SATURDAY UPDATE: As of today, Sony and NBC moved into first positions in the Hollywood auction of the live music, primetime TV special, and film rights to Michael Jackson’s rehearsal footage for sale by the ghouls at AEG (see below). Although the winners of the auction won’t be announced until next week, major studios like Viacom’s Paramount/MTV, NBC Universal, Sony Music and Sony Pictures, and News Corp’s 20th Century Fox/Fox Broadcasting Co, all have been battling for the projects. I’ve confirmed that AEG started the bidding for the movies rights at a staggering $50 million, and the TV special rights at $10 million. “They are looking to do a primetime TV special with NBC, and then go with live albums and films with Sony since Sony controls the distribution rights to [MJ’s] music,” one of my insiders told me today. “All this needs to be sorted out through the weekend as they will have to go to the judge to get any deals blessed next week.” That may explain why insiders keep telling me about the “sensitivity and confidentiality” of the ongoing negotiation process.

I’ve learned AEG’s goal is to have the primetime TV special on air in September and the film out in October. No word on when the live albums would be scheduled. (Perhaps in part because Sony Music’s ex-topper Tommy Mottola has been quoted as saying that the company has “song after song” of unreleased MJ music, maybe even more than Elvis left behind.) The reason for the Hollywood feeding frenzy over these projects is straightforward: “As you know, it will be huge,” one bidder tells me. “The footage is so moving. My fingers are crossed.”

FRIDAY 5:15PM EXCLUSIVE: AEG is right now trying to auction off to Hollywood that concert film of the Michael Jackson rehearsals for his final tour. I’m told Sony, Universal and Fox are in negotiations, but the price keeps going up and up. $50 million is where it started, I heard. As soon as executives involved in organizing Michael Jackson’s 50-night schedule of shows at London’s O2 arena learned of the performers death, they met at Staples Center in Los Angeles and secured all of the rehearsal footage which Jackson had done there, according to news reports. Randy Phillips, president and CEO of AEG Live, ghoulishly boasted to The Associated Press he had “more than 100 hours of footage that could be turned into live albums, a movie and a pay-per-view special. He was our partner in life and now he’s our partner in death.” Phillips claimed the production budget for the shows reached $25 million, which also covered 3-D “mini-movies” of Thriller and Earth Song. He also said that, aside from AEG, the Jackson estate would get the “lion’s share” of any profits from the high-def footage. (Photos of MJ’s last rehearsals.)

The recordings were reportedly “great,” with the last day on Wednesday being the “best,” and all of them “enough for a show,” NBC News reported at the time. The includes production meetings and auditions and behind-the-scenes showing Jackson and his dancers occupying several spaces in the Staples Center, and Michael going from room to room supervising the rehearsals. The Los Angeles Times and the AP also reported that the singer liked how the concert was developing.