Sony and Jackson Estate reach agreement for Sony to acquire remaining half of Sony/ATV Music Publish

[maja]

Well, at first I was shocked. :bugeyed But after understanding the circumstances, I think the estate couldn't do anything else.

It feels sad that Michael now has lost what seemed to be his most valuable possession (apart from his own songs of course), so in a way I'm glad that Sony has waited until after his death to make the deal.
I think Michael would've had to face this sooner or later anyway. And from what we know about his debts, it would have been rather sooner than later. So it's good that he didn't have to witness this anymore.

It feels strange because this was a fabulous deal at the time and Michael was proud of it, and rightly so. But things have changed and, thinking about the future and Michael's assets as a whole, it was the right thing to do rather than buying Sony's half and amounting even more debts.

I'm very very glad that the estate (and therefore Mijac Music as well) is now debt-free and safe because THAT is Michael's true and most important legacy.
Now the estate can focus on upcoming projects rather than having to deal with the past.
And it'll be interesting to see what the estate will use the money for.

So, even if it feels kind of sad, I think it was the right move and I hope we can expect great things in the future.

 

[morinen]

I'm very very glad that Mijac Music is now debt-free and safe because THAT is Michael's true and most important legacy.

Mijac Music has been debt-free since 2012.

 

[Resa]

Re: Sony buys what MJ owns of their music for 750 million.

There's something I don't understand... If they can just force the Estate to sell the catalogue, then why couldn't they force Michael? Why was Michael going around saying they would kill him for his catalogue? And why would Michael have even entered a partnership where they could just force him to sell his share whenever they wanted?

Exactly. IF Sony could have triggered a sale at anytime since 1995, why now? Why didn't Michael seem to know that? Why was Michael so concerned? This seems way off, like we aren't being told the truth. Hopefully the kids are allowed to keep Mijac, and it won't conveniently have to be sold also.

 

[maja]

Mijac Music has been debt-free since 2012.

Sorry, I should've said "the estate" (which includes Mijac music, though ). I'll correct it.

 

[HIStory]

Re: Sony buys what MJ owns of their music for 750 million.

Exactly. IF Sony could have triggered a sale at anytime since 1995, why now? Why didn't Michael seem to know that? Why was Michael so concerned? This seems way off, like we aren't being told the truth. Hopefully the kids are allowed to keep Mijac, and it won't conveniently have to be sold also.

Selling Mijac would be the last straw. There would be no excuse for that.

 

[maja]

After this 750 million dollar deal, Mijac is in no way in danger. On the contrary, the estate can focus on the future now.

 

[8701girl]

Re: Sony buys what MJ owns of their music for 750 million.

Selling Mijac would be the last straw. There would be no excuse for that.

Yep ill be officially done if that happens

 

[maja]

Why should they sell it? There's absolutely no reason whatsoever for them to do so.
Mijac is the basis for everything they're working on. It's the core of Michael's legacy.

 

[Bubs]

Re: Sony buys what MJ owns of their music for 750 million.

On another note, 42 million dollar investment just sold for 750 million-that's quite the profit.

Very proud of Michael and that acquisition. Then and now.

Don't forget when he sold half of it to Sony, he got $115 million.

 

[Bubs]

Sony to Buy Out Michael Jackson Estate for Music-Publishing Unit

Memorandum of understanding calls for payments of $750 million

By HANNAH KARP
Updated March 14, 2016 10:17 p.m. ET

Seven years after his death, the King of Pop is ceding much of his publishing empire.

Sony Corp. has reached an agreement with the estate of pop star Michael Jackson under which the electronics and entertainment giant is to obtain ownership of Sony/ATV Music Publishing LLC—the world’s biggest music-publishing company—by purchasing the estate’s 50% stake.

A memorandum of understanding calls for payments of $750 million, including a lump-sum payment of about $733 million by Sony, according to an announcement.

The parties said they expect a definitive agreement by March 31.

Sony/ATV is co-owned by Sony and the estate. Sony and Mr. Jackson—and since his 2009 death, his estate—have jointly owned the company since 1995.

The Wall Street Journal reported in October that Sony and the estate were in talks on the future ownership of the venture, after Sony triggered a clause in their partnership agreement that allowed either party to buy out the other. That move came as a surprise to the estate, which had guessed that Sony wanted to sell its share, and lined up two partners to help it finance a buyout, according to a person familiar with the matter. A potential sale had been mentioned in emails among top Sony executives in November of 2014, which were among those posted online by hackers.

But in recent months Sony made it clear that it actually wanted to buy the other half of the music publisher, offering the estate a better deal than it had expected to receive, this person said. According to their deal, Sony had an option to buy half of Mr. Jackson’s share of the joint venture at a steep discount. But Sony didn’t exercise that option to the extent it could have, this person added.

The deal eliminates the estate’s remaining $250 million in debt and allows the estate to diversify its assets beyond the music industry, which is in upheaval as CD and download sales decline, and streaming grows. The sale also gives each of Mr. Jackson’s children more financial flexibility, preventing potential squabbles on what they might do with their shared asset, according the person familiar with the matter.

Sony/ATV’s catalog includes the copyrights to most of the Beatles’ songs, as well as songs by stars including Marvin Gaye, the Rolling Stones and Taylor Swift. Unlike record labels, which own and distribute sound recordings, music publishers own rights to lyrics and melodies and license them out for various uses—including recordings released by record labels.

Mr. Jackson’s estate said the transaction won’t affect its “substantial interests in other music assets,” including all of Mr. Jackson’s master recordings and Mijac Music, the publishing company that owns all of the songs he wrote and certain other songs he acquired. Those include “Great Balls of Fire,” written by Otis Blackwell and Jack Hammer and most famously performed by Jerry Lee Lewis, and “After Midnight” by J.J. Cale and made popular by Eric Clapton.

The estate will also retain its interest in EMI Music Publishing. In 2012, Sony and the estate joined investors including Abu Dhabi’s Mubadala Development Co. and music mogul David Geffen to buy EMI Music Publishing for $2.2 billion.

http://www.wsj.com/articles/sony-to...n-estate-for-music-publishing-unit-1458000239

The bolded bit, I don't know who is this person but that doesn't make any sense in business wise for Sony?
It read like Sony could have gotten MJ's share cheaper, but they decided to pay more, and thats what I call bs.
Sony is business and they are supposed to make money not lose it?

 

[elusive moonwalker]

Id be lieing if i said i wasnt totally gutted by this. What i dont understand it why such a clause was agreed apon in 95. Is it normal because it sounds illogical to make such an agreement where one side can just buy out the other regardless.

I guess now they have money to pay the IRS bill which coincidently is ,if the IRS gets its way near enough 750 mill.seems like they are Back to square one. All that for nothing. Such a shame just another nail.

 

[Ms. BlueGangsta]

Re: Sony buys what MJ owns of their music for 750 million.

Selling Mijac would be the last straw. There would be no excuse for that.

I wouldn't put it past them tbh.

 

[HIStoric]

I wouldn't put it past them tbh.

*sigh* they're not going to sell Michael's masters and they have no intention of doing so, they literally state so in their press statement:

The Estate also continues to own its 100% interest in all of Michael’s solo master recordings and short films. There is no intention of selling any of these wholly-owned assets.

 

[elusive moonwalker]

Depends on what happens with the IRS lawsuit

 

[Soundmind]

Re: Sony buys what MJ owns of their music for 750 million.

Because Mclain won't live forever and wants as much as he can get now. What other grand project could the estate get involved in that would have brought the executors the kind of money they will get now in their capacity as executors? This is in the very best interests of the executors not miss . And now they are talking about paying back lonans . Who in his right mind sell a billion dollar asset to pay loans that were already being paid by the asset's revenue. Paying loans and taxes that means we are talking about a couple of hundreds millions left. They have effectually destroyed everything MHz has worked for an probably died because.

 

[elusive moonwalker]

They had no choice soundmind.sony exercised their buy out clause thats the bottom line of it

 

[Ms. BlueGangsta]

Re: Sony buys what MJ owns of their music for 750 million.

*sigh* they're not going to sell Michael's masters and they have no intention of doing so, they literally state so in their press statement:

Wasn't it said that MJ's 50% of Sony wouldn't be sold?
I know that Sony was pretty much waiting to pull the lever and buy MJ's half, but still....

 

[Justthefacts]

Id be lieing if i said i wasnt totally gutted by this. What i dont understand it why such a clause was agreed apon in 95. Is it normal because it sounds illogical to make such an agreement where one side can just buy out the other regardless.

I guess now they have money to pay the IRS bill which coincidently is ,if the IRS gets its way near enough 750 mill.seems like they are Back to square one. All that for nothing. Such a shame just another nail.

I believe clauses like that is to make sure no one other then your business partner as say over who gets to buy the other half. The IRS is not going to get seven hundred and fifty million dollars out of the estate that is a silly number even the IRS knows it hence the settlement talk. If Sony triggered the deal what could the estate do? Nothing

 

[Justthefacts]

Re: Sony buys what MJ owns of their music for 750 million.

Wasn't it said that MJ's 50% of Sony wouldn't be sold?
I know that Sony was pretty much waiting to pull the lever and buy MJ's half, but still....

Be practical the debt against MiJac is paid off that catalog is debt free why sell it?

 

[mjjmsc]

The profit was quite good, nobody is questioning the business deal, but Michael tried very hard to keep this catalog, so this is a very cruel decision!!! The Estate should not only represent the business interests, but also continue Michael legacy and way of thinking and this is shameful :-(

 

[Justthefacts]

The profit was quite good, nobody is questioning the business deal, but Michael tried very hard to keep this catalog, so this is a very cruel decision!!! The Estate should not only represent the business interests, but also continue Michael legacy and way of thinking and this is shameful :-(

Continue Michael's way of thinking? First of all if Sony would used this clause when Michal was alive he would not have had a choice but to sell to Sony. And Michael's way of thinking is what got him in so much debt.

 

[maja]

Continue Michael's way of thinking? First of all if Sony would used this clause when Michal was alive he would not have had a choice but to sell to Sony. And Michael's way of thinking is what got him in so much debt.

This fact might be hard to accept but I agree. If Michael were still alive, he would have had to sell as well, sooner or later. You can't blame the estate when Sony had the absolute right to buy, and you can't blame the estate for the debts Michael made during his lifetime. It is sad that the catalog is no longer his, but the estate didn't have much choice in this matter.
As I've said before. I'm glad Sony has waited until now. During Michael's lifetime, this would've devastated him. But there's nothing that can be done about it now. So let's look to the future. It is a huge amount of money and I'm sure we, the fans, will profit from that as well, in one way or another.

 

[Ms. BlueGangsta]

Re: Sony buys what MJ owns of their music for 750 million.

Be practical the debt against MiJac is paid off that catalog is debt free why sell it?

I'm not saying it will or won't happen.
Never say never though.

 

[innuendo141]

The profit was quite good, nobody is questioning the business deal, but Michael tried very hard to keep this catalog, so this is a very cruel decision!!! The Estate should not only represent the business interests, but also continue Michael legacy and way of thinking and this is shameful :-(

While it may seem like "good business", I cant help but feel that they are after killing another part of the story of Michael Jackson, one that he was actually quite well known for and proud of.

With regards to the part I have selected in bold, we are right to question the motives behind everything the Estate have done since Michael's death.

Today feel's like a real end of an era to me, don't know about anyone else.

BTW, the Estate love giving essays when explaining themselves don't they? Where's our essay about what happened with the Michael album?

 

[elusive moonwalker]

I believe clauses like that is to make sure no one other then your business partner as say over who gets to buy the other half. The IRS is not going to get seven hundred and fifty million dollars out of the estate that is a silly number even the IRS knows it hence the settlement talk. If Sony triggered the deal what could the estate do? Nothing

Totally agree interms of a clause of first refusal but this was anything but that. I guess id just like to know how normal such an agreement this was or was it another case of mj being screwed over yet again by terrible advice .

 

[HIStoric]

They had no choice soundmind.sony exercised their buy out clause thats the bottom line of it

Exactly. There's no way they'd sell the publishing rights to some of the best-selling artists in the world if they didn't have to. I mean, they weren't even the ones who enacted the clause.

Wasn't it said that MJ's 50% of Sony wouldn't be sold?
I know that Sony was pretty much waiting to pull the lever and buy MJ's half, but still....

Mmmm nope. Only way it wouldn't be sold is if the Estate were able to raise $750 million to buy Sony's half I imagine (please feel free to correct me if I'm wrong someone).

While it may seem like "good business", I cant help but feel that they are after killing another part of the story of Michael Jackson, one that he was actually quite well known for and proud of.

I get what you're saying, but what exactly could they do?

 

[Soundmind]

Nope I do not believe that at all. We all know there was a period in 2006 when Sony could have bought Mjs share as part of the deal to restructure this loans but at the time they did not exercise that right. If they had the right always to buy his share there would not be a need for such condition in the restructioning deal. By the way the same poster who is talking now about the estate being forced to do so by that clause, went on the offensive when the news first broke months ago to explain how it was not really either party being forced to sell or buy. Next is a settlement With wade and James because "let's be realistic they don't have a choice"

 

[innuendo141]

I get what you're saying, but what exactly could they do?

I genuinely don't know. I just feel disappointed but at the same time I don't fully know all the details. I'm not a fan of a lot of what the Estate have done so I just immediately assume the worst when it comes to them. But at the same time, I will admit that I don't know what to make of the whole thing.

 

[Justthefacts]

Believe what you want to believe

 

[Bubs]

I.B. BAD BREAKS DOWN THE BUY/SELL ON SONY/ATV (UPDATE)
On Monday (3/14), Sony Corp. exercised the buy/sell on Marty Bandier’s Sony/ATV, acquiring full ownership of the world’s largest music publisher for $750m. Sony/ATV was set up as a joint venture, with Sony and the Michael Jackson Estate each owning 50%. Estate attorney Joel Katz and co-executor John Branca were believed to have amassed a sizable war chest with the aim of buying Sony/ATV themselves, but Sony has come out on top, while the Estate is getting an enormous consolation prize.

The Estate retains its stake in EMI Music Publishing, which was acquired in 2012 by a consortium comprising Sony, the Estate, Mubadala Development Co., Jynwel Capital Ltd., the Blackstone Group’s GSO Capital Partners LP and David Geffen. The price tag was $2.2b, or just under eight times EMP’s net publisher share (NPS), which was then in the $300m range. The Sony/Jackson Estate’s piece of EMP is about 40%, with Sony owning three-quarters of that total. Sony/ATV had an approximate valuation of $1.5b in 2015, and its stake in EMI Music Publishing was valued at $860m at the time of the acquisition. But the acquisition impacts only Sony/ATV proper, not ithe ownership of EMP.

Sony/ATV has annual revenues north of $600m a year. Although mechanical royalties have been hit hard by the decline in sales, it’s hoped that the advent of mass-market streaming will offset this revenue loss.

Jackson was days away from filing for bankruptcy in 2006 when Sony chief Howard Stringer and CFO Robert Wiesenthal bailed him out. In return, Sony took greater operational control of Sony/ATV and received an option to buy half of Jackson’s share. The loan, estimated at $280 million, was connected to the Sony/ATV catalog and secured by Barclays. The interest rate was negotiated down to 2.9% from 5.8% shortly after the Jackson’s death in July 2009. At that point, he was roughly half a billion dollars in debt.

That 10-year-old loan impactied the current buy/sell situation in that its terms provided Sony with a discount of around $150m on the purchase price.

In November 2012, a representative of the Jackson Estate confirmed to Forbes that the estate had just paying off a loan connected to MiJac Music. That payment meant that the estate had eliminated the last of Jackson’s outstanding personal debts, thanks to Jackson’s considerable posthumous earning power resulting from This Is It, the highest-grossing concert film in history; a $250 million record deal with Sony, the largest ever; and the Michael Jackson Immortal World Tour—a joint venture with Cirque du Soleil.

In 2014, for what it’s worth (and it’s worth a great deal in this case), the Jackson Estate was valued at $1.18 billion. The second most valuable estate is that of Elvis Presley, which has a reported net worth of $300m.

http://hitsdailydouble.com/news&id=300204

I'm not sure whether that article is reliable but Sony getting 150 million discount price when they buy MJ's share sounds a bit odd, or terms agreed in 2006 weren't very beneficial to Michael!