Sony Exploring Sale of Music Publishing Unit, Leaked Emails Show
Highly Profitable Unit Is Co-Owned by Sony and Michael Jackson’s Estate
By HANNAH KARP And ALEXANDRA BERZON
Dec. 23, 2014 4:17 p.m. ET
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Sony Corp. has been exploring the sale of its Sony/ATV Music Publishing unit, the company’s recently leaked internal emails suggest.
The music publisher, co-owned by Sony and the estate of the late pop star Michael Jackson , is the world’s biggest and is highly profitable, according to people familiar with the matter. Estimated to be worth between $1.5 billion and $2 billion, it owns the copyrights to most of the Beatles’ songs, among thousands of others.
It was unclear from documents reviewed by The Wall Street Journal whether Sony is considering selling just its stake in the venture, or whether the whole unit might be put up for sale. Also unclear was the price Sony expects the publishing business to fetch, or when the company might try to sell it.
Spokesmen for Sony and Sony/ATV declined to comment.
For Sony, the potential sale would represent an easy and logical way to raise cash to prop up its long-struggling electronics division, according to a person familiar with the company’s thinking. Sony posted a $1.2 billion net loss for the quarter ended Sept. 30.
The possible sale of Sony/ATV was mentioned in emails last month between top Sony executives. The emails were among the thousands of documents leaked several weeks ago by hackers trying to stop the release of the Sony Pictures film “The Interview,” a lowbrow comedy about a plot to assassinate North Korean leader Kim Jong Un. U.S. officials have blamed the cyberattack on North Korea, and President Barack Obama last week promised a “proportional response.” North Korea temporarily lost Internet connectivity Monday, though the U.S. hasn’t taken responsibility for the outage.
Following Sony’s annual “mid-range plan” meeting last month, the Tokyo-based secretary for Sony Vice President Kazuhiko Takeda sent an email to Sony Entertainment Chief Executive Michael Lynton, requesting a response to a number of “follow-up” items discussed at the meeting. A list of the discussion items appeared to have been attached to the email. Six other executives, including Sony Corp. of America Chief Financial Officer Steve Kober, were copied.
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Later that day, Mr. Kober sent a private email to Mr. Lynton, offering to take the lead on responding to Mr. Takeda but asking Mr. Lynton not to forward the first email to “anyone in your organization,” because the attached list of discussion items included “a follow-up point talking about the sale of Sony/ATV.”
“As you are aware, we are trying to keep this top secret and manage this among a very small group,” Mr. Kober wrote in his email.
Sony Corp. of America President Nicole Seligman also emailed Mr. Lynton that day warning him not to forward the note from Mr. Takeda’s secretary.
The email “mentions the ATV issue,” Ms. Seligman wrote. “We have asked that it be deleted going forward.”
Mr. Jackson, the late pop star, bought ATV Music Publishing for $47.5 million in 1985, and sold Sony a 50% stake in the business for $90 million 10 years later, creating the joint-venture. He died in 2009 while preparing for a comeback tour.
In 2012, Sony and Mr. Jackson’s estate joined with other investors, including Abu-Dhabi’s Mubadala Development Co. and music mogul David Geffen, to acquire EMI Music Publishing for $2.2 billion. Sony/ATV Music now administers the EMI catalog on the investor group’s behalf.
It was unclear from the leaked Sony emails whether EMI would be packaged with Sony/ATV in a sale.
Activist investor Daniel Loeb had been urging Sony for more than a year to sell some of its entertainment assets to focus on its electronics business. But Mr. Loeb no longer has sway: his hedge fund, Third Point, sold its 7% stake in the company in October.
http://www.wsj.com/articles/sony-ex...publishing-unit-leaked-emails-show-1419369448
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Sony Planned to Sell Music-Publishing Unit Owning Beatles
By Lucas Shaw and Christopher Palmeri Dec 23, 2014 2:33 PM ET 0 Comments Email Print
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Sony Corp. was considering the sale of its music-publishing business, including a partnership with Michael Jackson’s estate that owns the Beatles catalog, as recently as last month, e-mails released by hackers show.
The “top secret” plan was being handled in the U.S. by Sony Entertainment Chief Executive Officer Michael Lynton, Sony Corp. of America President Nicole Seligman and their U.S. Chief Financial Officer Steve Kober, according to an Nov. 21 e-mail from Kober. The company had concluded the business had few growth prospects.
Top management at Tokyo-based Sony was concerned about the complex ownership and governance of the business, whose owners also include billionaire David Geffen and Abu Dhabi investors. Details of the sale plan, including possible terms or suitors, couldn’t be determined. The documents were released as part of the cyber-attack on Sony over the movie “The Interview.” Publishing accounts for 14 percent of Sony’s music revenue, the main part being recorded music.
Bob Lawson, an outside spokesman for Sony with Rubenstein Communications, didn’t have an immediate comment.
Sony Corp. (6758)’s Chief Financial Officer Kenichiro Yoshida raised questions about the future of music publishing, in an Oct. 3 e-mail to his boss, CEO Kazuo Hirai, and Lynton, a prelude to a meeting of the three, according to messages released by the hackers.
“I’d like to hear your thoughts on the Music Publishing business, which has a rather complex capital and governance structure and is impacted by the market shift to streaming,” Yoshida wrote in the message.
Sony Deliberations
Sony’s deliberations on the publishing business were included in a planning document sent to at least half a dozen Sony executives, according to the Nov. 21 e-mail. That included a presentation that outlined they were considering the sale.
“We are very surprised that the attached listing includes the comment about the sale of Sony/ATV,” Kober wrote. “As you know quite well, this is a top-secret project that is being handled by me working directly with Michael and Nicole.”
The publishing division includes Sony/ATV Music Publishing and EMI Music Publishing.
Sony/ATV was established in 1995 as a joint venture between Sony and Jackson, who had acquired ATV 10 years earlier. Former Beatle Paul McCartney had also tried to purchase the catalog.
In 2012, Sony paid $2.2 billion for the larger EMI Music Publishing, along with investors including Jackson’s estate, Blackstone Group’s GSO Capital Partners LP, Geffen and Mubadala Development Co. owned by the Abu Dhabi government. Sony/ATV administers EMI on behalf of the investors.
Music Royalties
Music publishers collect royalties from album sales, use on TV and other performances. The combined Sony publishing business represents stars from Bruce Springsteen to Lady Gaga and more than 2 million songs, including “New York, New York,” “Jailhouse Rock” and “I Heard It Through the Grapevine.”
The Japanese company and Jackson’s estate each own half of Sony/ATV, which owns more than 750,000 songs, according to a press release from 2012. EMI Music Publishing, in which Sony holds a 30 percent stake, has 1.3 million songs in its catalog.
Together, Sony/ATV and EMI represent the world’s biggest music publishing business, with Sony estimating a global market share of more than 30 percent.
The music publishing business generates about $500 million in annual revenue and $100 million in operating profit, according to a mid-range plan of Sony’s music business in October that was released by the hackers.
Publishing Growth
Sony’s music publishing business will see sales rise 13 percent over three years to $617 million by fiscal year 2018, according to the mid-range plan circulated internally. Operating profit will rise 23 percent to $123 million during that period.
The e-mails were released as part of a devastating hack on Sony that the FBI said was committed by North Korea over the Hollywood studio’s plan to release the satirical movie “The Interview” about an assassination plot against the nation’s leader, Kim Jong Un.
http://www.bloomberg.com/news/2014-...ell-music-publishing-unit-owning-beatles.html
Highly Profitable Unit Is Co-Owned by Sony and Michael Jackson’s Estate
By HANNAH KARP And ALEXANDRA BERZON
Dec. 23, 2014 4:17 p.m. ET
0 COMMENTS
Sony Corp. has been exploring the sale of its Sony/ATV Music Publishing unit, the company’s recently leaked internal emails suggest.
The music publisher, co-owned by Sony and the estate of the late pop star Michael Jackson , is the world’s biggest and is highly profitable, according to people familiar with the matter. Estimated to be worth between $1.5 billion and $2 billion, it owns the copyrights to most of the Beatles’ songs, among thousands of others.
It was unclear from documents reviewed by The Wall Street Journal whether Sony is considering selling just its stake in the venture, or whether the whole unit might be put up for sale. Also unclear was the price Sony expects the publishing business to fetch, or when the company might try to sell it.
Spokesmen for Sony and Sony/ATV declined to comment.
For Sony, the potential sale would represent an easy and logical way to raise cash to prop up its long-struggling electronics division, according to a person familiar with the company’s thinking. Sony posted a $1.2 billion net loss for the quarter ended Sept. 30.
The possible sale of Sony/ATV was mentioned in emails last month between top Sony executives. The emails were among the thousands of documents leaked several weeks ago by hackers trying to stop the release of the Sony Pictures film “The Interview,” a lowbrow comedy about a plot to assassinate North Korean leader Kim Jong Un. U.S. officials have blamed the cyberattack on North Korea, and President Barack Obama last week promised a “proportional response.” North Korea temporarily lost Internet connectivity Monday, though the U.S. hasn’t taken responsibility for the outage.
Following Sony’s annual “mid-range plan” meeting last month, the Tokyo-based secretary for Sony Vice President Kazuhiko Takeda sent an email to Sony Entertainment Chief Executive Michael Lynton, requesting a response to a number of “follow-up” items discussed at the meeting. A list of the discussion items appeared to have been attached to the email. Six other executives, including Sony Corp. of America Chief Financial Officer Steve Kober, were copied.
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Later that day, Mr. Kober sent a private email to Mr. Lynton, offering to take the lead on responding to Mr. Takeda but asking Mr. Lynton not to forward the first email to “anyone in your organization,” because the attached list of discussion items included “a follow-up point talking about the sale of Sony/ATV.”
“As you are aware, we are trying to keep this top secret and manage this among a very small group,” Mr. Kober wrote in his email.
Sony Corp. of America President Nicole Seligman also emailed Mr. Lynton that day warning him not to forward the note from Mr. Takeda’s secretary.
The email “mentions the ATV issue,” Ms. Seligman wrote. “We have asked that it be deleted going forward.”
Mr. Jackson, the late pop star, bought ATV Music Publishing for $47.5 million in 1985, and sold Sony a 50% stake in the business for $90 million 10 years later, creating the joint-venture. He died in 2009 while preparing for a comeback tour.
In 2012, Sony and Mr. Jackson’s estate joined with other investors, including Abu-Dhabi’s Mubadala Development Co. and music mogul David Geffen, to acquire EMI Music Publishing for $2.2 billion. Sony/ATV Music now administers the EMI catalog on the investor group’s behalf.
It was unclear from the leaked Sony emails whether EMI would be packaged with Sony/ATV in a sale.
Activist investor Daniel Loeb had been urging Sony for more than a year to sell some of its entertainment assets to focus on its electronics business. But Mr. Loeb no longer has sway: his hedge fund, Third Point, sold its 7% stake in the company in October.
http://www.wsj.com/articles/sony-ex...publishing-unit-leaked-emails-show-1419369448
--------------------------------------------------------------------------------
Sony Planned to Sell Music-Publishing Unit Owning Beatles
By Lucas Shaw and Christopher Palmeri Dec 23, 2014 2:33 PM ET 0 Comments Email Print
Google+
Save
Sony Corp. was considering the sale of its music-publishing business, including a partnership with Michael Jackson’s estate that owns the Beatles catalog, as recently as last month, e-mails released by hackers show.
The “top secret” plan was being handled in the U.S. by Sony Entertainment Chief Executive Officer Michael Lynton, Sony Corp. of America President Nicole Seligman and their U.S. Chief Financial Officer Steve Kober, according to an Nov. 21 e-mail from Kober. The company had concluded the business had few growth prospects.
Top management at Tokyo-based Sony was concerned about the complex ownership and governance of the business, whose owners also include billionaire David Geffen and Abu Dhabi investors. Details of the sale plan, including possible terms or suitors, couldn’t be determined. The documents were released as part of the cyber-attack on Sony over the movie “The Interview.” Publishing accounts for 14 percent of Sony’s music revenue, the main part being recorded music.
Bob Lawson, an outside spokesman for Sony with Rubenstein Communications, didn’t have an immediate comment.
Sony Corp. (6758)’s Chief Financial Officer Kenichiro Yoshida raised questions about the future of music publishing, in an Oct. 3 e-mail to his boss, CEO Kazuo Hirai, and Lynton, a prelude to a meeting of the three, according to messages released by the hackers.
“I’d like to hear your thoughts on the Music Publishing business, which has a rather complex capital and governance structure and is impacted by the market shift to streaming,” Yoshida wrote in the message.
Sony Deliberations
Sony’s deliberations on the publishing business were included in a planning document sent to at least half a dozen Sony executives, according to the Nov. 21 e-mail. That included a presentation that outlined they were considering the sale.
“We are very surprised that the attached listing includes the comment about the sale of Sony/ATV,” Kober wrote. “As you know quite well, this is a top-secret project that is being handled by me working directly with Michael and Nicole.”
The publishing division includes Sony/ATV Music Publishing and EMI Music Publishing.
Sony/ATV was established in 1995 as a joint venture between Sony and Jackson, who had acquired ATV 10 years earlier. Former Beatle Paul McCartney had also tried to purchase the catalog.
In 2012, Sony paid $2.2 billion for the larger EMI Music Publishing, along with investors including Jackson’s estate, Blackstone Group’s GSO Capital Partners LP, Geffen and Mubadala Development Co. owned by the Abu Dhabi government. Sony/ATV administers EMI on behalf of the investors.
Music Royalties
Music publishers collect royalties from album sales, use on TV and other performances. The combined Sony publishing business represents stars from Bruce Springsteen to Lady Gaga and more than 2 million songs, including “New York, New York,” “Jailhouse Rock” and “I Heard It Through the Grapevine.”
The Japanese company and Jackson’s estate each own half of Sony/ATV, which owns more than 750,000 songs, according to a press release from 2012. EMI Music Publishing, in which Sony holds a 30 percent stake, has 1.3 million songs in its catalog.
Together, Sony/ATV and EMI represent the world’s biggest music publishing business, with Sony estimating a global market share of more than 30 percent.
The music publishing business generates about $500 million in annual revenue and $100 million in operating profit, according to a mid-range plan of Sony’s music business in October that was released by the hackers.
Publishing Growth
Sony’s music publishing business will see sales rise 13 percent over three years to $617 million by fiscal year 2018, according to the mid-range plan circulated internally. Operating profit will rise 23 percent to $123 million during that period.
The e-mails were released as part of a devastating hack on Sony that the FBI said was committed by North Korea over the Hollywood studio’s plan to release the satirical movie “The Interview” about an assassination plot against the nation’s leader, Kim Jong Un.
http://www.bloomberg.com/news/2014-...ell-music-publishing-unit-owning-beatles.html