Michael Jackson earned more than any entertainer dead or alive in the first five years after his untimely passing. When the total soared past $1 billion last year, it seemed an incomparable milestone–at least until today, when Jackson’s estate announced the sale of the King of Pop’s half of the Sony /ATV catalogue to Sony for $750 million.
“When Sony first partnered with Michael Jackson 21 years ago to create Sony/ATV Music Publishing, we knew that this company had the ability to reach great heights,” said Michael Lynton, CEO of Sony Entertainment, in a statement. “This acquisition will enable Sony to more quickly adapt to changes in the music publishing business.”
The deal is also represents cold, hard confirmation of Jackson’s own little-known business savvy. He purchased ATV, home to many of the Beatles’ best publishing copyrights, in 1985 for $47.5 million–despite objections from many on his own team who thought he was impetuously overpaying. But Jackson had learned well by watching his Motown mentor Berry Gordy accumulate a valuable catalogue of his own over the years.
“He got the bug,” Gordy told me in an interview for my book, Michael Jackson, Inc. “And that gave him the [urge] to want to do something even greater.”
Jackson realized a massive profit on his investment in the mid-1990s when he merged his catalogue with Sony’s in exchange for $115 million–and a 50% stake in the newly-formed joint venture, Sony/ATV. As part of the deal, Sony was not permitted to enter the publishing business in any other capacity, enabling Jackson to profit equally from new copyrights they acquired for acts ranging from Eminem to Taylor Swift.
When Jackson died in 2009 amid the financial tumult of the Great Recession, some whispered that his estate might be forced to sell its half to pay off the King of Pop’s half-billion dollar debt. But executors John Branca and John McClain quickly struck deals for movie rights and new music, putting the singer on a path to earn over $100 million every calendar year since his death.
In life, Jackson sometimes spoke of his intent to leave his share of Sony/ATV to his children, and his estate had expressed an interest in buying Sony’s half of the catalogue when a clause enabling one side to buy out the other was triggered last year. But in the end, such a deal would have required bringing on another partner, likely diluting the estate down to a non-controlling stake in the company.
“This transaction further allows us to continue our efforts of maximizing the value of Michael’s Estate for the benefit of his children,” said Branca and McClain in a statement. “It also further validates Michael’s foresight and genius in investing in music publishing.”
Jackson’s children will still be able to enjoy the fruits of their father’s foresight–after taxes and acquisition debts associated with the catalogue are paid off, there should still be hundreds of millions of dollars awaiting them when they are old enough to gain full access to their trusts.
The estate still retains control of Mijac Music, which contains Jackson’s own publishing rights, as well as its stake in a chunk of recently-acquired EMI publishing rights. That, along with the Jackson-themed Cirque du Soleil show One in Las Vegas and further releases of new music, should keep Jackson atop our list of highest-paid dead celebrities.
The deal, which places an enterprise value in the neighborhood of $2 billion on Sony/ATV, is still subject to regulatory approval, and it could be some time before it closes. When it does, Michael Jackson will have had the ultimate last laugh on those who discouraged and disparaged him so many years ago–with the King of Pop ultimately selling his half of Sony/ATV for 15 times what he paid for the original catalogue, on top of the untold fortune in publishing income during the intervening decades.
As he told Sony/ATV chief Marty Bandeier in 2007: “I told you I knew the music publishing business.”
SOURCE: FORBES
i knew this gonna happen and now all mjfam is scream crazy about that. So sorry for my fam, but in my opinion its a relief. That catalog bring so much pain for Michael… But i still believe that one day his name will take back all this things… Wait for it! He’s a businessman and a magic man too… (;