your professional opinion?
A. Yes, uh-huh.
Q. And you're telling the jury this even though Michael Jackson hadn't toured for the last 12 years of his life;
isn't that right?
A. Approximately, yeah.
Q. And you're telling the jury this even though he had never done a 260-show tour ever before in his life, right,
A. The show was called, This Is It. he was going to blow it out. He didn't want to tour again; even though, in
my professional opinion, I thought he was going to tour again. He was going to pack in as much as he could,
earn enough money to straighten himself out, take care of his family. So that's my opinion. And I think it was a
lot of others' opinions in all the email correspondence that we've seen, and his contract.
Q. And I want to focus on the question that I've asked, Mr. Erk. It will help move things along if we can do
that. You're telling the jury that he would have gone on and done a 260-show tour, something that he had never,
ever done before; is that correct?
Q. And before he passed away, Mr. Erk, he never actually had agreed to do anything more than 50 shows for
This Is It correct?
A. He signed a three-year deal.
Q. But at the time that he passed away in June 2009, it was expected that he would do 50 shows, correct?
A. They sold out 50 shows, and they sold it out in record time, five hours.
Q. So I'd like you to focus on my question, if you can, Mr. Erk. At the time he passed away, it was expected
that he would perform 50 shows on the This Is It tour, correct?
A. First leg, yes.
Q. No -- at that point, it was just expected to be 50, correct?
Mr. Panish: At which point? Vague and ambiguous as to time.
Judge: At the time he died?
Q. At the time that he passed away, it was expected that it would be 50 shows, This Is It would have 50 shows,
A. First leg, yes.
Q. You say "first leg," which is -- you're modifying the question. I'd like to know, just so there's no confusion
about this, at the time that he passed away in June of 2009, it was expected that This Is It was going to be 50
shows at that point in time, correct?
A. That's all they sold tickets for; so at that point in time, 50 shows was what they sold.
Ms. Strong: I'm just -- this calls for a yes or no, your honor. Can you please instruct the witness to answer the
Mr. Panish: He's answered the question.
Judge: Okay. Repeat the question. (the question was read)
Judge: Yes or no?
The witness: 50 shows, This Is It 02 arena.
Ms. Strong: So is the answer yes?
A. Well, it's yes to that -- what I just said, yes.
Q. So yes to my question?
Mr. Panish: Objection; the question is vague and ambiguous, overbroad.
Judge: No, it's not. Overruled. If it's something else, then the answer is no, so --
The witness: Can I explain myself, your honor?
Judge: Answer the question. If the strict answer to the question is no, then say no. If it's yes, then it's yes.
The witness: The term "expected" is the word that troubles me. She said "expected." expected was more in
Judge: Okay. So he's having difficulty understanding the question.
Ms. Strong: Okay. So why don't we look at his deposition, then, page 104, lines 25, to page 105, line 3.
Judge: Okay. What do you want to do with it?
Ms. Strong: Play it if there's confusion.
Judge: Refresh him first, then you can play it.
Ms. Strong: I can ask him the question.
Judge: No. Show him his deposition first.
Mr. Panish: Here. You can use mine.
Ms. Strong: May I approach, your honor?
Judge: Yes, you may. And just read this to yourself.
The witness: Okay.
Q. Does that refresh your recollection as to what you testified at your deposition?
Q. And at the time Michael Jackson died, the This Is It tour was expected to have 50 shows, correct?
A. But you also have to realize that at that time, when I came out for the deposition, I wasn't at my best because
I had triple disk fusion, so I didn't take issue with the word "expected." I did answer that question yes, though,
at my deposition.
Q. And Mr. Paul Gongaware, have you read his trial testimony in this case?
A. Yes, I did.
Q. And so you know that he testified that Michael hadn't agreed to do anything beyond the 50 shows at the time
of his death, correct?
A. I believe I saw that, yes.
Q. And there's literally no evidence in this case that Michael Jackson ever even contemplated doing anything
like the four additional tours after the This Is It that you predict, correct?
A. I said that was my professional opinion, correct.
Q. Correct that there was no evidence at all supporting that?
A. Yes, "correct" means correct to your question.
We've established that he never agreed to do more than 50 shows at the time he passed away. You agree that
the first 50 shows would have to be successful before any extended tour could happen, correct?
A. I don't know what was in the mind of AEG in terms of extending the tour based on the results of 02. But I
will tell you 02 sold out 750,000 tickets with more than 500,000 waiting in the queue in five hours. It's never
been done before, it's never been done again.
Q. So, again, my question is, in order to carry the shows beyond the first 50, you would agree that you would
need to have success with respect to
The first 50 shows, correct?
A. I don't think his contract said that.
Ms. Strong: Okay. So let's look at your deposition, page 679, line 18 -- lines 18 through 25.
Judge: I'm sorry. I'm a little --
Ms. Strong: It's okay. Line 679, your honor, line 18 through 25.
Ms. Strong: You can play it.
(the following videotaped deposition testimony was played:)
Q. But you'd agree that -- everyone would agree that in order to carry the show beyond 50 shows, you would
need to have success with respect to the first 50 shows, right, Mr. Erk?
A. You wouldn't do additional shows unless the others were successful.
Q. So is the answer yes, Mr. Erk?
Q. And just for clarification, just for the jury's benefit, the second day of your deposition and the third day of
your deposition, we were conducting it via videoconference; is that correct?
A. I was feeling much better then so my back wasn't an issue except for length of time in the deposition.
Q. And I wanted to pointed the sound sounds a little different on some of these clips and it's because you were
with a camera in another place and the lawyers were in a different room doing video conferencing to
accommodate you, correct?
Q. Mr. Erk, there's always risk associated with doing any tour, isn't there?
A. Of course.
Q. And that's why it's commonplace in the touring industry to buy cancellation insurance, right?
A. Depends on the size of the tour; but yes, for the real large tours, usually they'll buy cancellation insurance.
Q. It's commonplace? That's what you testified at your deposition.
A. For the large tours, yes.
Q. And on top of the fact that there's risk associated with every tour, you understand that people who knew
Michael Jackson, who were working with Michael Jackson at the time -- that people who were involved with
his life, they thought it was speculative whether Michael Jackson would have even successfully completed the
50 shows? You're aware of that, aren't you?
Mr. Panish: I object as vague and ambiguous as to the people who knew Michael Jackson, the people who
were working with Michael Jackson at the time, the people that were involved in his life. That's speculative,
Judge: Maybe you can identify who they might be.
Ms. Strong: People like karen faye, for example, Mr. Kane.
Q. Those folks had concerns about whether Michael Jackson -- it was speculative, anyway, as to whether
Michael Jackson would have completed the 50 shows?
Mr. Panish: And just vague as to time, when they thought that.
Judge: Prior to the commencing, I'm assuming.
Ms. Strong: Correct, your honor.
Judge: Okay. Overruled.
The witness: I've seen those concerns, yes.
Q. And have you reviewed Ms. Karen faye's trial testimony?
Q. So you didn't hear her talk about Michael Jackson really doesn't like to do long-term engagements and
concerts? You didn't review that testimony?
Q. And you didn't review her testimony where she said it was kind of like Michael Jackson was trying to talk
himself into it, she wasn't actually sure whether he actually sincerely wanted to do the 50 shows? Do you recall
A. Is this all in the record --
Mr. Panish: Excuse me. I'm going to object. How could he recall if he didn't review it?
Judge: Let's establish that he read it.
Ms. Strong: Fair point.
Q. So you're not aware, Mr. Erk, that karen faye testified that she wasn't actually sure that he sincerely wanted
to do the shows?
A. I think I already said that I didn't read her testimony, I'm not aware of it.
Q. And you're not aware of her testifying that Michael Jackson -- she was worried he had a pattern of not
fulfilling obligations, like with his business partners in bahrain and backing out of that deal?
A. As I said, I didn't read her testimony; so, obviously, I'm not aware of it.
Q. And plaintiffs' counsel didn't tell you about those portions of Ms. Faye's testimony?
Q. You did review Mr. Kane's deposition testimony, correct?
Q. And who is Mr. Kane?
A. He became Michael Jackson's business manager just before he passed.
Q. So he was Michael Jackson's business manager before Michael Jackson passed in June 2009, correct?
A. Just before he passed, I think he got hired.
Q. And do you know when he got hired?
A. No, not exactly; but shortly before.
Q. And do you know what Mr. Kane has done after Michael Jackson's death in connection with Michael
A. I believe he's the business manager for the estate.
Q. And you felt that Mr. Kane's deposition testimony was particularly important, correct?
Q. Well, you believe that the business manager's testimony was important testimony, right?
A. No. I already told you no. I told you his testimony wasn't important to how I constructed my numbers.
Ms. Strong: Okay. Well, I don't believe we have this teed up for video, but I'd like to put up so counsel and the
court can look at page 367 of Mr. Erk's deposition, lines 4 through 13.
Mr. Panish: 4 through 14? 13?
Ms. Strong: 13.
Judge: Do you want to show it to Mr. Erk?
Ms. Strong: I don't need to, your honor. Can we put it on the screen?
Mr. Panish: 4 through 13. Go ahead.
Ms. Strong: Is that okay, your honor?
Judge: 4 through 13?
Ms. Strong: Correct, your honor.
Mr. Panish: Go ahead.
Judge: Okay. Go ahead.
Ms. Strong: This is from your deposition, we don't have it teed up for video. But you can see this is a
transcript from your deposition. You were asked, "Did you read Mr. Kane's testimony in this case?" You gave
the answer yes.
Q. Do you see that?
Q. And it goes on, "Just those points that were pointed out to you by your partner?" And your answer was,
"No. The business manager is important testimony." Do you see that there?
Mr. Panish: Keep reading.
The witness: Yes.
Ms. Strong: "His and Branca's, I generally read a good chunk of it. His testimony was rather long. So yes, I
read his testimony, or I reviewed it."
Q. Do you see that?
Q. So you'd agree it's important testimony?
A. Yeah; but you didn't read the rest of it. You and I had a debate with him saying that all of this -- you know,
the show may or may not be successful. And you asked me if I thought his opinion was important; I said we're
accountants, that's his opinion, my opinion might be different. You were asking about him doing the shows. I
think you need to put it all in context.
Ms. Strong: Your honor, I'd move to strike as nonresponsive.
Judge: Motion granted. The answer is stricken.
Mr. Panish: Your honor, she asked him.
Judge: You can rehabilitate when you redirect.
Q. So, again, I just -- just to keep it clean and simple, you testified at your deposition that it's important
A. Literally reading just that passage, yes.
Q. And you've actually met Mr. Kane, haven't you, Mr. Erk?
A. Yes, I did.
Q. You believe he's very knowledgeable and impressive?
A. I like Mr. Kane, yes.
Q. And, in fact, you testified at your deposition that he was a knowledgeable man, and you were impressed
A. He came out of the firm -- same firm that I was groomed in, gelfand. So yes.
Q. Thank you, Mr. Erk. And he's a capable business manager?
A. I believe so.
Q. And did plaintiffs' lawyers tell you to ignore the part of Mr. Kane's testimony where he said it was entirely
speculative whether Michael Jackson would have been successful with the 50 shows?
A. I think I just said that, you had it stricken from the record.
Q. Well, I'm asking the question now. Do you have an answer to that?
A. They didn't talk to me about it.
Ms. Strong: Okay. Well, let's take a look at what Mr. Kane said, your honor. I'd like to go ahead and play a
portion of Mr. Kane's deposition.
Mr. Panish: Well, she hasn't established it was this portion that he read. He said he read a chunk of his
Ms. Strong: I'm allowed to explore beyond -- if he's reviewed his deposition in connection with --
Judge: Are we reviewing this witness's depo?
Mr. Panish: She's trying to get to kane now.
Ms. Strong: He's relied on Mr. Kane's -- he's reviewed Mr. Kane's testimony in connection with giving his
opinions in this case, your honor. If you ignore certain portions of that testimony, we're entitled to explore that
Mr. Panish: She has to establish which portions he read and whether he read and relied on this portion. The
last answer just said he read a chunk of the testimony. I think she just played that. He hasn't established this
Ms. Strong: No, your honor. For cross-examination, you can go beyond what the expert has actually reviewed
to explore the reliability of his opinions, your honor; and if he's ignored portions of the evidence, we're allowed
to explore it under cross-examination, your honor.
Mr. Panish: That's not what it says under 721.
Judge: Well, let's find out if he has read that. Well, kane gave a depo. Is that what you're referring --
Ms. Strong: Yes, Kane gave a depo; and
he read the deposition, or at least he read parts of it, he said. And so I'd like to show a part of deposition.
Judge: Show him a part of the depo first to see if he considered it or didn't?
Mr. Panish: That's the point. You can't just put it up. 721(b), 1 through 3.
Ms. Strong: Your honor, I would --
Judge: Let's do one thing at a time. Show him first what it is you're talking about.
Ms. Strong: May I approach, your honor?
Mr. Panish: Can I know what you're showing him?
Ms. Strong: Page 119.
Mr. Panish: Well, I don't have it. You usually show the lawyer first.
Ms. Strong: 119, line 18, through 120, line 18.
Mr. Panish: Okay. Can I just look at it before you show it to him? I don't have that
With me. I didn't bring every deposition.
Judge: The other thing is you could all stand up here while he's looking at it.
Mr. Panish: I'll sit back here. It's okay. Okay. 119, line 18. There's objections to the deposition.
Ms. Strong: May I approach?
Mr. Panish: Not by us. It's also the wrong standard. It's a totally improper attempt to use that.
Judge: Maybe. Let's see.
The witness: One portion got stricken from what I said before. Okay.
Judge: So the question is?
Ms. Strong: That in forming his opinions, he ignored Mr. Kane's testimony that it's entirely speculative as to
whether Michael Jackson would have completed the 50 shows at the 02.
Judge: Did he ignore it or did he consider it, Kane's opinion?
Mr. Panish: First of all, it's not his opinion, and it's a different standard. It's not an expert standard. And also,
she hasn't established that he relied or reviewed that portion of the testimony. That's what I thought she was
going to first do.
Ms. Strong: Your honor, it's not necessary on cross-examination, under people versus Montiel.
Judge: A criminal case.
Ms. Strong: Yes, your honor. Same rules of evidence, it's proper for prosecutor to use one expert's testimony
to cross-examine another expert even though the other expert never reviewed that testimony.
Mr. Panish: He's not an expert.
Judge: Well, kane was an expert retained by you?
Ms. Strong: He's a non-retained expert. But it's not just other experts, your honor. That was just an example.
There's another case where it's appropriate to examine hearsay --
Judge: Let me ask you, did you review that portion of his testimony?
The witness: I read his testimony.
Judge: Okay. So you did consider it. You didn't ignore it, you considered it?
The witness: I ended up ignore it.
Judge: Okay. He considered it -- so there's two issues. "I considered it, but I just disregarded it." so it's not as
though he never considered it. He did, he just disregarded it.
The witness: And I think it's in my deposition that I disregarded it.
Judge: That's a different thing.
Ms. Strong: And I wanted to know if he considered it, and the jury should understand what he's considered
and accepted, and what he's rejected.
Judge: He tried to explain that earlier.
Mr. Panish: And she moved to strike his answer.
Ms. Strong: So I'd like to show the testimony of Mr. Kane.
Judge: You don't need to show the testimony. Ask him if he considered it, he'll tell you he disregarded it. He
was ready to explain to you why he disregarded it, but you moved to strike it, which I granted. Now we've got
to undo that.
Ms. Strong: Only because it was unresponsive.
Q. Mr. Erk, did you consider Mr. Kane's testimony that it's just too speculative to determine how successful the
tour would have been, he could have gone onstage and it would have been
A. Disaster or it could have been the greatest history (sic) in the tour (sic) of the world?
Mr. Panish: I'm going to move to strike counsel trying to read the testimony, which is improper. The question
is did you consider that testimony.
Judge: It sounds like she's asking a totally different question now. So are you abandoning this?
Mr. Panish: I object that's different than what she asked before. The question is she just showed him the
testimony, "did you review that, yes or no? If you did, you ignored it, why?" that's the question.
Judge: Did you decide not to go with that line of questioning?
Ms. Strong: This is the substance of the testimony that I showed Mr. Erk, your honor. That's what Mr. Kane
testified, and I'm asking if he reviewed the testimony that I just read.
Mr. Panish: I'm going to move to strike what Mr. Kane testified to.
Judge: Okay. Motion granted. We're not going to -- we're not going to go through where you're just going to
read everything that Mr. Kane said and ask him if he considered it.
Ms. Strong: In evaluating the reliability of an expert's testimony, the jury gets to consider what he did and did
not do, and what conclusions he came to, to determine whether or not they would like to believe the expert's
Judge: Then just hand him all of his testimony and ask him if he considered it all.
Ms. Strong: But the jury needs to know what it is that he's considered or rejected, your honor.
Mr. Panish: That's not how it works. Objection, improper.
Q. And so did you consider that testimony?
A. No. I said I ignored it. I read it and ignored it.
Q. So you ignored Mr. Kane's testimony, the testimony of the business manager, about whether or not Michael
Jackson would have been successful on the tour?
A. I read his testimony and didn't think it applied to what my job was.
Q. You determined that it's not speculative at all that Michael Jackson would have done 50 shows, right?
A. It's tier 1. I said he more than likely than not would have performed all 50 shows had he not been killed.
Q. And then you said it wasn't even speculative that he would have gone on and done 260 shows as part of This
Is It, right?
Q. So that's what Mr. Kane was talking about, right?
Mr. Panish: Objection; move to strike. That's not what he was saying. It's improper use of the deposition by
Judge: Overruled. Obviously, there was a disagreement between the two experts.
Mr. Panish: He's not an expert.
The witness: He's not an expert, your honor.
Judge: He has a different opinion.
Ms. Strong: He's a non-retained expert.
Mr. Panish: Not on that issue.
Judge: He wasn't retained on this issue?
Mr. Panish: No, he's not an expert on that issue.
Judge: Okay. Then sustained.
Q. And he was Michael Jackson's business manager at the time that Michael Jackson died, correct?
A. That's correct, but he's not an expert for this.
Mr. Panish: For anything.
Q. The truth is that you certainly wouldn't know whether Michael Jackson would have performed successfully
Mr. Panish: Performed what? Objection; vague and ambiguous. It's also argumentative, "the truth is."
Judge: Overruled on argumentative, but performed --
Mr. Panish: It's also vague.
Judge: -- the 50 shows? Performed the 50 shows?
Ms. Strong: Would have performed successfully the This Is It tour as of June 2009.
The witness: Had he lived, I believe he would have performed the shows.
Ms. Strong: Okay.
Q. And so do you believe you know better than Michael Jackson's manager, Mr. Kane, whether he would have
performed successfully in June of 2009?
Mr. Panish: Same objections, your honor.
Q. You don't know whether he would have taken the stage or not, do you?
Mr. Panish: Asked and answered. How many times are we going to do that?
Mr. Panish: AEG thought he was going to do it.
Ms. Strong: Your honor, the speaking objections are --
Judge: No comments.
Ms. Strong: Go ahead.
Mr. Panish: Sorry.
Judge: Do you remember the question?
The witness: Yeah, I do. I believe had he lived, he would have taken the stage,
Ms. Strong: I'd like to play for impeachment line 673-3 through 9 of his deposition.
Mr. Panish: Line 673?
Ms. Strong: I'm sorry. Page 673, lines 3 through 9.
Mr. Panish: Go ahead.
(the following videotaped deposition testimony was played):
Q. Mr. Erk, do you believe you know better about whether Michael Jackson would have performed successfully
or not than his business manager in June 2009?
A. And I answered we're accountants, so I -- we don't know whether our clients would actually get onstage or
The witness: Sticking with Michael Kane's testimony. We're back to it again.
Q. By Ms. Strong: Mr. Erk, in reaching your opinions in this case, you assumed that Michael Jackson was in
very good health, correct?
A. The reports were he passed his physical, his biologicals came in, so I didn't have any reason otherwise to
Q. And my question is, you assumed he was in very good health, correct?
Q. So you didn't find out whether Michael Jackson had long been addicted to demerol in forming your
Mr. Panish: Assuming facts not in evidence. No facts of that in evidence.
Judge: What was your question?
Q. You didn't find out whether Michael Jackson had long been addicted to demerol, did you?
Judge: You didn't assume that?
Mr. Panish: There's no evidence.
Mr. Panish: She made it as a statement.
Judge: I know, but I think what she meant was he didn't assume.
The witness: Can we take a break?
Judge: Let's take a 15-minute break. We'll comeback at 3:15.
Judge: Katherine Jackson versus AEG Live. Okay. You may continue with your cross-examination.
Ms. Strong: Thank you, your honor. I don't know if there as an answer to my last question. I'll rephrase it.
Q. You did not consider that Michael Jackson was taking demerol on a regular basis in
June 2009 in forming your opinions, correct?
A. No, I did not.
Q. And you did not consider that Michael Jackson was taking propofol in June 2009, either, correct?
Q. And, in fact, in coming up with your opinions that Michael was going to go ahead and complete 50 shows,
and then go on to complete a 260-show tour, and then predictions after that, you didn't consider any drug use at
all by Michael Jackson, correct?
Q. And, in fact, you didn't even know about it, plaintiffs' lawyers didn't tell you about that drug abuse, did
A. They didn't tell me about drug abuse, no.
Q. You were not even aware of it, correct?
A. I'm not even aware that he was a drug abuser.
Q. I'm sorry?
A. I said I'm not aware that he was actually a drug abuser. There are only media reports to that effect.
Q. You never saw any
Of the medical experts in this case, their testimony?
Q. And you never saw any of the testimony of the doctors in this case; is that right?
A. That's correct.
Q. And I imagine, then, that plaintiffs' counsel never told you that before Michael Jackson died, Michael
Jackson was warned repeatedly by medical professionals that he could die from using propofol for sleep?
Mr. Panish: First of all, number 1, assumes facts not in evidence.
Q. Plaintiffs' lawyers never told you that anyone warned Michael Jackson about the risk of using propofol for
Mr. Panish: Same objection. It's way beyond the scope, and it's not a fact in evidence at this time.
Judge: Not yet. Was there something he might have reviewed, maybe?
Mr. Panish: Nothing he reviewed.
Ms. Stebbins: Your honor --
Mr. Panish: He already said he didn't review any medical records. Can we just have one of the attorneys
Ms. Stebbins: Your honor, there's plenty of evidence that Mr. Erk could have reviewed. I believe Ms. Strong is
just trying to find out whether he reviewed -- there is evidence that supports Ms. Strong's question.
Mr. Panish: She's trying to introduce all kinds of evidence herself. The question is did he review any medical
records or doctors. They're not in his area, he said no. That should end the inquiry. She shouldn't be trying to
inject her own testimony.
Judge: Did he review --
Mr. Panish: No.
The witness: I did not.
Judge: He didn't say that he didn't see any evidence of drug abuse in what he reviewed, but it --
Q. I believe you testified you did not review any medical records in this case, correct?
A. That's correct.
Q. And so you didn't review the testimony that indicated that Michael Jackson had been warned about the
dangers of using propofol for sleep; is that right?
Mr. Panish: I'm going to object, assuming a fact not in evidence not considered by this witness, and counsel is
attempting to testify.
Judge: All right. Let's go to sidebar for a minute.
Judge: Okay. Who was the witnesses who testified about the warnings about the propofol?
Ms. Strong: We can proffer, your honor, that cherilyn lee will be testifying to that. She testified to that in her
deposition in the case.
Ms. Stebbins: There's also testimony from christine quinn, although that was not in 2009; from -- Dr. Barney
van valin testified that he warned Mr. Jackson about that. Dr. Metzger testified in 2009 he warned against the
dangers of intravenous sleep medicine.
Judge: The appropriate question would be assume there will be testimony that x.Y.Z. Assume there will be this
testimony, does that change your opinion.
Mr. Panish: No. First what she did was she said, "Did you review this?" "No." then she starts injecting in her
interpretation in the testimony. That's improper. That was an improper line of questioning, and she keeps -- and
even when it's sustained, she keeps doing it over and over.
Judge: Okay. You need to change.
Mr. Panish: And he said it wouldn't affect any of the medical testimony. So there's no need to keep asking this
and this and this. Would any of the medical testimony in any way affect your opinions? That's the question.
Ms. Stebbins: Your honor, it's fair cross-examination; and Ms. Strong's question was not improper in that there
is a good-faith basis for it. I understand you want her to rephrase, but it's not improper to ask the witness did
you consider important evidence in the case; and if not, why not.
Judge: Okay. Assume that there will be testimony in this case, if it hasn't already been given.
Mr. Panish: It's not in the case yet.
Judge: Apparently --
Mr. Panish: They say it's going to be. Okay.
Mr. Putnam: An expert looks at deposition testimony all the time, as this expert, did prior to our ever going
into the courtroom. And so the question is what did you look at, and what didn't you look at?
Judge: Apparently he didn't look at this.
Mr. Putnam: But you're allowed to say why didn't you look at the drug stuff? Why didn't you look at the
propofol? Why didn't you look at the demerol?
Mr. Boyle: He's an accountant.
Mr. Panish: You're not allowed to do that.
Mr. Putnam: He's -- $1.3 billion.
Mr. Panish: Then I can cross-examine every one of their experts on any issue in the entire case. That's what
Ms. Strong: When it's relevant to their opinions --
Mr. Panish: It's not relevant to his opinion.
Ms. Strong: -- whether Michael Jackson could perform a tour.
Judge: It may be relevant to the opinion so you'll be allowed to ask it in the way that I've --
Mr. Panish: I'm going to ask all of them, just so I know. That's fine. But she's not asking it in the proper way,
and she hasn't asked it --
Ms. Strong: According to you.
Mr. Panish: No; according to the law and the way it works in this state.
Mr. Putnam: And in your hundred cases. I know the drill.
(the following proceedings were held in open court, in the presence of the jurors)
Q. Mr. Erk, assuming that there's testimony that Michael Jackson was repeatedly warned about the dangers of
using propofol for sleep, do you think that's something that would impact your opinions in this case about
whether or not Michael Jackson would have lived to have gone on and done the 50 shows, and then the 260 you
projected, and then the four tours thereafter?
Q. So you'll agree, though, that Michael Jackson -- the mere fact that he agreed to do the 50 shows doesn't
mean that they're actually going to happen, correct?
A. Anything could happen.
Q. Well, you know that Michael Jackson has a history of backing out of things he agreed to do, right?
Mr. Panish: Vague and ambiguous.
Q. Are you aware that Michael Jackson previously cancelled tours?
Mr. Panish: The whole tour? Vague and ambiguous. The whole tour? Part of the tour?
Q. You were asked at your deposition whether you were aware that Michael Jackson previously cancelled
A. I may have been. I don't recall.
Q. And you said that you were aware that Michael Jackson previously cancelled tours, correct, Mr. Erk?
A. Cancelled tours or shows, I don't remember my answer.
Q. The question was, are you aware that Michael Jackson previously cancelled tours? And the answer was yes.
Do you recall that?
A. If I said that, then I said that.
Q. And, for example, he cut short the "dangerous" tour in 1993, correct?
A. That's not canceling a tour, that's canceling dates.
Q. He cancelled a number of shows at the end of the tour, correct?
Q. And do you know that he would even back out of deals even if that meant that he would get sued? Right,
Mr. Panish: Objection; relevance.
Judge: Overruled on relevance.
Mr. Panish: 352.
Judge: Is this something from a deposition that -- okay.
Mr. Panish: Even if they asked it at the deposition, it doesn't mean it's relevant. It's so far afield, 352.
The witness: I don't know that he intentionally cancelled for the sake of canceling. Q. By
Ms. Strong: But you're aware that he would back out of deals even if that meant that he would get sued in
litigation for it?
A. I don't know if that spoke to state of mind that he didn't care that he got sued. I'm not aware of the deals that
you're speaking of. If you can tell me the deals, I can opine on them.
Q. Well, do you know that he failed to do a series of millennium concerts leading up to new year's eve in the
A. I was only aware of the two millennium concerts crossing the dateline.
Q. You are aware of those concert tours?
A. The two -- not tours. Two shows.
Q. And those didn't happen, right?
A. And I believe the reason they didn't happen is --
Q. The question is those didn't happen, correct?
A. No, they didn't happen; but I can explain.
Q. Okay. And so do you know that Michael Jackson was ordered to pay more than $5 million for breaching his
contract associated with backing out of the millennium concerts?
Mr. Panish: First of all, assuming facts not in evidence.
Mr. Panish: Number 2, irrelevant, 352.
Judge: You need to establish that, in fact, he backed out of it, it was
A. Breach when he backed out.
Q. Are you aware of a litigation relating to the millennium concerts?
A. Only by media reports.
Ms. Strong: Your honor, I'd like to mark a judgment and ask that the court take judicial notice of a judgment.
It's Erk number 4.
Mr. Panish: There's no notice of this. The judicial notice statute requires notice to counsel before any -- this is
the second time they've tried to do this without any proper --
Judge: Did you give counsel notice --
Mr. Panish: Under evidence code section 45
-- it's also way, way tangential.
Judge: I thought you said there was something in the deposition?
Mr. Panish: Right.
Ms. Strong: There was deposition testimony about it, as well, your honor.
Mr. Panish: That's under evidence code 451 and 452 regarding notice.
Ms. Strong: Your honor, I --
Mr. Panish: And it's also 352. What does it have to do with anything in this case?
Judge: 451 doesn't address notice. You're talking about notice to you?
Mr. Panish: Yes. Notice to everyone.
Judge: I didn't see that on there.
Ms. Stebbins: As far as I know, your honor, there's no advance notice requirement for judicial notice, it can be
taken by the court at any time.
Mr. Panish: There is.
Judge: So you want me to take --
Mr. Panish: It's under 453, your honor, judicial notice shall be taken on any matter specified, if, number 1,
gives adverse parties sufficient notice through requests, pleadings or otherwise to adverse party at their request,
Further furnishes the court -- take judicial notice, and it goes on with the law and provision requirements
regarding notice. That is what it says.
Ms. Stebbins: Your honor, that's for compulsory. That's somewhat different. A. Request for judicial notice --
Mr. Panish: Your honor --
Judge: "records of any court of this state or any record of the united states."
Mr. Panish: It's not a certified copy, either.
Judge: Well, no. It has the superior court stamp, santa barbara.
Mr. Panish: It's a fax.
Ms. Strong: There's also a public record hearsay exception under evidence code 1280, your honor.
Judge: But 453 says you should give notice to the other side. Were they aware that you were going to --
Mr. Panish: No.
Ms. Strong: For cross-examination, there's no obligation.
Mr. Panish: It's not on the exhibit list.
Ms. Strong: Because it's cross-examination, your honor.
Mr. Panish: It's not on the exhibit list, 352.
Judge: Well, it's not 352. All right. I'll allow you to use it.
Ms. Strong: Thank you, your honor. May I approach, your honor?
Judge: Yes, you may. What is it marked? What number?
Mr. Panish: But this was -- this is not a final judgment. Okay, your honor? There was a subsequent
Judge: It says judgment on jury verdict.
Mr. Panish: Yes. But there's a subsequent proceeding. This isn't -- this is a -- from a trial. There was
something that happened after this.
Ms. Strong: 13464, your honor. Exhibit 13464.
Judge: Well, it's signed by the judge, and dated.
Mr. Panish: Yeah, but it's not --
Judge: And it's got a filed stamp.
Mr. Panish: Your honor, can I put something on the record on this first, before we get into this?
Judge: We'll do it at a break.
Ms. Strong: Your honor, so --
Q. Mr. Erk, what you have in front of you. Can we go ahead and put this up on the screen, Pam? This is a
judgment on jury verdict, you see, between Marcel Avram versus Michael Jackson. Do you see that, Mr. Erk?
Q. Do you know who Marcel Avram was?
A. A promoter.
Q. One of Michael Jackson's promoters?
A. Yes, who also served time in jail, I believe.
Mr. Panish: I mean, there's a whole bunch more to this, your honor, that's going to come out.
Judge: I guess so.
Mr. Panish: It is 352.
Ms. Strong: And let's look at page 2 of this verdict. It says judgment on jury verdict, and at number 1, breach
of contract, at the time of signing of the January 14th, 1999 four-concert agreement, who -- hold on a second --
I'm sorry. Let's go down to question number --
Mr. Panish: No, no. Your honor, it's been misrepresented what this is, and what happened, and I think it needs
to be put into context. Mr. Avram was suing for the production costs, which Mr. Jackson did not owe, and the
jury found that.
Judge: Your statements are stricken, Mr. Panish. If you want to come back --
Mr. Panish: That's why I wanted to go to the sidebar to say this, but I need to put it on the record.
Judge: You can put it on the record later.
Mr. Panish: But I want to make it clear that I'm objecting, this is improper.
Judge: I hear you objecting.
Mr. Panish: 352, and it's been misrepresented. Okay? So as long as it's clear. Because that's not what
Mr. Panish: Okay.
Ms. Strong: Okay. Let's look at number 3. "did Mr. Jackson breach the January 14th, 1999 contract by failing
to perform the millennium concerts? Check one."
Q. Do you see where it's checked yes?
Q. And let's turn to page 4 of the jury verdict in Marcel Avram versus Michael Jackson. And do you see where
the jury awarded Michael Jackson -- Marcel Avram $5.3 million for breaching the agreement. Do you see that?
A. Which number are you looking at?
Q. Under 7-b on page 4 of the verdict.
Q. Do you see that?
Q. And that was because Michael Jackson backed out of the millennium concert, correct?
Mr. Panish: Your honor, objection. Misstates. First of all, there's no foundation for this witness knowing what
Judge: She's asking if he knows. Do you know?
The witness: No, I don't know.
Q. So you didn't consider that in forming your opinions in this case, correct?
Mr. Panish: Excuse me. And I'm also going to object because this is Marcel Avram's claim -- never mind. I
Q. You didn't consider that in connection with forming your opinions in this case, did you, Mr. Erk?
A. I wasn't even aware of it.
Q. And Michael Jackson had another dispute with another business partner over some agreements that he had
with respect to that one. This is a bahrainian business partner, two seas records. Are you aware of that?
Q. You're not aware of the dispute between Michael Jackson and two seas records?
Mr. Panish: Your honor, number 1, asked and answered. Number 2, irrelevant, 352, has nothing to do --
Judge: I'm not sure where we're going. Overruled so far.
Ms. Strong: We'll get there quickly, your honor.
Q. Have you seen the AEG -- I believe you testified earlier that you've reviewed the AEG/Michael Jackson tour
Q. So why don't we go ahead and put that -- that's already in evidence in this case, so let's put that up on the
screen. It's 677, dash, 0150. And let's go ahead and turn to -- do you recognize this as the agreement, the tour
agreement, between Michael Jackson and -- the Michael Jackson company and AEG?
A. Yes, I do.
Q. And let's go ahead and turn to paragraph 4.21.
A. I would like to have the actual agreement, though, to tell you the truth, because seeing it on the screen
doesn't help me much.
Ms. Strong: Sure. Would you like a copy, too, your honor?
Judge: No, thanks.
Ms. Strong: May I approach?
Judge: Yes, you may.
Q. And before we look at this, did you review shawn trell's testimony in this case?
A. Yes, I -- yes, I did.
Q. The trial testimony, right?
Q. And you reviewed Randy Phillips' testimony in this case?
A. Yes, I did.
Q. So do you recall that they both testified about two seas records, a dispute with two seas records?
A. I don't remember the -- the title two seas records. I do remember a middle eastern issue that needed to be
Q. Okay. Well, let's go ahead and look at paragraph 4.2.1, where it says, halfway down, "promoter shall loan
artist and artistco the sum of 5 million united states dollars." do you see that?
A. Yes, I do.
Q. Okay. And then we'll jump down where it's talking about how that payment would be given. It says "such
payment shall be made within four business days of the satisfaction of the foregoing conditions: By transferring
--" and under a , it says "$3 million pursuant to written wiring instructions provided by two seas records as a
payment made on behalf of artist and/or his affiliates in connection with artist's settlement with two seas
records." do you see that?
Q. And Randy Phillips testified that the $3 million advance went to settle a lawsuit filed by this bahrainian
business partner, correct?
A. I assume so. That was 1100 pages of testimony. I don't remember this specifically.
Q. And that lawsuit had to do with signing over -- Michael Jackson had signed over his touring rights, correct?
A. I don't recall that that's the case.
Q. And so you don't recall that Randy Phillips testified here in court that Michael Jackson had to settle with his
bahrainian business partners before he could agree to go ahead and tour with AEG Live? You don't recall that
testimony from Randy Phillips in this trial?
A. No. As I said, it was 1100 pages. I don't recall seeing that part of the testimony.
Q. Okay. So that's another example, though, where there was a dispute that Michael Jackson had with one of
his business partners regarding doing a project that Michael backed out of; isn't that right?
Mr. Panish: Well, objection. No foundation. How do we know what happened?
Q. That was a dispute where there was an allegation at minimum that there was an agreement with Michael
Jackson and his bahrainian business partners with respect to touring, correct?
Mr. Panish: There's no foundation on this for this witness. It doesn't say in that document.
Judge: Not in the document, but perhaps there was in the testimony. I don't know. I don't remember.
Mr. Panish: They didn't talk about that.
Q. And karen faye testified about how there was an agreement for the bahrainian business partners that Michael
backed out of, and there was a pattern that she was worried about observing? She testified about that in this
trial, as well, right, Mr. Erk?
Mr. Panish: First of all, objection. He didn't review karen faye's testimony. We've already
been down that road. It's an improper question by counsel again.
Judge: Overruled. Sustained as to the karen faye, though.
The witness: Repeat the question, please?
Q. So you're not aware of the testimony about this dispute and the fact that it was a dispute over Michael
Jackson's touring rights? Just you're not aware of it?
A. I said I didn't see it in the testimony.
Q. Okay. And assuming it were there, would that affect your opinion at all in this case?
Q. And there's other examples of litigation against Michael Jackson based on allegations that he backed out of
agreements with folks, aren't there? There's other litigations out there?
A. I'm not aware of them.
Q. You're not aware of them? Did you review Barry Segal's deposition in this case?
A. Yes, I reviewed his testimony.
Q. And who is Barry Segal?
A. Barry Segal was a former partner of mine at gelfand.
Q. He was one of Michael Jackson's business managers from the period of 2001 to 2003? Does that sound
Q. And Mr. Segal testified about a lawsuit that mark schaffel filed
Against Michael Jackson after Michael Jackson backed out of a plan to do a project with him, correct?
A. I guess.
Q. And that was over a television special project in the 2003 time period?
A. Is that the c.B.S. Project?
Q. Are you familiar with the testimony from Barry Segal?
A. I don't instantly recall every particular in his testimony.
Mr. Panish: Your honor, I'll object. It's also improper testimony and evidence under 1101(a) and (b), attempt
to introduce some type of character evidence.
Judge: No. Overruled.
Mr. Panish: There's no establishment of --
Q. So I take it, Mr. Erk, that you're not familiar with the complaint that was filed in l.A. . Superior court on
november 16, 2004, by mark schaffel against Michael Jackson for breach of contract?
Q. In forming any of your opinions in this case, and in deciding whether or not Michael Jackson would have
actually completed the 50 shows at the 02, did you take into account any of Michael Jackson's prior failed
A. No. He needed to work.
Q. Well, in fact, you weren't even aware of his prior failed projects, were you, Mr. Erk, in forming your
A. I think I testified I wasn't aware of his prior failed projects.
Q. And you didn't take into account when you formed your opinions in this case that Michael Jackson would
have gone on and actually completed the 50 shows that he'd previously cancelled tours?
A. No. Q. And you didn't take into account in forming your opinions in this case that Michael Jackson hadn't
performed in 12 years, did you?
Mr. Panish: Asked and answered.
Ms. Strong: That he didn't take it into account at all?
Judge: I think he said he --
Mr. Panish: You already asked him that.
Judge: I think he answered that.
Mr. Panish: He did.
Ms. Strong: I hope, then, the answer, then, was he did not take it into account; because I don't recall the
precise question being asked that way, your honor.
Mr. Panish: Move to strike counsels' testimony. My objection was sustained. There's no need for her to start
Ms. Strong: If the record is clear --
Mr. Panish: The objection is sustained.
Judge: Keep going.
Ms. Strong: Okay.
Q. So that's something -- whether or not Michael Jackson had toured in the past 12 years, that's something that's
not relevant to your opinion?
Mr. Panish: Objection; asked and answered.
Ms. Strong: So we've talked about litigation, failed projects.
Q. When you came up with your opinions in this case, you also chose to reject the sworn testimony of Michael
Jackson's son Prince Jackson, correct?
Mr. Panish: Vague and ambiguous. His whole deposition?
Judge: Did he reject it or did he consider it?
Ms. Strong: Well, he considered and rejected it, your honor. He previously testified he rejected Prince's
Judge: Overruled. You may -- I'm not clear that he said he rejected it, but --
Ms. Strong: Well, I'm referring to his deposition testimony, your honor.
The witness: And then I subsequently spoke to him, and I have a different opinion.
Ms. Strong: Okay.
Q. But at your deposition in connection with forming your opinions in this case, you reviewed Prince Jackson's
deposition testimony about his father not wanting to tour after the 02, and you rejected it, correct?
A. As far as the rest of the world, yes.
Q. No. In fact, you rejected his testimony that he did not believe his father wanted to do more than 50 shows,
A. I believe I said that, yes.
Q. And you didn't bother to read Ms. Katherine Jackson's deposition testimony before creating your opinions in
this case, did you, Mr. Erk?
Mr. Panish: That's also argumentative, "you didn't bother."
Judge: Okay. It's argumentative. Sustained.
Q. Mr. Erk, you didn't review katherine Jackson's deposition before giving -- forming your opinions in this
case, did you?
A. No, I did not.
Q. Well, did anyone tell you about what she said about her son touring, the future of her son's touring career?
Ms. Strong: I'd like to play, your honor, a portion of katherine Jackson's deposition as a party opponent, your
honor, pages 458, line 21, through 459, line 25.
Mr. Panish: Can I just see it first? Which day?
Ms. Strong: Volume 3.
Mr. Panish: Where are you going to stop at?
Ms. Strong: It goes through 459, line 25.
Mr. Panish: Go ahead.
(a video clip from katherine Jackson's deposition is played)
Q. And so I take it you didn't take into account mrs. Jackson's testimony that Michael told her he didn't want to
be doing the moonwalk onstage when he's 50, did you?
Q. And the truth is you can only speculate as to whether Michael Jackson would have gone on to perform 260
shows; isn't that right, Mr. Erk?
A. I don't think so. I think there was plenty of testimony that supported that he would have done the shows,
especially he was under hardship, he needed to go back to work. Why else would he have signed the three-year
deal with concerts west, AEG?
Q. Well, if Michael Jackson didn't want to do the shows, you could only speculate to opine that 260 shows
would have happened, isn't that right, Mr. Erk?
A. No, it's not speculative. I think I was reasonably assured he would have performed them. He called it the
This Is It tour, his one final blast going out.
Ms. Strong: Let's go ahead and look at page 124 of Mr. Erk's deposition, line 8 through 17.
Mr. Panish: 124, line 8?
Ms. Strong: Line 9, I'm sorry, through 17.
Mr. Panish: Well, it was objected to. And the answer goes on to explain it, exactly what he just said.
Ms. Strong: Can I play it, your honor?
Judge: Hold on. I'm still looking at it.
Ms. Strong: I'm sorry.
Mr. Panish: Your honor, it's really taken out of context, and he goes on to explain exactly.
Judge: That's what I'm reading.
Mr. Panish: He's responding to the objection, the way she asked the question. It's really an improper use of a
depo. It's also not impeachment because he answers the question exactly consistent.
Judge: Well, the problem is he does go on, toward the end of the page, to explain.
Mr. Panish: He explains it all, exactly what he's saying, and it's taken out of context.
Judge: And you want to read from where to where?
Ms. Strong: 124, 8 through 17. It's 9, your honor.
Mr. Panish: It's totally out of context.
Judge: You can read it, but you're going to have to read through 125, line 1.
Ms. Strong: I've got the first part keyed up on the clip, and then I'll read the rest, your honor.
Mr. Panish: Can we just play it all?
Ms. Strong: It's not teed up.
Judge: Is there some reason why it can't be --
Mr. Panish: Why don't you just read it all, then? Read the objection, too.
Judge: No, no reading the objection.
Mr. Panish: Well, he's responding to it, though.
Ms. Strong: I've teed up the first part, and I'll read the next.
Judge: No. Just read the whole thing.
Mr. Panish: Your honor, but he does -- his answer, he's responding.
Judge: Objections are always taken out.
Mr. Panish: It gives context to the response. If you look what he says, it's in response to the objection.
Ms. Strong: Mr. Panish, how far -- your honor, how long did you want --
Judge: I said 125, line 1.
Mr. Panish: I would like more.
Ms. Strong: We'll see if we can get it on.
Judge: Just eliminate the objection.
Ms. Strong: She's eliminated the objection. Thank you.
Judge: Oh, so she edited it? That was fast.
(the following videotaped deposition testimony is played):
Q. The fact that maybe Michael Jackson didn't want to perform 260 shows, that's one reason why there maybe
wouldn't have been 260 shows had he lived, correct?
A. That's exactly what I was going to say. I can only speculate to that.
Q. And why is that?
A. Because it was -- my opinion based on all the facts that I had in front of me, even considering what you've
said, is that he intended to do a three-year tour. It was called This Is It I mean, this is the king of pop, and I
think with reasonable certainty he would have -- he would have performed those shows.
Mr. Panish: You can play the rest if you want.
Mr. Putnam: Move to strike, your honor.
Mr. Putnam: He keeps making ad hominem comments.
Mr. Panish: She started playing it, I said it's okay to play that.
Judge: Just no more comments under the breath.
Mr. Putnam: Thank you, your honor.
Mr. Panish: It wasn't under my breath, I said it out loud.
Judge: If you're going to say it, say it loud enough so I can hear it and admonish you.
Mr. Panish: I'm sorry.
Judge: If you're going to say it, say it loud enough so I know how to respond.
Mr. Panish: My response was, your honor --
Judge: No, no. I don't need to hear it this time. You already know what I think. Keep going, Ms. Strong.
Ms. Strong: Thank you, your honor.
Q. Now, Mr. Erk, when you came up with your opinions, you rejected Mr. Prince Jackson's testimony, but you
went ahead and relied on handwritten notes in a dewey leboeuf memo even though you have no idea who wrote
those notes; isn't that right?
A. I'm not sure what you're referring to.
Q. You don't remember relying on handwritten notes with numbers?
A. Tell me what the handwritten notes were about, because I don't think they understand what notes you're
Q. Well, do you know what I'm talking about, handwritten notes in a dewey leboeuf memo?
A. I can only surmise you mean with respect to consumption.
Q. I believe -- yes, in coming up with your consumption number, you relied on handwritten notes in a dewey
leboeuf memo, even though you had no idea who wrote those notes, correct?
A. No. I believe what happened was I took the typed amounts on the dewey leboeuf
Memo, which added up to a smaller amount of consumption. I have no idea who wrote in what the other
amounts were on there. But I wanted to err on the side of being conservative, and I took the other amounts and
it greatly increased the consumption from about 77 million, if I recall correctly, to 134. So I erred on the side of
Q. Okay. And, again, consumption, you mean the expenses of Michael Jackson to live day by day, correct?
Q. All right. So let's go ahead and look at that memo. Before, do you recall that you opined that the
consumption number is that Michael Jackson would have spent 6.8 million per year on consumption? Do you
A. I don't remember the exact amount; but if that's what I said, yes.
Q. Okay. And that works out to about $570,000 a month, is what he predicted Michael Jackson would spend on
Q. Do you need to see your document to be refreshed in that regard?
A. No. It's in the ballpark, so I'm fine with that.
Q. Okay. So your opinion with respect to your consumption number, how much Michael Jackson would have
spent for his life, had he continued to live, was about $570,000 a month; is that right?
Q. But Michael Jackson actually spent a lot more than $570,000 a month when he lived, didn't he?
Mr. Panish: Vague and ambiguous as to time.
Judge: Sustained. What time period?
Q. Do you have an understanding that historically, through the 2000's, Michael Jackson spent more than
$570,000 a month to live?
Mr. Panish: Are you saying -- well, he didn't live the whole 2000's, so -- vague and ambiguous as to time.
Judge: You need to be more precise.
Q. Mr. Erk, are you aware that Michael Jackson, from -- go back further, but from January 2000 to June 2009,
Michael Jackson generally spent more than $570,000 a month, didn't he?
A. I don't know that.
Ms. Strong: Well, let's look at the memo that you relied on to come up with your numbers. Jessica, it's exhibit
693, dash, 157.
Mr. Panish: So what -- have we established that he relied on this yet?
Judge: Let's see.
Mr. Panish: Well, that's what I'm asking. Am I saying that loud enough? Are we establishing this --
Mr. Panish: I don't know.
Judge: Before you put it up, make sure --
Ms. Strong: Yes. May I approach, your honor?
Mr. Panish: For the record, this is a different exhibit number.
Judge: I was told it was 693.
Ms. Strong: To be clear, the full exhibit is 693.0154 through 693.0166.
Mr. Panish: The one I have is a different number. I don't have any points --
Ms. Strong: Dash. Sorry.
Mr. Panish: No worries. I got it.
Ms. Strong: All right.
Q. Is this the memo that you relied upon to come up with your consumption number in this case?
A. It looks like it.
Ms. Strong: And let's go ahead and put it up, Pam. Why don't we go to the first page of it. Well, actually,
where you are is fine. Let's look right there. She pulled up the page with the notes on it, just so we're all clear
what we were just talking about.
Q. Are those the handwritten notes that you relied upon in connection with forming your opinion in this case?
A. Appears to be.
Q. And, again, you have no idea who wrote those notes, right?
A. That's correct.
Q. And you don't really even know what's contain -- exactly contained in those numbers, do you?
A. No; but they look like they're in addition to the other numbers that led up to coming up with these totals.
Q. But you don't know exactly what's contained in those numbers, right?
A. No, I don't.
Q. And let's go ahead and look at the first page of this memo. And you see that it's dated february 7, 2008,
Q. And it's to ron burkle, steve mortenson and lori crawford. Do you see that?
Q. Do you know who those folks are?
A. I think Burkle was -- was an accountant. I don't know -- I don't know who the other two are.
Q. And it's from Londell McMillan, correct? And John Quinones?
Q. Do you know who those folks are?
A. Londell McMillan, I do. Quinones, no.
Q. Who is Londell McMillan?
A. Was a partner in dewey leboeuf, is an attorney in New York, and I believe in certain instances, he
represented Michael Jackson.
Q. And what is Dewey Leboeuf?
A. It's a no-longer-existing law firm that was in New York.
Q. And in the "re" line, you see it says "estimated monthly expenses based on A .P. List received in connection
with the plainfield transaction"?
Q. What's an A .P. List?
A. Accounts payable.
Q. And what's the plainfield transaction?
A. I don't recall what the transaction was. Probably has to do with a loan.
Q. Do you know what the plainfield loan was?
A. Not off the top of my head, no.
Q. No idea?
A. I said not off the top of my head.
Q. Do you think you ever knew it in connection with your work in this case?
A. I don't think I ever considered it, so I don't think that it mattered to me.
Q. But you said that you testified that you chose to rely on this memo because you said it was the most recent
document available to you that had Michael Jackson's monthly expense numbers, right?
A. It boiled them down, yes. Because all I saw were a bunch of cash receipts and disbursements, nothing
summarized properly, so I -- I'd be -- very difficult otherwise for me to try to reconstruct his monthly
Q. Do you know who Jeff Cannon is?
A. Yes; that was his business manager at one time.
Q. And do you know whether he worked for Michael Jackson, Mr. Cannon?
A. Well, I know it was somewhere around 2005, 6, 7, somewhere in that area, 8.
Q. So would it surprise you, then, to learn -- actually, would it surprise to you learn that he worked for Michael
Jackson between 2008 and march of 2009, Mr. Cannon?
A. No, it wouldn't surprise me.
Q. But you didn't remember that in connection with forming your opinions in this case?
A. Not the exact period of time. He had several business managers.
Q. And you didn't review the documents Mr. Cannon produced about Michael Jackson's financial records from
the 2008 and 2009 time period, did you?
A. As I said, I saw a massive amount of cash receipts and disbursements that would have required untold man
hours to boil it down to come up with a cohesive number for his monthly expenses.
Q. It takes time to figure out how much Michael Jackson actually spent when he was alive based on his
financial records, right?
A. No. Quite frankly, with my accounting system, I can push a button and it could sort it all for me and I can
figure out what he spent. I would assume cannon had a similar system, but I didn't see a document that
Q. And so from the documents that you saw, you think it would have taken a lot of time to figure it out from
those other financial records?
A. Of course, as I just said.
Q. And, in fact, at your deposition, you didn't specifically recall looking at Cannon's documents, did you?
A. No, I didn't.
Q. Well, let's look at this memo that you did rely on from the law firm. By the way, do you know if Mr.
Cannon is also an accountant?
A. I -- I don't know what his title is, whether he's a CPA or not. As I said in my deposition, I wasn't familiar
with Mr. Cannon when you asked me who -- if I knew the list of advisors throughout his tenure, Michael
Q. Well, you had a partner, a colleague of yours in your office, who also reviewed the depositions in this case,
A. That's correct.
Q. And that partner prepared notes for you about those depositions?
Q. And he did that so that you wouldn't have to read the depositions in full, you could look at your partner's
note about what people testified about in this case, correct?
A. Well, we're all qualified to do that; so he helped me out. I mean, we had a mountain of documents, or pages
of documents, to go through.
Q. And he took notes on Mr. Cannon's deposition for you, right?
Q. And in those notes -- why don't we go ahead and look at some of those notes, Pam, since we've got this issue
about what was testified to in this case. If we look at exhibit 132 --
Mr. Panish: I'm going to object to counsels' preamble. If there's a question, let's get a question, not a --
Judge: Let's get a question.
Ms. Strong: Let's look at exhibit 13125.009 -- or dash 009.
Mr. Panish: Can I see the exhibit before you put it up? Could I see the
exhibit before they put it up, that they've already put up?
Ms. Strong: May I approach, your honor?
Mr. Panish: Which page of all this? 9?
Q. Are these the notes that your partner took when he reviewed other depositions and prepared some notes
about those depositions in this case to give to you to review? Is that right?
A. Appears to be, yes.
Q. And then on -- if you go to page -- page 9, I believe --
Mr. Panish: Your honor, this is --
Q. -- you'll see notes of Mr. Cannon's deposition, correct?
Mr. Panish: Your honor, excuse my. I'm not going to object to her asking a question about this, but putting it
up and going through it in evidence, I don't think it appropriate. If she has a question specifically to this, that's
Judge: Okay. I'll sustain the objection to putting the notes up. Maybe you can ask the question first, and we'll
see if there's any basis to put the notes up.
Ms. Strong: These are the materials that he created -- he and his firm created in connection with preparing his
opinions in this case, your honor. It's his work product that he relied upon in forming his opinions in this case.
We'll proceed, but there's no reason this can't be put up, your honor.
Mr. Panish: That doesn't make it appropriate to put it up or bring it into evidence.
Judge: Let's first ask him the questions.
Ms. Strong: You see there in the notes with respect to Mr. Cannon's deposition --
Q. Can you tell me, Mr. Erk, how many pages of notes are there about Mr. Cannon's deposition here?
Q. So two pages of notes to review with respect to Mr. Cannon's deposition, right?
A. Yeah, but they referenced parts of the deposition which would have been more lines to read.
Q. And, again, Mr. Cannon was -- worked for Michael Jackson in the 2008 to 2009 time period, correct?
Q. And the first line of the note says that he's an accountant, correct?
Q. And this is on your two pages of notes about Mr. Cannon?
Q. And, again, I believe you said that you didn't actually, in forming your opinions in this case -- at your
deposition, you couldn't recall looking at Mr. Cannon's documents, right?
A. At the time, yes.
Q. All right. So let's go back to the dewey leboeuf memo that you did rely upon, the 2008 -- february 2008
A. Lawyer that you did rely on to come up with your consumption numbers in this case.
Mr. Panish: Same objections on this. It's okay to ask about it. Putting it up and all this is not appropriate.
Judge: Overruled. I'll allow it.
Ms. Strong: Let's go to the second paragraph?
Mr. Panish: Which page? Is it --
Ms. Strong: On the first page of the memo. And it says, a little bit more than halfway down, "we have also
requested but not yet received from diane williams of raymone bain's office invoices and a complete listing of
Mr. Jackson's recurring monthly expenses."
Q. Do you see that?
Q. So they're talking about how they've asked for some expenses that they haven't yet received and don't have
in the memo yet, right?
A. That's what it appears to say.
Q. And then if you go up a little bit above that in this memo, it says there may exist other monthly payees that
were not included on the a .P. List provided by Ms. Raymone bain's office, which would increase the aggregate
monthly expenses estimated herein. Do you see that?
A. But I believe if you read the rest of the paragraph at the end, it said it didn't include other monthly recurring
charges outside the scope of the a .P. List such as daily living expenses, legal fees, management fees,
accounting fees, and any other expenses you may deem appropriate. That is why I took the handwritten notes on
the page, because it did cover those items.
Q. Okay. Well, this front page of this memo is indicating that it's incomplete with respect -- the memo itself
indicates that it's incomplete with respect to Michael Jackson's expenses, correct?
A. It appears to say that, yes.
Q. And then you went ahead and assumed that all of the expenses that were left out of the memo were
accounted for in the handwritten notes, right?
A. Because I didn't have any other documents to tell me otherwise.
Q. Okay. But the answer to my question, was that right?
Q. Thank you, Mr. Erk. But you have no way of knowing whether that's true, right, Mr. Erk?
A. I think I testified earlier I don't know who did those handwritten notes.
And you don't know whether they actually accounted for all of Michael Jackson's expenses, either, do you, Mr.
A. No, I don't.
Q. For example, you don't even know whether the notes take into account his food expenses, do you?
A. I think there was a miscellaneous category in there, so --
Q. So let's look at those handwritten notes. What category are you referring to that food was in?
A. It says 20k, personal.
Q. So you think food may be in there, maybe?
A. Maybe. I don't know.
Q. But you actually don't know exactly?
A. I said I didn't.
Q. And there's actually many numbers that you note are not included in -- in these numbers, isn't that right, Mr.
A. It's possible, yes.
Q. For example, you reviewed the testimony of Barry Segal, correct? We already established that?
Q. And, again, Mr. Segal was one of Mr. Jackson's business managers, correct?
A. In the early 2000's, yes.
Q. In 2001 to 2003, right?
A. Right, six years before his death.
Q. And Michael Jackson -- Mr. Barry Segal testified that Michael Jackson was a heavy traveler who mostly
flew on private plains and stayed at the finest hotels, correct?
Q. And, in fact, Mr. Segal testified that Michael Jackson would normally pay to bring an entire entourage, and
they would take over a whole floor of a wing of a hotel, didn't he?
Mr. Panish: Objection; vague as to time. When?
Judge: Sustained as to when.
Ms. Strong: We've established that Mr. Segal, your honor, was working for Mr. Jackson between 2001 and
2003, so that's the time period we're talking about.
Mr. Panish: Now we know.
The witness: Yes.
Q. And that's what Mr. Segal testified, correct?
Q. And he testified -- Mr. Segal testified that Michael Jackson's financial records indicate that he spent
$435,000 on airfare and hotels in a two-month period alone, correct?
A. In the early 2000's.
Q. And Mr. Segal said that that was consistent with what Michael Jackson consistently spent on travel, correct?
A. Maybe at that time.
Q. But you didn't include anything at all for travel expenses in your consumption numbers, did you, Mr. Erk?
A. The consumption numbers are these, and there's no specific category that says travel.
Q. And if Michael Jackson spent $435,000 on airfare and hotels in two months, the 20,000 personal number
certainly isn't close to covering that, right, Mr. Erk?
Mr. Panish: Just objection as to time. 2001, 2003, then this 2008 wouldn't -- but it's vague as to time.
Judge: It is vague as to time.
Q. The point is if Michael Jackson -- if Michael Jackson -- may I, your honor?
Judge: You may.
Ms. Strong: Thank you.
Q. If Michael Jackson were to spend consistently with how he spent in the early 2000's, $435,000 on airfare
and travel, on hotels, in a two-month period, that $20,000 allocation in personal would not cover it, would it,
A. It's a different point in time, and I don't think that the cannon numbers ever reflected anything like that.
Q. And, in fact, the numbers you're projecting, these consumption numbers, let's be clear, these are about how
much you think Michael Jackson would have spent had he lived for the next 15 years, correct?
A. Based on this memo and adjusted for inflation, yes.
Q. And that's assuming that Michael Jackson would have been off touring and making all the projections
you've predicted, right?
A. When you're on the road, your expenses are getting paid for, so your monthly expenses for staying at home
and doing whatever you're doing -- you know, it's not the same.
Q. So you have him on the road for the next 15 years and not doing any personal travel?
A. No. I'm talking about the three years, and then when he's on the road for the four other tours that I said in
Q. Let's be clear about something. So in your consumption numbers, you're not taking into account any of
Michael Jackson's business expenses?
Mr. Panish: Objection; it's not consumption.
Judge: Business expenses as in -- I mean, you have accounting, attorneys -- I guess it's a little vague.
Q. Do you know what the Michael Jackson company was?
A. It handled all his affairs as far as I can guess. I don't know the corporate structure of Michael Jackson. I only
know a couple of things in that regard.
Q. And you know that the Michael Jackson company is the company that he used to handle all of his affairs?
A. If it is, okay.
Q. There's this primary operating company that Michael Jackson used?
Q. Do you know that one way or the other?
A. As I said, I didn't know his corporate structure.
Q. And do you know what the m.J.J. Productions is?
A. I can only surmise what it is.
Q. So you don't know that the m.J.J. --
A. Specifically, the answer is no.
Q. But that was Michael Jackson's primary operating entity before the Michael Jackson company?
Mr. Panish: Objection. He already answered.
Q. Do you know that Mr. Erk?
Mr. Panish: There's no foundation. He's already answered that question.
Judge: Overruled. Do you know if that is true?
The witness: No.
Q. There was hundreds of thousands of documents produced with information about income and expenses from
the m.J.J. Productions
and the Michael Jackson company, correct?
Mr. Panish: Objection. I'm going to object, assumes facts not in evidence.
Mr. Panish: It's also counsel again testifying.
Q. Do you know anything about the financial records that were produced for m.J.J. Productions and the
Michael Jackson company?
A. I did say previously there were massive amounts of paper, cash receipts and disbursements, but not
summarized in any form that I could have deduced what is monthly expenses were.
Q. And I just want to be clear, so I don't know if I got an answer to this. In your consumption numbers that you
came up with for your analysis, you're not specifically including any of the expenses of the Michael Jackson
company; is that right?
A. I said I used this memo. I didn't use anything else.
Q. Okay. But you are taking into account the earnings of the Michael Jackson company in your calculations,
Q. You're not?
A. I calculated what he would have earned on tour, merchandising, endorsements, Las Vegas, and royalties as a
result of last investigate s, and tier 2, which is tours and merchandise and a royalty bump. Those are my
Q. And you're not taking into account anything that the Michael Jackson company earned in connection with
your projected earnings?
A. Did I just not say that?
Q. Okay. I just want to make sure we're really clear about that. Is that right?
Thought I was being clear.
Q. Okay. So let's go ahead and look at AEG Live's contract. You saw AEG Live's contract with Michael
Q. To do the tour?
Q. Let's go ahead and put that up again. That's in evidence. It's 677-150. This is the AEG Live contract with
Michael Jackson --
A. Okay. I have it here.
Q. -- to do the This Is It tour, correct?
Q. Okay. And if we look at the very first paragraph of this agreement, I think the jury has seen this several
times, the -- the agreement is entered into between AEG Live doing business as concerts west, a delaware
limited liability company, on the one hand, and the Michael Jackson company, furnishing the services of
Q. Do you see that?
Q. So you're taking into account in your analysis earnings of the Michael Jackson company, correct, Mr. Erk?
Q. But you didn't consider any of the expenses of the Michael Jackson company, did you?
A. Not in the way that I said it before.
Q. And you have no idea how large those expenses are, do you? A. I think I said I didn't know what the
numbers boiled down to, correct.
Ms. Strong: Your honor, should we stop here? I'm at a good stopping point.
Judge: If you're at a good stopping point, yes, let's do that. Tomorrow, 9:30. I have a short calendar tomorrow,
so -- 9:30.
(the following proceedings were held in open court, outside the presence of the jurors):
Judge: Now is your time to put on the record any of your objections that I didn't let you put on before, Mr.
Mr. Panish: Yes, your honor. First of all, the court allowed counsel to -- to introduce in front of the jury a
judgment on a jury verdict. Okay? Which, under evidence 352, I'm going to now have to bring another witness
in to discuss this whole thing of what happened. It's not the way she represented it. And so it was 352, it's not a
final judgment, there's -- now we have to get into what was paid, what wasn't, what happened. There was no
notice under 453, judicial notice. It wasn't on the exhibit list. It was just brought up, thrown up in front of the
jury, given to me. And I think it was inappropriate, not to mention how tangential it is to say -- under 1101(a) or
(b), it's character evidence. So then now since AEG -- every lawsuit AEG has been in, does that show that
they're negligent? That they have a history of being negligent when a kid falls off the balcony at the AEG center
and they're sued, or all these other cases? Lawsuits? She's bringing up someone that brought a lawsuit --
Judge: It could be for notice purposes.
Mr. Putnam: Actually, your honor, these were lawsuits about whether or not he would complete the tour --
Mr. Panish: That's an allegation.
Mr. Putnam: -- was considered by the witness.
Ms. Stebbins: It was a jury verdict for breach of contract.
Mr. Panish: What happened to the verdict? Did it get finalized on appeal? What happened?
Ms. Strong: The relevant issue is whether or not he would back out of contracts or not. I believe plaintiffs have
made representations to this court, your honor, several times that -- some of their witnesses, that Michael
Jackson was under contract; therefore he had to go forward with the tour. But Michael Jackson has a history of,
whether there is a contract in place or not, deciding to do what he wanted to do, and this expert did not consider
that in forming these opinions.
Judge: Is there something that happened on appeal in this case?
Mr. Panish: What happened? What happened?
Ms. Strong: Your honor, Mr. Whitman testified at his deposition, one of Mr. Jackson's business managers at
the time, that he recalls there was a judgment, and it was in that neighborhood. That's what he recalls, it was
consistent with what happened.
Mr. Panish: What happened in the lawsuit after the judgment, counsel, that you put on?
Judge: What happened?
Ms. Strong: I'm unaware of any additional history.
Judge: Bring it on if you have it.
Mr. Panish: No, no. There's going to be -- then we get into a lawsuit was filed, just a lawsuit was filed. What
does that mean? That a lawsuit was filed, that we should bring out now that Mr. Anschutz owns the colorado
theater where everyone was shot and killed in colorado? That's negligence. Does that show he has a tendency in
the entertainment business to be negligent? Under 1101(a) and (b) --
Mr. Putnam: What does that possibly have to do with anything?
Mr. Panish: It has a lot to do with it, Mr. Putnam. You don't like to hear that. But there's lawsuits filed that
they had inadequate supervision, inadequate training, inadequate retention, just like in this case. Also's lawsuits
that have been filed against Mr. Anschutz's companies in colorado. They brought up Mr. Jackson was sued in a
lawsuit where somebody alleged something. That is character evidence. Character evidence is not admissible
for the purpose of proving --
Judge: It's not character evidence; but if that jury verdict was not final, and on appeal, it was reversed or
otherwise, then there's a problem.
Mr. Panish: Well, they brought it up without even finding out.
Ms. Strong: According to Mr. Whitman, there was a judgment, and we understood that was final, your honor.
The point here --
Mr. Panish: I want to add Mr. Howard weitzman to the witness list to come in and discuss that.
Judge: There must be something easier to figure out whether that judgment was final. I'm assuming it would
be. You wouldn't be introducing a judgment that isn't final.
Mr. Panish: They didn't even look, your honor. They just introduced it without doing the history. Okay? And
also, 1101(a) --
Judge: This is beginning to sound like the E.E.O.C. All over again.
Mr. Panish: There you go. And they're introducing evidence to show that Mr. Jackson would have acted in
conformity there with that other conduct, which is character evidence, which is explicitly excluded under
section 1100, 1101(a) and (b). You cannot produce prior incidents of conduct to prove conformity therewith in
another case, and that's exactly what they're trying to do. And they introduced a judgment that they say was a
judgment without even finding out what happened.
Ms. Strong: Your honor, Mr. Berman, I believe, testified that Michael Jackson, of course, would have gone
forward because he would have been sued for breach of contract. They've put up this issue as if the contract was
somehow so binding on Michael Jackson that he would not decide to back out of the tour. It's entirely
speculative as to whether he would have completed the 50 tours. It's important to put on the evidence of Mr.
Jackson's history; that it didn't matter to him whether he had a contract or not, he did what he wanted. That's
relevant to the fact that this expert did not consider any of these issues, your honor.
Mr. Panish: There's two issues that they're trying to introduce for character evidence to prove conduct and
conformity therewith in this case. That is not a proper use of other incidents. It's not for notice, it's not to prove
defect or causation, it's being offered to prove conduct in conformity therewith, which is the exact reason that
prior incidents of conduct are not admissible pursuant to 1101(a) and (b) of the evidence code.
Ms. Stebbins: Your honor, this is not character evidence, it's fair cross-examination on an expert who said it's
absolutely clear he was going to perform for years and years. Our understanding, as I understand from Ms.
Strong, is that a witness had authenticated that judgment. We'll obviously look into the issue. If there are any
issues with that, we'll come back, raise them with you tomorrow.
Mr. Panish: Your honor, they brought it in without even researching that.
Judge: I certainly hope that it is final and binding.
Mr. Panish: It was affirmed on appeal and paid, huh? That's what they're representing?
Ms. Strong: Your honor, it was -- it was represented by Mr. Whitman that he recalled that there was a
Judge: That's all, there was a judgment?
Ms. Strong: And it was in the neighborhood of $5.3 million.
Mr. Panish: Mr. Jackson wasn't even at the trial. Do you know that, counsel?
Judge: All I'm saying is I hope it's
final, because I don't want to have to undo what has just happened.
Mr. Putnam: Your honor, is this what the actual calendar is?
Judge: I think it is. Is that the final calendar?
The clerk: Yes, your honor.
Judge: You objected to various days.
Ms. Stebbins: It's a little bit terrifying. It looks like september and august, we're here every other day.
Judge: I knew that was going to happen, as soon as we got beyond the time frame that we told the jury, they
were -- everybody has pushed off all of their personal appointments to a time beyond when our trial was
estimated, so don't be surprised.
Mr. Putnam: I'm only surprised, your honor, because of the length of time the plaintiffs' case is taking
compared to what it -- as -- can I please finish speaking, sir?
Mr. Panish: You don't let me finish speaking, why should I let you?
Judge: Mr. Panish, please.
Mr. Putnam: Your honor, what I'm worried about is now they're going to conclude their case at the end of the
time the entire trial was to take place. We're going to try to put on a defense, we're going to get a day here and a
Mr. Panish: Your honor, there was an estimate of a 90-day trial that they gave. They've been putting on their
case just during ours, not to mention calling witnesses, cross-examining, et cetera. The schedule is what it is,
that's what happens in long trials. I brought that up at the very beginning, and this is what happened. I knew it
was going to happen, I told you that was going to happen.
May I ask what the plaintiffs' days off are for friday the 6th, friday the 13th, friday the 30th, and --
Mr. Panish: Are you going to cross-examine me now? Do I have to testify? I'm happy to testify, but -- I want
to know this. How long is Ms. Strong going to go tomorrow so I can know whether I should have another
witness or not?
Judge: I think you should have another witness available.
Mr. Panish: I'm going to just ask. How long do you think?
Mr. Putnam: Does that mean we don't get to know what those days off are?
Mr. Panish: No. It's personal. How is that?
Judge: Personal days, that's fine.
Ms. Strong: If we're only half day, I think I'll take the whole day.
Mr. Panish: Okay. That's fine. Tomorrow hopefully we'll be able to submit Dr. Brown -- remember, we did
the testimony -- remember, there was a whole issue about czeisler, and we needed brown, and then we -- it was
done, and we gave it to Ms. Cahan and Ms. Cahan responded back to us last night, I believe. And I think we
responded back to Ms. Cahan, so we should have that for you to see in the morning.
Judge: Oh, you mean designations?
Mr. Panish: Yes. There's not too much in dispute, really. We've been working with Ms. Cahan fairly well on
deciding that. However long this trial takes is fine. I need to know.
Ms. Strong: Your honor, with respect to scheduling, since they're on damages, can we have an estimate of
when they're going to close their case?
Mr. Panish: First of all, we're not done, potentially, with liability, just because we're putting on damages
witnesses. But I said I was going to try to finish this week. Now we'll see. That's what I'm trying to do.
Judge: How many more witnesses do you have? There can't be that many more.
Mr. Panish: I have some more witnesses, I've told them through wednesday. I don't know how that's been
Ms. Strong: Dr. Formuzis, the economist?
Mr. Panish: And Dr. Brown.
Ms. Strong: By video.
Mr. Panish: That's at least a half a day. It depends on if Mr. Erk finishes. Who else? If Mr. Erk finishes
tomorrow, which doesn't seem likely, then it's going to be longer. But, you know, I tried to say I was going to
try to finish by friday. I'm hoping that we do.
Judge: I think you estimated you'd finish by friday.
Mr. Panish: I did. I did. But I didn't know that -- that was my estimate. As of right now, I'll stick with that
estimate. Okay? Unless something changes, you know -- and the other thing is, which is not anyone's fault --
Judge: So be prepared on monday, then.
Mr. Panish: That's good.
Judge: Just be prepared on monday.
Mr. Panish: But we're not really technically rested because Mr. Ortega hasn't been finished.
Judge: Well, no. I think -- I think they were going to --
Mr. Panish: Mr. Putnam had extensive time and he only got in about 30 minutes. He did tell us that he had a
long time to do it, so I assume he'll come back.
Mr. Putnam: They went for three days, and I started at quarter of 4:00.
Mr. Panish: And we didn't go three days because it was a half day and another half day. That's consistent with
what they'll say, we went for three days. We didn't go for three days with Mr. Ortega.
Ms. Stebbins: Just for the record on all the scheduling stuff, your honor the 90-day estimate was 90 days, not
court days, and it was based on plaintiffs' repeated estimates that the case would take four weeks on the record
by Mr. Boyle and Ms. Chang. I understand that things happen, but I am concerned about the
August and september schedule because there are so many breaks in it. It might actually be difficult to finish,
and I'm wondering if there's any wiggle room on any of those days, whether, you know, any of the jurors could
be asked -- I don't know what their conflicts are.
Mr. Panish: Your honor, the jury room was told, pursuant to counsels' statement extensively -- and if you look
at the sheet when the jurors were called up, the number of court days that it said on the sheet was 90 court days.
Not 90 days. And I had this discussion with you as to when 90 court days is. That's what the defendants
represented, and we're only not even halfway there. And if you pull out the jury sheet --
Judge: I think it was 45 days, we're on day 45; something like that.
Ms. Strong: We never represented 90 court days.
Mr. Panish: It says that, what the jury commissioner was told when the jurors came up, that they wouldn't
agree to time qualifying, which took an additional three weeks because the defendants refused to agree to the
commissioner time qualifying. It says 90 days.
Ms. Strong: Your honor, at the time of jury selection, you may recall we talked about and you were going to
inform the jury to expect two months, and I said it might be best to do three months just to be safe. That was our
position, your honor. It was going to be a two- to three-month trial based on a representation from plaintiffs
they were going to take three to four weeks, and we always said six weeks for our case. And he repeatedly
states that defendants have represented it was a 90-court-day trial, and that just isn't true, your honor.
Mr. Panish: I'll bring the transcript out.
Judge: Whatever the situation was, what we have to do is deal with what we have. Whatever who said what,
we've got to deal with the situation.
Mr. Putnam: I agree, your honor.
Judge: And the situation is you're concerned about the number of days.
Ms. Stebbins: In september, your honor, there are three weeks where we are here only two days. I mean, the
first week of september, we're here, according to this calendar the 3rd and 4th; the second week, the 11th, the
12th; and the third week --
Judge: How many of those are juror days, how many of those days --
Ms. Stebbins: It looks like three are plaintiffs -- two are plaintiffs and six are jurors in that period.
Mr. Panish: What are we going to do?
Judge: You have six jurors days. Part of the problem is the jurors, at least in the trial, have been asking for
time, and I've been giving it to them.
Ms. Stebbins: It's just a greater number than there had been heretofore. I'm only asking is there any wiggle
room, are there any juror commitments that are not sacrosanct, you know.
Judge: We can ask them, see what they say. But you get into the late august, early september, you're talking
about kids going back to school, you're talking about a lot of different things happening in early september or
mid september, so -- plus their expectation was -- I'm sure that they're putting off everything they had to do until
september thinking that we'll be done, and now those things are coming up, so it's just the nature of the beast.
Mr. Boyle: Your honor, just for --
Judge: I will try to talk to them about whether things can be rearranged, I can have my staff try to talk to them.
Mr. Boyle: Just do quell any confusion, on page 7 of the transcript, the first day of time qualification, the court
says, quote, the time estimate for trial is 90 court days, period. This is an estimate, period. Sometimes there are
Ms. Stebbins: Your honor gave that estimate, if I recall, to be over-inclusive because we had said 90 days,
three months, and your honor said 90 court days to make sure that we didn't run into the issue. Frankly, there's a
slight outside concern that, you know, if we go all the way through september, and we have half as many court
days, then we're going to hit other juror conflicts down the line that are worse than the ones we have now. So
just raising the issue.
Judge: Maybe my staff can talk to them.
The clerk: I do know september 19th and 20th are tentative. It's not -- he's checking. But we just put it in here
just to be on the safe side.
Mr. Putnam: It's hard to go the other way.
Mr. Panish: Okay. Thank you, your honor.
The clerk: We'll talk to the jurors.
Judge: Thank you.
(Court adjourned to Tuesday, July 16, 2013)
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