Sony Exploring Sale of Music Publishing Unit, Leaked Emails Show

[Tygger]

The Estate could not afford such a bid.

I believe if Sony decides to sell, the MJ Estate will sell their share along with Sony.

The Estate will not sit idly by and watch Sony sell its share. The Estate would then have to deal with a new owner(s)/partner(s) who may want to restructure (and/or accelerate) the debt repayment schedule already in place and agreed upon by Sony who is their business partner in other areas as well.

 

[ivy]

I thought by law the catalogue was going back to Paul and Yoko in a few years anyway. Why would he buy it? This sounds kinda like speculation.

I think he'll be starting to get the rights in 2018. But the catalog is no longer only Beatles songs. If he's interested in music publishing in general who knows.

The Estate would then have to deal with a new owner(s)/partner(s) who may want to restructure (and/or accelerate) the debt repayment schedule already in place

The loan was from Fortress not Sony. So I personally fail to see how Sony and/or new owner can have such a say on a loan deal between MJ/Estate and Fortress.

note: sony had first refusal and option to buy 50% of MJ's share if he defaulted. Those would transfer to the new owner.

 

[Tygger]

The loan was from Fortress not Sony. So I personally fail to see how Sony and/or new owner can have such a say on a loan deal between MJ/Estate and Fortress.

?????

 

[ivy]

?????

you said "a new owner(s)/partner(s) who may want to restructure (and/or accelerate) the debt repayment schedule already in place"

I said "I personally don't think such thing is possible".

First of the the debt/loan is from Fortress Investment Group not Sony. This means debt contract/ payment schedule should be between Fortress and MJ and not Sony or any new owner/partner.

Secondly loans and debt repayment schedule is a written contract that parties already agreed upon and signed. I don't think terms of such contract can be changed. In other words let's say Estate took a 10 year loan, it's a 10 year loan. Even the loan has changed hands it won't suddenly become a 5 year loan. The terms will stay the same. Best example for this would be lenders regularly sell home mortgages to other companies. Loan contract terms never change.

ps: sorry it's late, probably my initial post was pretty vague.

 

[HIStoric]

Paul McCartney facing tough competition for bid of Beatles' songs


Sunday, 4 January 2015 - 1:16pm IST


Sir Paul McCartney, who is planning to bid for rights of 251 Beatles songs written by him and John Lennon, is reportedly facing a tough competition for his bid.

Really hoping Paul wins it in all honesty. He could probably get extra money from Yoko, Ringo, The Estate of George Harrison and a few other places. Personally I'd prefer the rights to be spread over Paul, Ringo, Yoko and Olivia Harrison but one of them owning it is better than none.

 

[Tygger]

Ivy, I will simply disagree with you that “contract terms never change” and/or “loan contract terms never change” because they do and sometimes, based on interesting triggers.

I forgot it was Fortress and not Sony but, no matter. Fortress is most likely interested in what Sony will do and it will be interesting to see what their response will be to the sale provided it happens.

Adding: Sony is the Estate's business partner in other areas as well so, I believe if Sony sells, the Estate will follow suit with their half.

 

[mjjmsc]

MJ Estate has a contract for that loan so the terms are clear and shouldn't change...Let's think like this, you have a loan to a bank, that bank is taken over another one, you will still need to pay your loan with the agreed terms...And anyway the Estate is trying their best to pay that loan...Maybe the new owner will have better interest than Sony, maybe music will be important for them...Sony was just gready in the last 15 years and made Michael crazy...

 

[elusive moonwalker]

I think he'll be starting to get the rights in 2018. But the catalog is no longer only Beatles songs. If he's interested in music publishing in general who knows.
----------------

can u explain thus please ivy.sony/atv will lose all publishing rights??

 

[Bonnie Blue]

http://www.dnaindia.com/entertainme...-competition-for-bid-of-beatles-songs-2049474





Paul McCartney facing tough competition for bid of Beatles' songs


Sunday, 4 January 2015 - 1:16pm IST


Sir Paul McCartney, who is planning to bid for rights of 251 Beatles songs written by him and John Lennon, is reportedly facing a tough competition for his bid.

Lol, the media totally buy into this notion that macca is so desperate to get his songs back and just ignore the fact that he had opportunities and 'first refusal' in the past and never fought for them, but was just content to whine about having to pay royalties to others.

Seems a bit odd that sony is wanting to sell sony/atv when they only invested (along with others) billions in emi just 2 years ago. Maybe their circs have changed dramatically, idk.

 

[ivy]

can u explain thus please ivy.sony/atv will lose all publishing rights??

Paul McCartney to regain Beatles back catalogue?

According to a clause of the US Copyright Act, many of McCartney's Beatles songs will be eligible to be "recaptured" in 2018, decades after they were sold to ATV Music and then Michael Jackson.

Though it does not apply in the UK, the United States' 1976 Copyright Act gives songwriters an avenue for reclaiming lost publishing rights on songs released before 1978. All they have to do is to wait 56 years – meaning that songs like Love Me Do, released in 1962, will be eligible in 2018, while later tracks like Let It Be become available in 2026.

If the songwriters die before the 56-year wait is up, as John Lennon did, their heirs may even be allowed to reclaim publishing rights at an earlier time. In Lennon's case, an agreement between rights-holders and his widow, Yoko Ono, reportedly superseded the act.

Of course, McCartney's ability to recapture his rights is by no means guaranteed. Several variables, including agreements made with Lennon, may affect the process – and the songs' current owners will not hand them over quietly. Still, major rights-holders have had victories in the past, including Jerry Siegel and Joe Schuster's reclamation of the copyright to Superman.
---

so to answer your question : not all of them and not right away. It's possible for him to regain some rights over a course of years. It's also possible that there might be some sort of agreement.

Also sony/atv is no longer just 250+ beatles songs. There are millions of songs in the catalog. Sure Beatles songs are valuable and probably bring in money but they aren't the only revenue source for the catalog.

Seems a bit odd that sony is wanting to sell sony/atv when they only invested (along with others) billions in emi just 2 years ago. Maybe their circs have changed dramatically, idk.

that's what I thought as odd when the first heard the news. However then the articles mentioned revenues (also some other hacked documents) and I think the rate of return is really low. Given Sony is experiencing huge losses it might make sense to sell their share of the catalog and make anywhere between $750 Million to $1 billion or more. Companies regularly restructure their businesses.

 

[Tygger]

Bonnie Blue, Ivy, why is it odd?

The hacked emails show they are concerned about their failing electronics division and are looking to save that by selling a very profitable asset. That is the easier route and that is the route that is usually taken.

The ROR is low because they need to restructure their music publishing business model to be more effective and reflective of the current climate which includes streaming and the like. To restructure that business model is the more difficult, riskier route. While this route may promise more rewards, the rewards are quite a distance away where a sale can be completed probably within a year or two provided it does not result in the new owners (most likely EMI in my view) having a monopoly.

Adding: Sony most likely will still administer the catalog regardless of who owns it which does not solve the ROR restructuring problem.

 

[ivy]

The hacked emails show they are concerned about their failing electronics division and are looking to save that by selling a very profitable asset. That is the easier route and that is the route that is usually taken.

and I agree with this and this is not the odd part.

Odd part is that their electronics division was failing for quite some time but yet they invested in buying EMI putting themselves in another element of debt / negative line on the balance sheet. Logically I wouldn't expect them to make multi billion dollar purchase if their financial situation was that bad. or alternatively I wouldn't expect someone that buys a billion dollar asset to turn around and plan to sell their all assets only a few years later. To me that's the odd part or more correctly it doesn't seem like they had a long term plan.

 

[Tygger]

Sony itself is not failing, only the electronics division was noted as failing.

Their EMI stake is not for sale. That stake was a sound business decision to acquire as they have administration rights.

The EMI stake has no bearing on the potential sale of one asset, the Sony/ATV catalog, to save a failing division. Provided it is sold, it will most likely be to EMI in my view and Sony will continue its administrative rights. They will still have a stake in the Sony/ATV catalog as per their EMI stake and control with administrative rights (that they receive payment for) provided that is how the sale happens.

That is a win-win for them (and the Estate) however; they still have an issue in regards to remodeling the ROR structure.

 

[HIStory]

^ The EMI stake is a part of the Sony/ATV catalog.

2012 Sony/ATV leads a consortium that acquires EMI Music Publishing, the world's largest catalog with over 1,300,000 rights to songs, making Sony/ATV the world's largest music publishing corporation with over 2,000,000 songs and about 1.26 billion dollars in revenue per year.

In November 2011, Citigroup announced a tentative deal to sell EMI, with the recorded music arm going to Vivendi's Universal Music Group for $1.9 billion and the publishing business going to a Sony/ATV-led consortium for around $2.2 billion.[SUP][38][/SUP] Other members of the Sony consortium include Blackstone and Abu Dhabi-owned investment fund Mubadala.[SUP][39][/SUP] In March 2012, concessions were offered to the European Union to help win approval of the consortium's purchase.[SUP][40][/SUP] The deal won European Union approval on April 19, 2012.[SUP][41][/SUP] As part of the deal, Sony/EMI divested the publishing rights for Famous Music UK and Virgin Music. These catalogues were acquired by BMG Rights Management in December 2012 for $150 million.[SUP][42][/SUP]

http://en.wikipedia.org/wiki/Sony/ATV_Music_Publishing


One of the reasons of the sale, acc. to the e-mail that was leaked, is the complicated ownership. Which is complicated exactly because of the EMI stake.

 

[ivy]

Provided it is sold, it will most likely be to EMI in my view

I'm not sure I follow this one. EMI's owner Terra Firma defaulted on the loan/debt and Citigroup took possession of EMI around 2011. This lead to EMI's sale in 2012 and Sony acquired EMI publishing. Music section of EMI was sold to Universal. So there's no longer an EMI company. Do you mean the consortium that bought EMI will probably buy Sony's share of Sony/ATV?

One of the reasons of the sale, acc. to the e-mail that was leaked, is the complicated ownership. Which is complicated exactly because of the EMI stake.

I agree. Sony/ATV is 50-50 ownership between MJ and Sony. That's not complicated IMO.

EMI on the other hand according to Billboard is way more complex.

According to the document, EMI will be owned by two consortium companies: Nile Acquisition LLC, referred to as the Sony Sub, which consists of Sony and the Michael Jackson estate; and Nile Acquisition Holding Co. Ltd., which would be owned by Mubadala, Jynwel, GSO and other investors under the name EMI West. The documents reveal that the Sony consortium will appoint four board members, and Mubadala would also appoint four members of the 12-member board overseeing EMI. The percent-ownership of each were edited out of the report, although sources say Sony and the Jackson estate would own 38%.

 

[elusive moonwalker]

Thanks ivy. so only u.s rights

 

[Tygger]

Respect77, I am not referring to the EMI stake. The original Sony/ATV portion has two owners only. EMI is not in partnership with that original portion.

Do you mean the consortium that bought EMI will probably buy Sony's share of Sony/ATV?

Yes. It is speculation that Sony was interested in the EMI stake being sold which is what I said in my first post in the thread. The emails refer to ATV which is a partnership. I do not believe EMI would only be purchasing Sony's share. I believe it will be the full catalog as the Estate will most likely sell their share along with Sony.

Adding: does anyone have the link to the actual email?

 

[HIStory]

Respect77, I am not referring to the EMI stake. The original Sony/ATV portion has two owners only. EMI is not in partnership with that original portion.

Then I do not understand what you are saying about the EMI stake:

Their EMI stake is not for sale. That stake was a sound business decision to acquire as they have administration rights.

The EMI stake is a part of the Sony/ATV catalog. There is nothing in the article that said they would only sell the rest but not the EMI stake. In fact, the article said one of the reasons named was the complicated ownership, which is exactly because of the EMI stake.

I do not believe EMI would only be purchasing Sony's share. I believe it will be the full catalog as the Estate will most likely sell their share along with Sony.

Like Ivy pointed out EMI does not exist any more, so I'm not sure where does this idea about EMI buying Sony's (and the Estate's) share come from.

 

[Tygger]

Respect77, remember what I said about speculation in the Robson thread? Allow me to re-post what the first article said which points to speculation about the EMI portion:

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.
http://www.wsj.com/articles/sony-ex...publishing-unit-leaked-emails-show-1419369448

Bloomberg however speculated the EMI portion would be included. No one knows if the EMI portion will truly be sold except those at Sony. Their concern is not intention; despite Bloomberg’s interpretation:

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.

Now, here is Bloomberg detailing Sony’s EMI stake:

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.

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.
http://www.bloomberg.com/news/2014-...ell-music-publishing-unit-owning-beatles.html

Here is Billboard repeating Bloomberg and continuing Bloomberg's speculation that the EMI stake would be considered for sale. Again, concern is not intent:

Sony/ATV is a 50/50 joint-venture between Sony Corp. and the Michael Jackson estate. In addition, those two partners also own a combined 39.8 percent -- 29.8 percentage points by Sony and almost 10 percentage points by the Jackson estate -- of EMI Music Publishing, thanks to a consortium put together by then-Sony Corp. of America CFO Rob Wiesenthal. That consortium, which also consists of Mubadala Development, Jynwel Capital Ltd., the Blackstone Group's GSO Partners and David Geffen, paid $2.2 billion in June 2012 for EMI's publishing catalog.

Further details of the sale plan -- including possible suitors -- are unknown, the Bloomberg report noted. So it couldn't be determined if Sony was looking to sell all of its publishing assets, or its portion of the EMI Music Publishing catalog. It's also unclear if the subject of Sony selling its portion of EMI has been broached with the rest of the consortium.
http://www.billboard.com/articles/b...ale-music-publishing-division-hackers-atv-emi

Now, if Bloomberg can speculate the EMI stake would be included and you agree with that, tis fine.

I can speculate that the EMI stake (30% of 1.3M songs) is not included and only the Sony/ATV portion (50% of 750K+ songs) would be in a potential sale to the owners of EMI publishing. I further believe, if that sale happens, it will include the Estate's 50% of Sony/ATV and almost 10% of EMI.

Neither speculation is more valid than the other.

 

[TinnyandOdd]

Sony itself is not failing, only the electronics division was noted as failing.

Maybe they shouldn't have come out with a $1200 Walkman that only rich people can afford ... Sorry I had to

 

[Tygger]

Maybe they shouldn't have come out with a $1200 Walkman that only rich people can afford ... Sorry I had to

Indeed!

The days of Sony as a technological juggernaut have long been over.

 

[HIStoric]

Indeed!

The days of Sony as a technological juggernaut have long been over.

Apart from the PlayStation 4, you're absolutely right. I think I heard a while ago they were going to focus a lot more resources on the PS4, simply because it's (by far) they're more successful product atm.

 

[Tygger]

Apart from the PlayStation 4, you're absolutely right. I think I heard a while ago they were going to focus a lot more resources on the PS4, simply because it's (by far) they're more successful product atm.

Forbes recently wrote about PS4 and it seems even Sony does not understand the success of their own product.

This past August, Sony’s Shuhei Yoshida famously said that even he didn’t fully understand why the PS4 was selling so well:

“It’s just beyond our imagination. We are so happy. But I for one am a bit nervous because we do not completely understand what’s happening. You need to understand why your products are selling well so you can plan for the future, right? It defied the conventional thinking.”
http://www.forbes.com/sites/insertc...rstand-how-on-earth-sony-has-sold-18-5m-ps4s/

 

[HIStoric]

Forbes recently wrote about PS4 and it seems even Sony does not understand the success of their own product.

Interesting. Reading the article, they bring up many points that my friends and I have agreed on as to why the PS4 has done so well.

Right now, the Xbox One and the PS4 are functionally identical in almost every way, but it was a long, slow crawl for Microsoft to walk back huge issue after huge issue with the Xbox One, first turning away from a mostly disc-less future even before launch, and then eventually surgically removing the borderline useless Kinect from the system resulting in the lower price the One should have always had. Throw in your preference for exclusive games and a lower bundle price, and right now, the Xbox One might even be the more attractive option.

When Xbox One was first announced, there was a large amount of DRM restrictions on the console. You had to connect to the internet every 24 hours, you could not rent/sell games you bought to name a few of them of the top of my head. That was ridiculously anti-gamer and Microsoft seriously shot itself in the foot. Plus their first big conference about the Xbox One was dedicated to watching entertainment, not playing it. Shortly after, Sony had their announcement and took advantage of all the mistakes Microsoft had made. Even though Microsoft reverted these ridiculous anti-gamer DRM policies after 10 days, the damage was done; it was pretty clear who was going to be the leader this console generation. That's not even mentioning price (where usually PS4 is cheaper).

I find it really weird because it's not that hard to realise why PS4 started off so well, Microsoft essentially shot itself in the foot. Perhaps Sony do understand why it STARTED off so well but they're trying to think of why it's still selling so much better than the competition, especially now that the Xbox One has removed many of the negative features?

Who knows. I can think of a number of reasons why I personally purchased a PS4 over an Xbox One recently, but I don't want to make this post longer than it already is.

 

[HIStory]

Now, if Bloomberg can speculate the EMI stake would be included and you agree with that, tis fine.

I can speculate that the EMI stake (30% of 1.3M songs) is not included and only the Sony/ATV portion (50% of 750K+ songs) would be in a potential sale to the owners of EMI publishing. I further believe, if that sale happens, it will include the Estate's 50% of Sony/ATV and almost 10% of EMI.

Neither speculation is more valid than the other.

So you are just speculating. OK.

However that does not change the fact that EMI does not exist any more, so EMI cannot buy the catalog. Anyone is allowed to speculate about anything, of course, but it does not hurt if a speculation actually makes sense (for example a company that does not exist will not be the likely buyer). But OK, speculate, you are free to do so. I'd have loved to know what you base your speculations on but of course you are not required to give an explanation.

 

[Tygger]

Respect77, you readily agreed with Bloomberg's speculation without realizing it and I did not. No comment about that eh?

The easier route (always taken) is to continue confusion on a mistake that was already corrected when one has nothing more to add. Whatever makes you happy.

 

[HIStory]

Fortunately everyone can read back in this thread what I "agreed with" and what I did not.

 

[Tygger]

Respect77, indeed, anyone interested in reading this thread can. They can also see you resurrecting a mistake that was already corrected instead of discussing Bloomberg's speculation that was not recognized earlier by yourself (and some others).

I see no purpose in continuing in that vein however; I understand it may continue regardless. That is not in my control.

 

[Zakk]

So universal music purchased EMI? when did that happen? if they can buy that, why can't they purchase Sony's portion of the ATV catalog? would be great if The Estate did work with Universal, to be quite honest i prefer how they do thing's with visual material! they have a very large warehouse.. would be great if Michael's work was to be archived there also!

 

[HIStory]

Tygger, I was simply curious about what you base this statement on:

Their EMI stake is not for sale.

You did not say "In my opinion the EMI stake is not for sale" but stated this as if it's a fact, that's why I was curious if you have any information to back that up or anything. You made it clear you have nothing to back it up, it was only speculation on your part. That is enough to me.