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

OnirMJ

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Somethings not right.. I'm not a conspiracy theorist, but let us not forget that it was no secret that MJ was not only afraid of losing the catalogue, but even voiced that he was afraid he would be killed for it.. Why would he be afraid of that if Sony could come in and buy it at any moment? and why wouldn't they have bought it when MJ was going around boycotting Sony? (https://www.youtube.com/watch?v=k3OcHA0yaOA)

The clause was added in 2006. Read this thread and search for that article that explains everything. They could have bought it from 2006-2009 but probably they didn't have 750 MIL or more back then to invest. And MJ knew about that options as he signed the new deal in 2006.
 

etoile 37

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Is it true that John Branca works for Sony and therefore would be in a conflict of interest?
 

christy

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Still reeling from the shock! Trying to be rational, however you slice it , it’s still a loss ...sentimentally and emotionally.
Kinda saw this coming when Sony said they'd exercise the clause.
If you interpreted in October 2015, it would look like a reverse take-over, meaning Sony can buy over Michael's share.
Fast forward 6 months & outta of nowhere

Wham! Bamm! Michael you're out! Sony's in. Here's 750Million. Take it !
I would like to know what kind of investment out there in today's business climate will garna you 17M in annual revenue?
Give it another 14.5 years all of your 250M debt is wipe out! Home run. Not any more...
<o:p></o:p>
...with750M cash payout, minus whatever financial obligations can easily trickle down to ...
let's not go there... too much heartbreak for a day.
What's done is done. Just pray it won't be squandered by ill-advised accountants he had during Dieter's time.
 

Paris78

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Sony To Buy Michael Jackson's Half Of Sony/ATV For $750 Million
http://www.forbes.com/sites/zackoma...half-of-sonyatv-for-750-million/#280323d17474
by Zack O'Malley Greenburg/Forbes Staff

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.”
 

Autumn II

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Wouldn't the "investors" own it then?

The "owner" would be the party with the biggest share of the catalog. Just as with any company that sells shares, the shareholders invest in the company and are partial owners, but not decision-makers collectively unless the company goes public. So no, the estate would be the owner.
 

Justthefacts

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Michael took out high risk loans, he had shady working for him and he had to support himself and his family and let&#8217;s not forget the 2005 trial. The debt was not something made up by haters it was real. All of you saying the estate should have done this or done that please tell us what could they have done if Sony forced the issue? Try to buy it? That would cost hundreds of of millions of dollars more debt. People who keep saying Michael would not want this, Michael also would not have wanted this, sometimes what Michael wanted was the best thing hence the debt. The best decisions especially when talking about a lot of money are made with your head not your heart
 

barbee0715

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Paris78;4141076 said:
Sony To Buy Michael Jackson's Half Of Sony/ATV For $750 Million
http://www.forbes.com/sites/zackoma...half-of-sonyatv-for-750-million/#280323d17474
by Zack O'Malley Greenburg/Forbes Staff

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&#8211;at least until today, when Jackson&#8217;s estate announced the sale of the King of Pop&#8217;s half of the Sony/ATV catalogue to Sony for $750 million.

&#8220;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,&#8221; said Michael Lynton, CEO of Sony Entertainment, in a statement. &#8220;This acquisition will enable Sony to more quickly adapt to changes in the music publishing business.&#8221;

The deal is also represents cold, hard confirmation of Jackson&#8217;s own little-known business savvy. He purchased ATV, home to many of the Beatles&#8217; best publishing copyrights, in 1985 for $47.5 million&#8211;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.

&#8220;He got the bug,&#8221; Gordy told me in an interview for my book, Michael Jackson, Inc. &#8220;And that gave him the [urge] to want to do something even greater.&#8221;

Jackson realized a massive profit on his investment in the mid-1990s when he merged his catalogue with Sony&#8217;s in exchange for $115 million&#8211;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&#8217;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&#8217;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.

&#8220;This transaction further allows us to continue our efforts of maximizing the value of Michael&#8217;s Estate for the benefit of his children,&#8221; said Branca and McClain in a statement. &#8220;It also further validates Michael&#8217;s foresight and genius in investing in music publishing.&#8221;

Jackson&#8217;s children will still be able to enjoy the fruits of their father&#8217;s foresight&#8211;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&#8217;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&#8211;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: &#8220;I told you I knew the music publishing business.&#8221;
Great article. One of the many, many times through the years I felt like Michael was having the last laugh on everybody else. Laugh all the way to the bank.

(Also, glad they brought up the Great Recession in 2009-which we are pretty much still going through-had Michael sold the catalog then, he would have had to sell a rock bottom price-which I am sure is the real reason he did not consider it at the time-he may not have even made enough money to cover debt back then-all investment properties have soared in value in just the last few years-)
 
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Dangerous1991

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I'm not 100% sure about what to say about this, 50% of me is angry, but the other half feels like I should wait and see the outcome and see what kind of historic debt this will be resolving/if there is a method behind this move. The part that angers me is Michael fought for this tooth and nail, we all know that, it was Michael's asset that Sony always wanted, and one I feel he would have still had in his grasp to this day if he was still with us. Saying that, maybe Michael had a plan to sell at this stage of the contract, i really dont know. I just pray that Michaels best interest are always at heart, and I sometimes find that difficult to believe.
I just hope the outcome of this is a debt free estate, a debt free future for Michael Jacksons legacy, at the moment thats the only positive I can think of.

Im going to bite my tongue and reserve judgement until we hear/understand more, I think alot of things can be said in spite and in shock, but until I fully understand the deal/proposal and outcome I don't currently know where I sit with it, at the moment i just feel a bit hollow and 'meh' about the ordeal.
 

Billie Jean 78

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Is it safe to say that Michael is turning in his untimely grave?

Is it safe to say NR. 2 that PPB will have lot's of new "friends" over the next few years, especially from the own wide family?

Is it safe to say NR. 3 that Mrs. Jackson will probably soon need a substantial raise of her pocket money to cover her growing living expenses?
 

ILoveHIStory

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Why Michael Jackson Will Earn More Than Any Musician In History This Year

http://www.forbes.com/sites/zackoma...y-musician-in-history-this-year/#36db9f073b11

When Apple bought Dr. Dre’s Be@ts for $3 billion nearly two years ago, the deal propelled the superproducer to a record $620 million payday in 2014–a total that seemed unbeatable. But the mark didn’t last long.

Yesterday, Michael Jackson snagged $750 million in a single deal, the sale of his half of the Sony /ATV publishing catalogue to Sony. He’ll have time to add to that total this year, but the agreement already guarantees him the biggest annual haul of any musician in history.

That may come as a surprise to many outsiders, but those who knew Jackson were well aware of his business savvy. Buying the original ATV for $47.5 million, a price viewed by many as exorbitant at the time, was just one example.

“He had good instincts . . . more, more, more; better, better, better,” said Sandy Gallin, who managed Jackson for much of the 1990s, in an interview for my book, Michael Jackson, Inc. “He would, in his mind, negotiate the same way. No matter what anybody would offer, he wanted more.”

To put that $750 million sum into perspective, it’s more than the combined earnings of the world’s eight highest-paid musicians of 2015: Katy Perry, One Direction, Garth Brooks, Taylor Swift, The Eagles, Justin Timberlake, Diddy and Fleetwood Mac. It’s more than double Oprah’s biggest payday of $315 million in 2010.

Jackson’s 2016 haul will likely soar past $800 million. He’ll continue to earn from assets that remain under his estate’s control, including his own Mijac Music publishing catalogue. He’s also poised to keep profiting from the Michael Jackson One show by Cirque du Soleil in Las Vegas, as well as new music down the line.

In any case, there’s little doubt Jackson will continue to out-earn his peers, dead or alive.

“He had a kid’s heart,” Berry Gordy once told me, “but a mind of a genius.”
 

ILoveHIStory

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btw, Michael Jackson bought ATV Music Publishing in 1985 for $47.5 million, or about $105 million at 2016 value.

We will never forget this: MJ signed the merging with Sony Music in 1995

69065e61f100c2dd76000588c01f7250.jpg
 
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HIStory

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Does anyone know what music (other then his own) MJ has under MIJAC?

Sly and the Family Stone's full catalog.

In addition to Sly and The Family Stone and Jackson's own songs, the Mijac catalog includes "Ain't No Stoppin' Us Now," "After Midnight," "Ease on Down the Road," "Great Balls of Fire," "(Your Love Keeps Lifting Me) Higher and Higher," "I Got A Woman," "If You Don't Know Me By Now," "Love Train," "Mr. Bojangles," "People Get Ready," "Runaround Sue," "Shake, Rattle and Roll," "Sixteen Candles," "The Wanderer", "What'd I Say," "When a Man Loves a Woman" and "You Don't Know Me."
 

mkgenie

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Anyone knows how much the Estate will eventually get from 750m after taxes and debts and any other fees?
 

OnirMJ

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Anyone knows how much the Estate will eventually get from 750m after taxes and debts and any other fees?

I guess they'll get those 750 MIL (minus taxes) and then they'll close MJ's remaining personal debt he had against ATV company which is 220 MIL. They'll end up with roughly 300 MIL in cash.
 

Antwort

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^^^ Contracts and clauses don't work exactly like that girlie. People have already explained it.

Normally, Michael's financial issues don't concern me much, but on this one occasion I'll make an exception, especially considering some of the things I've read in this thread. I'll be the first to admit that I'm the farthest thing from a business pro. Considering the type of investments I've made over the years, many would be well entitled to call me the world's lousiest business gal. In spite of all of the above, I will however dare and give my two cents and 6/7 paragraphs on this news item :p

1. In between the 1995 merger, this sale and the revenue over the three decades of ATV ownership, Michael's companies have managed to gather well over $ 1bln. For an initial investment of around 100 mln (in today's money apparently) that is not a bad profit margin at all. Even a mathematically-challenged one like myself can understand that.

2. Based also on the same algebra for simpletons, I fail to see how the upfront payment of 43 years worth of ATV rights (as I believe was calculated earlier by Ivy) can possibly be a huge mistake. Especially considering the state of the music market AND the imminent "de-structuring" of the Beatles catalogue due to rights returning to Paul, Yoko and co. as early as 2018.

3. I would be curious to know what some conspiracy-minded fans would say if it were to be confirmed, as Ivy suggested based on past documents, that the executors stand to receive nothing (or close to it) from this particular transaction. And in similar fashion, I would also like to understand why some people are bent on seeing Michael's presumed blood on Sony's corporate hands if they could have forced the sell-out while he was very much alive and kicking.

4. I would also caution anyone against assuming how Michael may have felt about this or any other issue for that matter. Just because he may have been adamant about keeping it in the past, it doesn't mean he would still feel that way. People and circumstances change. He could have realized that it no longer posed the same interest, especially if its preservation involved the accumulation of further debt, something which no responsible parent wants to leave as legacy to their children. As Berry Gordy said, Michael "got the bug" and he knew the business well, so I'm sure he would have made the right move at the right time.

5. And btw of the children - I'm convinced their financial security, as well as that of their heirs, is very much insured. I am afraid some of the things said here have been down right insulting - to the children themselves, their relating to their father, their supposed naivety in choosing the people they surround themselves with, to the rest of Michael's family and to his own legacy. Being part-owner of the Beatles catalog may have been a badge of honor for him, but his greatest accomplishments are quite different. That acquisition and its sell simply are smart business decisions, for Michael then and for the Estate now. His own publishing rights will obviously stay and are debt free, as shall be the entire Estate, and that is what matters most.

6. I realize some people have an emotional attachement to the idea of Michael owning this particular musical catalog, but I think they should stop and wonder if the braggin' rights about it, as they were aptly called, really are worth the postponement by decades of the clearing of debts and the freedom to pursue new avenues which comes from that.

Michael Jackson will have had the ultimate last laugh on those who discouraged and disparaged him so many years ago.

Can't help but notice the irony in that particular line inside of a Forbes article. They sure are gushin' over this particular deal, aren't they? lol I distinctly remember articles of theirs in the early 00s when they could swear Michael was debt-ridden and all done. Turns out the first part was actually accurate. Makes you wonder though, doesn't it?

If you are down and out, they call you a failure and a has been, drag you through the mud and turn you into a laughin' stock. If you are a success (by whatever standards), then you become a certain target for envy and blood-suckin' leeches. Is there any third, magical realm where people can be safe from both the threat of disdain and the sting of envy??? And on that note, I sincerely hope this shall be the last time I take the time to notice Forbes' slight change of tune when it comes to Michael's finances. As I already said before - there are faaar more important things in this world than proving Forbes magazine wrong. Not only that, but they can have some really interesting and worthwhile articles on issues well beyond mere financial machinations.
 

redfrog

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about $70 to $130 Million

As for the "tried to kill him for the catalog", it turns out Sony had the buy/sell clause from the start per the statement. That means they could have exercised it when MJ alive as well - assuming there was no limitations. It would mean there was no need to "kill him" to get the catalog. All they needed to activate the clause. But they didn't.

Except MJ probably would have done his best to find other investors and buy Sony's share while Branca didn't really bothered with that. Branca is working for Sony too. Massive conflict of interest.
 

ivy

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1. In between the 1995 merger, this sale and the revenue over the three decades of ATV ownership, Michael's companies have managed to gather well over $ 1bln. For an initial investment of around 100 mln (in today's money apparently) that is not a bad profit margin at all. Even a mathematically-challenged one like myself can understand that.

1 billion from the catalog? as revenues or net income? I don't think catalog brought that much income to be honest. In AEG trial it was testified that MJ got "guaranteed $6.5 million a year, which was increased to $11 million annually in 2008". I think sometime around 2012 - 2013 it got raised to $17 Million annually. (important to note that these are I believe are the net numbers and the gross number is about $23 Million annually)

So even if you go with 21 years at $17 Million it would be $357 Million. 21 years at $23 Million would be $483 Million. So half a billion seems to be more accurate.

I distinctly remember articles of theirs in the early 00s when they could swear Michael was debt-ridden and all done.

I think Michael's situation always was asset rich and cash poor. He had debts. But the developments prove that he could have sold the catalog and paid his debts. I would disagree with the "all done" evaluation though. He had choices. He could have sold some assets and paid the debt, he could have declared bankruptcy or he could have generated new income. He went with the third option - by agreeing to do TII concerts. This probably won't be a popular opinion but sometimes I can't help but think what would have happened if he just sold his Sony/ATV share. He would become debt free and could have lived on the revenue from MIJAC and new music without having to perform. I can't help but wonder if he could be alive today if he chose to sell some assets rather than doing concerts.
 

Prometheus77

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Except MJ probably would have done his best to find other investors and buy Sony's share while Branca didn't really bothered with that. Branca is working for Sony too. Massive conflict of interest.

That could very well be. But Michael is not here anymore and no one knows what he would have done.
 

ivy

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Except MJ probably would have done his best to find other investors and buy Sony's share while Branca didn't really bothered with that.

according to their statement they tried. And MJ when? It would be quite hard to find investors when he was highly leveraged.

Branca is working for Sony too. Massive conflict of interest.

actually it depends. if he was being paid consultant fees but now won't be paid it anymore, he would be doing something against his best interests. Similarly if he continues to gets the consulting fee regardless of Estate's ownership of the catalog , it would become an irrelevant factor.

just because there is a work relationship it doesn't mean a conflict of interest. For a conflict of interest to happen parties should have different interests. partners in a business have the same interest - seeing the business profit. In other words for example Branca advises Sony/ATV, Sony/ATV makes money. Sony makes money, MJ Estate make money. There isn't conflicting interest there.
 

HIStoric

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Am I the only one who gets tired of reading posts from people who haven't bothered to look at the detail beforehand? It's like some people read the thread title, and that's it!

It would only take a few minutes to understand what is actually going on before adding another pointless post. Is that too much to ask?

Rant over.

UGGGHHH YES. THIS 1000X.

yes according to the last accounting.

Also fits with the statement it says $750 Million in total and explains "lump sum payment by SCA of approximately 733 million U.S. dollars as well as distributions previously committed to by Sony/ATV to be paid to the Estate." 750 - 733 = $17 Million. So they are giving them the annual guaranteed $17 Million distribution plus $733 Million.
That looks like a good deal then. They got 44 years worth of profit. PLUS all debts paid. And who knows where the music industry will be in 44 years?

I have to agree, honestly it seems to have worked out fantastically in the Estate's favour :)
 

CherubimII

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That acquisition and its sell simply are smart business decisions, for Michael then and for the Estate now. His own publishing rights will obviously stay and are debt free, as shall be the entire Estate, and that is what matters most.
quote from Girl

I agree! :yes:
 
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