"even in the afterlife..Mike is still haunting them suit and tie types"
Sony, Michael Jackson Estate in Talks for Transfer of Massive Catalog
Tech giant will "either become 100 percent owner or divest," says one source
Sony and Michael Jackson's estate are in talks for a massive transfer of the catalog to one of the parties Kevin Mazur/WireImage/Getty
Are the Jackson kids going to be a billion dollars richer this New Year?
The estate of the late Michael Jackson co-owns the world’s biggest music publisher, Sony/ATV, which spins off around $100 million in profit each year under the aegis of its popular chief executive, Martin Bandier.
The asset is being evaluated by its two owners to figure out who buys out whom.
Sony Corp. has hired investment bank Allen & Co. to work on valuing its portion of the lucrative asset. The Japan-headquartered consumer-electronics giant recently triggered an option to acquire the 50 percent stake owned by Jacko’s estate.
But Sony isn’t the only one coming up with a valuation. Jackson’s estate, repped by music lawyer John Branca, is also said to be talking about finding backers to buy out Sony. Most estimates put the Sony/ATV asset at around $2 billion to $2.5 billion.
The difficult challenge facing Branca is persuading the Jackson kids (Paris, Prince and Blanket) to forgo the giant check and double down and allow him to oversee the acquisition of the entire company with fresh backers.
Sources tell On the Money that probate courts would likely have to OK any decisions made on behalf of Jackson’s estate.
As if things couldn’t get more complicated, there’s the side issue of the EMI catalog, which is owned separately but managed by Sony/ATV. A change of control might trigger an exit for the owners of the catalog, who potentially could move somewhere else.
Sony ATV, the famous music-publishing catalog that Michael Jackson bought in 1985 and used for decades as a financial lifeline, will soon be sold in full to the late singer's estate — or the estate may sell its own half back to Sony Corp. The technology giant will "either become 100 percent owner or divest," a source close to the deal tells Rolling Stone, adding that Sony reps will soon meet with Jackson's estate reps to work out the terms. The company has begun what is known as a "buy-sell process," with one source saying that "this is just the first step" for the company.
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The catalog, which owns publishing rights for 750,000 songs, including tracks by the Beatles, Taylor Swift, the Rolling Stones, Marvin Gaye and many others, is worth an estimated $2 billion. It has been a 50-50 venture between Sony and Jackson since 1995, when the King of Pop agreed to merge his share with Sony's music-publishing catalog. In 2007, an auditor said Jackson's half of the catalog was worth $390 million — providing crucial assets for the big-spending superstar during a period when he was releasing almost no new music or making money off concert tours.
Reps for Jackson's estate declined to comment.
Jackson had been deeply in debt in 2006 when he agreed to give Sony an option to buy his half of the catalog at some later date. Sony exercised that option sometime last month. "The structure of a joint venture is sometimes difficult to manage," the source says.
Company reps would not comment, but leaked Sony documents last year suggest execs were dubious of its potential in a time of low digital-music revenues. Kenichro Yoshida, Sony's chief financial officer, said in a statement last year that Sony ATV "has a rather complex capital and governance structure and is impacted by the market shift to streaming."
The Beatles lost control of much of their publishing in the Sixties after a series of complicated business deals. When Jackson bought the catalog, for $47.5 million, Paul McCartney unsuccessfully bid against him. "The key thing to remember today is don't sell your catalogue," Marshall Gelfand, Jackson's accountant, told the Los Angeles Times at the time. "The whole explosion of music videos and the trend toward using more music in movies is going to make copyrights even more valuable. If you are an established artist today, you should only consider selling your catalogue as a last resort to raise cash
Sony, Michael Jackson Estate in Talks for Transfer of Massive Catalog
I hope the jackson estate wins it all...
