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

[redfrog]

I'm pretty sure Branca didn't try to find other investors either :smilerolleyes: He's a liar... May God strike him for being a liar and a fraud.. I don't trust him one bit.

Of course he didn't. Sony pays him.
And the debt is no excuse for the sale.

Today, the Sony/ATV catalog itself is worth somewhere in the neighborhood of $2 billion, thanks to its ownership of copyrights by The Beatles, Bob Dylan, Taylor Swift, Lady Gaga and others. The interest rate on Jackson’s loan connected to the catalog has been sliced from 5.8% to 2.9% since his death. At that low rate, paying back the loan quickly, in full, may not even be financially expedient—the company’s funds could be better utilized by buying up new, money-generating copyrights.

That said, given Jackson’s postmortem earnings prowess, the estate could probably pay off that loan fairly soon if necessary. The singer’s Immortal World Tour, a joint venture with Cirque Du Soleil, has grossed $160 million this year, making Michael Jackson the top-grossing live act in North America three years after his death. Other deals–including one with Pepsi, Jackson’s first endorsement pact in two decades–should continue to add to the estate’s coffers.

http://www.forbes.com/sites/zackoma...bts-to-be-paid-off-by-years-end/#a9c0a3e3a08d

Diversify is the operative word here,and be debt-FREE especially in turbulent times. I wasn't looking at the estate to buy over Sony's share.
Michael already lost it few days before foreclosure when he signed the deal in 2006. What's done is done. Sony could have exercised their right 10 years ago, but didn't. Only till now. I'd only wished Michael had other options for a bail out 10 years ago. Now with the cash payout now they get to have, eliminate all of their debts & choose their investment strategies shrewdly and yes, DIVERSIFY.

No need to diversify when you have such a profitable asset like that catalog. It's not true that because of streaming publishing
is less lucrative. Quite to the contrary!

3) the Michael Jackson estate did a great bit of business…

When announcing the sale of the Sony/ATV stake, John Branca and John McClain, Co-Executors of the Jackson Estate, made sure to note how smart a deal this was for all concerned.

In a joint statement, they said: “[Michael’s] ATV catalogue, purchased in 1985 for a net acquisition cost of $41.5 million, was the cornerstone of the joint venture and, as evidenced by the value of this transaction, is considered one of the smartest investments in music history.”

Simple maths shows they have a very solid point.

Buy for $41.5m. Sell for $750m.

That’s an 18-times return on investment.

Shamone.
SPOTIFY4) … But not as great as Sony

So why did Sony pay such a seemingly inflated figure for the ATV catalogue?

Because it’s considerably grown in value since 1985 – that much is obvious.

But what’s also missed out in Branca and McClain’s statement is the fact that the value of this catalogue is still growing – and fast – thanks to the changing shape of the music market… particularly streaming.

Just look at the annual revenues of Sony’s music publishing business over the past three years alone.

And MJ didn't lose it in 2006. If Sony had believed
they could get that catalog just by triggering the clause you can be sure they would have done just that! They knew MJ would fight
to buy their share and he would find investors who are interested.
They also knew that Branca won't fight. He is their guy after all.

 

[Gold Pants Girl]

It's so obnoxious seeing people say such ridiculous things, that are mostly completely untrue, it's like some people can't even comprehend simple facts or even articles that break this deal down, but I think it's mostly people just are looking for any excuse to hate on Branca (I guess McClain doesn't exist?) and Sony, doesn't matter if it's true or not, they obviously don't care about facts.

This deal is excellent business wise, it's the emotional and sentimental attachment that make it hard, fans need to accept the reality of these kinds of situations, it would be bad business and a dis-service to the estate to make big decisions based on emotions.


as for Katherine, I'm not surprised, even when MJ was alive, she would run to him to buy her things when she would find out he got some money (i.e. the luxury motor home) I stopped giving her the benefit of the doubt years ago.

 

[Ankita]

The Beatles will own it after 2026, that is..all songs written by them before 1978.. too long a wait though.

 

[144000]

Exactly. You people have to nerve to just assume someone didn't read the thread. Stick to assuming these people killed MJ for the sale guys.

If I understand you correctly, let me ask. That video that I quoted/posted, with Michael speaking against Sony, and the signs he held up about Sony, which were not favorable toward Sony..and..statement he made where he stated that they want his catalogue and they are going to 'kill me' for it. Is that an assumption? Is that hate? Or was that founded fear from the one person who saw it all? Is it an 'assumption' to believe whatever Michael said? This isn't the first, and probably won't be the last time a potential victim or victim points out his/her perpetrators, before the crime happens. Is that really an assumption? If a woman knows a man is stalking her, and then she is raped...if a man knows that certain people are after members of his family, then they are killed, if a child knows another older stronger child has been bullying him/her, and then, later, that potential child victim is beat up, are we to always assume that these victims are paranoid? The victim usually has a good idea, who is perpetrating against them. Naturally, people outside the world of that victim, can't possibly feel or experience what that victim is going through, because of all of our tendency to see only things in our own world, and not someone else's..and our natural propensity to not be sensitive to someone else's trials.

 

[Ankita]

Of course he didn't. Sony pays him. And the debt is no excuse for the sale. No need to diversify when you have such a profitable asset like that catalog. It's not true that because of streaming publishing is less lucrative. Quite to the contrary! And MJ didn't lose it in 2006. If Sony had believed they could get that catalog just by triggering the clause you can be sure they would have done just that! They knew MJ would fight to buy their share and he would find investors who are interested. They also knew that Branca won't fight. He is their guy after all.

I am just so, so heartbroken.. way beyond words :-( and I second 'every bit' you say redfrog! Have been a warrior in his Army of Love for 23 years, and I, like other long time fans know that Michael held on to it till the end! He DID NOT want to sell it! This, from May 10, 2001, "I want to clarify a silly rumour – The Beatles catalogue is not for sale, has not been for sale and will never be for sale." -Michael Jackson :-( :-(

 

[HIStory]

If I understand you correctly, let me ask. That video that I quoted/posted, with Michael speaking against Sony, and the signs he held up about Sony, which were not favorable toward Sony..and..statement he made where he stated that they want his catalogue and they are going to 'kill me' for it. Is that an assumption? Is that hate? Or was that founded fear from the one person who saw it all? Is it an 'assumption' to believe whatever Michael said?

That MJ said it is not an assumption. He did.

That Sony indeed killed him for his catalogue IS an assumption however. There is nothing that links Sony to MJ's death.

 

[Billie Jean 78]

Michael, thinking of John Branca: "And you, Brutus?"

At the first one, probably yes.
Nr 2 most likely, however they got taught well by their father to be cautious on who to trust.
Nr 3 NO because Mrs Jackson isn't a money grubbing vulture, it's already bad enough that she has to deal with the loss of another child. (She lost Marlon's twin Brandon when he was only a baby)

Really? You really think she isn't? And she wouldn't be to feed her lazy grown up cubs??

 

[144000]

That MJ said it is not an assumption. He did.

That Sony indeed killed him for his catalogue IS an assumption however. There is nothing that links Sony to MJ's death.

It wouldn't be the first time a crime is well covered up, a fallguy is created, or blame is mistransfered. Or the first time media wrote something that was not true. But one thing is well documented...there were/are
a lot of people who loved/love referring to MJ as 'paranoid'. A lot of people make the mistake of telling people to do what the teller would not do, but the safest thing to do is believe the victim.

 

[redfrog]

This deal is excellent business wise,

So you think these guys don't know what they're talking about?

But what’s also missed out in Branca and McClain’s statement is the fact that the value of this catalogue is still growing – and fast – thanks to the changing shape of the music market… particularly streaming.

If publishing can keep up this rate of growth, Sony/ATV’s annual revenues will hit 96bn Yen in two years’ time – which currently equates to $880m US dollars.


http://www.musicbusinessworldwide.com/sonys-buyout-of-sonyatv-5-things-you-need-to-know/

If Sony didn't know that music publishing is actually a growing sector they wouldn't have paid 750 m for the catalog.


From the Estate's statement:

In the intervening months, we explored several options that would have positioned the Estate as the buyer, rather than Sony, and we had substantial interest from potential partners to work with us in doing so. Ultimately, however, Sony’s offer was in the best interest of Michael’s children and we made the difficult decision to accept that offer.

No explanation why this was in the best interest of MJ's kids at all. Who were approached, who were interested,
how much they would have been willing to invest, how much the Estate should have invested. They don't say.
We just have to believe that they didn't find enough and we just have to believe that.
While Branca is working for Sony and Sony making it clear for years that they wanted that catalog. Mkay.

There are several reasons that led to our decision. We will use a portion of the proceeds to repay the loan balance on monies borrowed by Michael and secured by his interest in Sony/ATV

Bullshit. With that low interest rate, publishing bringing in more money every year and MJ earning 100m+ every year the debt
could have been paid off without this sale.

Furthermore, the transaction allows the Estate to diversify assets which, to date, have been highly concentrated in music intellectual property.

And was highly profitable and will be even more in the future except only for Sony. They are talking like they
can sure find other investments which will make as much or more money. Your investments being are all over the place in and of itself
does not guarantee good returns.

That was our goal as well when we started on this path last year, but ultimately, Sony’s offer made more sense for the reasons outlined above.

I will believe those reasons when they disclose exactly what they tried to do to buy Sony's share.

 

[HIStory]

It wouldn't be the first time a crime is well covered up, a fallguy is created, or blame is mistransfered. Or the first time media wrote something that was not true. But one thing is well documented...there were/are
a lot of people who loved referring to MJ as 'paranoid'.

You are free to believe in something that has not even a iota of evidence, but that does not make it a fact. It makes it an assumption. And that was the point.

 

[Justthefacts]

I'm pretty sure Branca didn't try to find other investors either :smilerolleyes: He's a liar... May God strike him for being a liar and a fraud.. I don't
trust him one bit.

The last time I checked God did not need your help in condemning people. And I am more then certain John Branca couldn't care less what you think of him

 

[Justthefacts]

All of you saying Sony killed Michael I issue you a challenge, prove it

 

[HIStory]

So you think these guys don't know what they're talking about?



If Sony didn't know that the publishing is actually a growing sector they wouldn't have paid 750 m for the catalog.

Where does this idea come from that if buy-sale deal is good for the buyer it is necessarily bad for the seller? Usually both paries hope for the best possible outcome for them, both hope they made the right decision. And often both make a good decision considering the position they are in. The positions and situation of the Estate and Sony are very different in this.

 

[144000]

You are free to believe in something that has not even a iota of evidence, but that does not make it a fact. It makes it an assumption. And that was the point.

You either consider Michael to be a liar or telling the truth. Whether that is assumption or not, is up for debate.

 

[HIStory]

You either consider Michael to be a liar or telling the truth. Whether that is assumption or not, is up for debate.

You are committing a fallacy here. I will leave it up to you to realize what.

 

[144000]

You are committing a fallacy here. I will leave it up to you to realize what.

I'd rather you just tell me, since you think I'm into assuming. There is no proof that certain people aren't reading the thread. There's just blatant disagreement with responses, that's all. There's a lot of things people are claiming without proof. It's much more obvious about reading the thread, than it is about believing a victim's claim.

 

[ivy]

So Sony, in activating the clause, had to be prepared to lose the whole thing? Is that what you're saying? So party A makes a bid, and then party B can buy the whole thing? That doesn't make a great deal of sense. Ie. say the Estate activated the clause first, Sony would counter and purchase the Estate's half? Surely the agreement worked both ways afterall?

Yes Sony had to be prepared to lose the whole thing. Yes the agreement probably worked both ways as well.
Read the details here : https://en.wikipedia.org/wiki/Shotgun_clause and I'll copy some sections below

The shotgun clause allows a shareholder to offer a specific price per share for the other shareholder(s)’ shares; the other shareholder(s) must then either accept the offer or buy the offering shareholder’s shares at that price per share.

Shotgun clauses protect the interests of both or all parties regardless of their stake in the company. If one party decides to trigger the clause, it is in their best interest to make a well considered, fair offer - for if they make a low offer, their partner(s) may raise the resources to turn the offer against them, a counter offer they would be bound to accept.

Shotgun clauses tend to favour those people with cash readily available. Once a shotgun clause has been triggered, shareholders can often face difficulties obtaining traditional financing in order to buy the other shareholders’ shares, due largely to the very short timeline of the transaction.

As you can see from the above, Sony also had the risk of Estate buying their shares when they activated the clause. But also as you can see from the above, they probably believed Estate doesn't have the money and couldn't raise the money. It would give Sony the advantage.

2. If that's true how come they couldn't pay that off since 2012 when they earned more than 100 m+ in every years since 2012, 160m in 2013 alone?

gross revenues versus net income. You take gross revenues, deduct all your expenses, debt payments etc, then you pay taxes and then you end with net income.

The revenue from the catalog was about 300 m / year. No way the Estate's profit was only 17m from that.

According to leaked Sony emails in 2014 revenue of Sony/Atv was $565 Million. That's gross revenue number. After all the expenses and payments to artists Operating income was $89 Million. You need to pay taxes from that. distribution to owners was $42.7 Million. That makes $21.3 Million for Sony and Estate individually. Accounting document showed a $16.5 Million debt payment. Latest statement mentioned a $17 Million distribution. So in short it looks like they were guaranteed $21 Million and after other expenses, fees etc they end up with $17 Million.

Again there is a huge difference between gross revenues and net income. Don't mix two up.

 

[HIStory]

As you can see from the above, Sony also had the risk of Estate buying their shares when they activated the clause. But also as you can see from the above, they probably believed Estate doesn't have the money and couldn't raise the money. It would give Sony the advantage.

And in the leaked e-mails we have seen that Sony actually DID contemplate selling their share of the catalog and they complained about the "complex ownership and governance of the business". So maybe they thought either option is better than the 50/50 situation.

ETA

From 2014

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 a 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.”


Katie Schroeder, a spokeswoman for Sony at Rubenstein Communications, declined to comment.


Shares of Sony surged 4 percent to 2,568.5 yen in Tokyo, extending this year’s gain to 41 percent.
Publishing accounts for 14 percent of Sony’s music revenue, the main part being recorded music. Sony Corp.’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, in a prelude to a meeting of the three, according to messages released by the hackers.

Sony Deliberations

“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’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 commentabout 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.

http://www.bloomberg.com/news/artic...-to-sell-music-publishing-unit-owning-beatles

 

[InvincibleMJ]

That MJ said it is not an assumption. He did.

That Sony indeed killed him for his catalogue IS an assumption however. There is nothing that links Sony to MJ's death.

Thank you respect, I agree. Everyone is entitled to believe anything they want about the circumstances behind MJ's death and I believe Michael had good reasons to hate Sony back in 2002, I don't like them either. However using his words at the time to prove they killed Michael and this deal is a conspiracy is taking it a bit too far when you're telling other fans that they don't have a third eye and that it's wrong to "assume" things on others.

 

[144000]

Thank you respect, I agree. Everyone is entitled to believe anything they want about the circumstances behind MJ's death and I believe Michael had good reasons to hate Sony back in 2002, I don't like them either. However using his words at the time to prove they killed Michael and this deal is a conspiracy is taking it a bit too far when you're telling other fans that they don't have a third eye and that it's wrong to "assume" things on others.

I appreciate that you agree with me about 2002, but in my view, the passage of time, alone, doesn't stop something from being. If I am 'guilty' of taking Michael's words to the bank, then I gladly stand guilty as charged. I believe that believing the victim is not assuming. I believe that just stating that someone didn't read the thread is assuming. I believed Michael wasn't a child molester before his trial. Before what would be widely regarded as evidence..even though there are still some out there who think it wasn't enough evidence..though I believe they were wrong. I stand by the idea that believing a victim is not an assumption. You just stated that I am entitled to believe what I want about the circumstances surrounding MJ's death, and that's what I'm doing, but you, at the same time, are saying I'm taking it too far, by calling it a conspiracy..(which Michael called this whole scenario in that video and a 60 Minutes interview with Ed Bradley) at the same time. Now we can go back and forth about who is a victim in many cases, but in the case of Michael, which is what I'm focusing on, he never perpetrated anything against anyone. And whatever was attributed against him was initiated by another party. But since I know I would be told not to veer from the subject at hand..which is this catalogue transfer..It's clear that Michael intended to buy something to keep, and his lawyer knew that, and operated otherwise. Every argument I put forth is based on Michael's own statements. That's my evidence. He hasn't disappointed me, in the past. Of course, people are entitled to disagree with me, but this is where I stand. If someone was coming after you, doing bad things, and you proved to me, in the past that you were right about your claims about these bad things, and, so, I believed you, is that an assumption? I realize it's a tough grind to define what an assumption is, but in my view, it's worth the challenge. If I don't believe your claims, and I decide to not do anything about it, or I don't know what to think, and, therefore, I don't do anything about it....you see where I'm going here? I'm always scared to challenge a mod in a debate/argument, but these are my beliefs.

 

[redfrog]

The last time I checked God did not need your help in condemning people. And I am more then certain John Branca couldn't care less what you think of him

And he didn't care what MJ thought of him and Sony either.

According to leaked Sony emails in 2014 revenue of Sony/Atv was $565 Million. That's gross revenue number. After all the expenses and payments to artists Operating income was $89 Million. You need to pay taxes from that. distribution to owners was $42.7 Million. That makes $21.3 Million for Sony and Estate individually. Accounting document showed a $16.5 Million debt payment. Latest statement mentioned a $17 Million distribution. So in short it looks like they were guaranteed $21 Million and after other expenses, fees etc they end up with $17 Million.

Again there is a huge difference between gross revenues and net income. Don't mix two up.

I don't mix them up I just wanted to know where the other 280m went.
What's your source? Link?

The company had concluded the business had few growth prospects.

They sure changed their mind about that.

http://www.bloomberg.com/news/artic...-to-sell-music-publishing-unit-owning-beatles

In the same article:

Publishing Growth

Sony’s music-publishing business will probably 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 may rise 23 percent to $123 million during that period.

But "the company had concluded the business had few growth prospects."
Those projections don't look like streaming having a negative impact.

 

[redfrog]

double

 

[dancinmachine51]

Well, this sucks. Michael spent his final years trying to keep his stake of the Beatles' catalog and it's what kept him financially afloat during those years. If he were still alive, Michael never would have sold it.

I agree with that.
First I have read the statement from the estate...and ok they still own 100% of MiJac which I am happy about, it would hurt me MORE if any of Michael's hard work was sold or furthermore anyone having a thought of selling.
However guys we cannot ignore the fact that Michael spoke about this (sonyATV) for many years, we cannot ignore that.

I understand the estate probably had no other choice as there was indeed a clause which gave Sony the right to sell even Michael's half....we have to applaud Michael that he fought so damn hard for Sony NOT to exercise that right, if indeed it is true that Sony did actually have the right to do so while Michael was still with us...Michael fought and fought, it was his, his hard earned money paid for that catalogue in 1985 and let us not forget that ok.

I hope to God that the estate know what the deal really is here present and future...

My quote for the matter at hand is "they (whoever they is) finally got what they wanted, one way or another they got it...." that is my sentiment and that is what I will always feel. Nor do I wish to elaborate as I am sure most of you understand my quote, and what the depth is in my quote.

On another note I hope someone can answer this....everyone hyped up Man In The Mirror which also lead to it selling over 30 million worldwide, we know that Michael did not write the song ....(which always bugged me to be totally honest, *not knocking it by the way* MITM grew to be a MJ anthem circa 2009 when infact Michael had many others that he wrote himself that ALSO could of been an 'MJ anthem' which would probably of been more meaningful').....
BUT he sang it with his entire soul which did indeed also lead to its success.
ANYWAY, what happens to that? As far as I know out of the commercially known songs Michael recorded MITM and Thriller (maybe just a few more) were not written by Michael so what happens there, where do those songs fall in to? Do they fall into MiJac even if lyrics not written by Michael or do they fall into sony/atv...

 

[krikzil]

They sure changed their mind about that.


In the same article:

But "the company had concluded the business had few growth prospects."
Those projections don't look like streaming having a negative impact.

So, companies can't change their minds? We really have no idea what Sony's plan is for the Catalog but the emails indicate that doing something with the Catalog has been on the radar. Apparently they did devise some plan for it and triggered the clause to put things in motion. Given all the upheaval in Sony it's not really a surprise to me. They've been selling, reorganizing and spinning assets off for years now trying to shore up the company.

 

[144000]

So, companies can't change their minds? We really have no idea what Sony's plan is for the Catalog but the emails indicate that doing something with the Catalog has been on the radar. Apparently they did devise some plan for it and triggered the clause to put things in motion. Given all the upheaval in Sony it's not really a surprise to me. They've been selling, reorganizing and spinning assets off for years now trying to shore up the company.

Companies can't change their minds? What's the use of a contract, then? Why not just put it on toilet paper. Contracts are made because people like to change their minds. You have to stick to it, and hope someone as corrupt as Sony doesn't pull a Kesha.

 

[MJMarty]

I saw this in work earlier and my heart sank. God, Michael fought so hard for so long, he let himself fall into such cash flow problems in his final years just to hold onto the crown jewel of his investments and now it's gone in a flash so the executors can take a 10% share of a $750M deal.

 

[krikzil]

Companies can't change their minds? What's the use of a contract, then? Why not just put it on toilet paper. Contracts are made because people like to change their minds. You have to stick to it, and hope someone as corrupt as Sony doesn't pull a Kesha.

That's a nonsensical response. In "changing their minds", I'm referring to a potential shift in Sony Execs feelings about keeping versus selling the Catalog.

But I'm glad you mentioned having to stick to a contract. MJ made this deal with Sony and it included this buy/sell clause.

 

[144000]

That's a nonsensical response. In "changing their minds", I'm referring to a potential shift in Sony Execs feelings about keeping versus selling the Catalog.

But I'm glad you mentioned having to stick to a contract. MJ made this deal with Sony and it included this buy/sell clause.

You're not making yourself very clear. Are you saying one side can have an out, and the other cannot? And, again, MJ's lawyer saw the fine print and agreed...not Michael.

 

[ivy]

Inside Sony/ATV's Buyout of Michael Jackson's Estate -- And Why They Cashed Out

From pricey antiques to a sprawling ranch stocked with exotic animals, Michael Jackson made many investments of varying usefulness over the course of his career. Yet among all of them, ATV Music Publishing -- which he purchased for $47.5 million in 1985, merged with Sony in a joint venture 10 years later, and which his estate agreed to sell to Sony for $750 million in a deal announced March 14 -- was almost unquestionably the wisest.

Jackson was famously tipped off to the value of music publishing by Paul McCartney -- who never forgave Jackson when, with the assistance of longtime attorney John Branca, he purchased ATV: a 4,000-song catalog that controlled the rights to the Lennon-McCartney catalog, as well as songs by Bruce Springsteen, Cher, Elvis Presley, Hank Williams, Little Richard and The Rolling Stones. The loss of that friendship may be the one downside of the deal for Jackson, for which the singer put up just $11 million in cash, according to a source, and used debt to finance the rest of the deal.

Jackson’s first big payoff from the purchase came in 1995, when he joined forces with Sony to form Sony/ATV, acquiring 50 percent of the merged entity and a $110 million payout: A decade after he bought ATV, Jackson already had doubled his initial investment.

Over the years, Sony/ATV grew exponentially, signing up new artists like Taylor Swift, Ed Sheeran and Lady Gaga; acquiring big catalogs like the 55,000-song country powerhouse Acuff-Rose (which includes songs by Hank Williams, Roy Orbison, Boudleaux Bryant and Marty Robbins), early rock writers Jerry Leiber and Mike Stoller ("Jailhouse Rock," "Hound Dog," "On Broadway,” "There Goes My Baby") and Famous Music (125,000 songs, including hits by Eminem, Shakira, Pink and Beck).

The company also brought in former EMI Publishing chief Martin Bandier as chairman, who within a few years had helped bring the sprawling 1.3-million-song EMI catalog -- which includes songs from Motown to Deadmau5 -- to Sony/ATV in a complex $2.2 billion deal: Sony/ATV administers the catalog and owns just under 30 percent, while the Jackson estate owns just under 10 percent. Once the latter deal closed, Sony/ATV began its still-unbroken streak of 14 straight quarters as the No. 1 publisher in the U.S.

All of that growth has paid off exponentially for the Jackson estate. In recent years, Sony/ATV has been paying an annual dividend of approximately $23 million to the estate, according to Sony’s filings with the SEC. Over the life of his ATV and Sony/ATV stake, those annual dividends averaged about $15 million, according to a source which, if accurate, means Jackson and his estate have collected $560 million from Sony/ATV ($110 million in the initial deal, and $450 million through the years) before this week’s deal, which will deliver another $750 million to the estate.

When Sony triggered the sell/buy clause in its deal with the estate last fall -- which allowed either party to buy out the other -- sources suggest that the Jackson estate was caught by surprise, but quickly warmed to the idea and privately was seeming as if it wanted to be the buyer. Meanwhile, Sony initially seemed that it wanted to be a seller. (Neither side would comment for this story beyond the statements they’ve issued this week.)

But as the deal progressed and Sony asserted its desire to be the buyer, the Jackson estate, helmed by executors Branca and John McClain, changed its approach and decided to take a payday instead, sources say. The beneficiaries named in Jackson’s will are his three children: Paris, Prince and Michael Jr.

“When you take a step back and look at the estate’s assets and then look at what is the best for the beneficiaries, diversification is a key investment philosophy,” says one industry source. “So while the Jackson estate will still be heavily invested in music through his ownership of his recorded masters; the Mijac catalog [which includes Jackson’s songs as well as the Sly & the Family Stone catalog, songs by legendary soul hitmakers Kenneth Gamble and Leon Huff, and songs made famous by Ray Charles, Elvis Presley and Aretha Franklin]; and its stake in EMI Music Publishing, it gives the estate the chance to invest in areas outside of music and also put some cash in the bank.”

The deal will also allow the Jackson estate to pay off an estimated $250 million in debt, leaving it debt free, sources say.

In selling its stake to Sony, the Jackson estate will receive a $733 million lump sum payment and its last dividend from the company, which Billboard estimates to be $17 million -- a total of $750 million. A memorandum of understanding has been signed with a definitive agreement due by March 31 and the deal expected to close either late this year or in early 2017.

Whatever the final valuation for Sony/ATV, Jackson’s investment in the 1985 acquisition of ATV will have paid the Jackson estate $1.31 billion when the deal is done -- and it will continue to generate returns for the Jackson estate. The estate still owns its 10 percent stake in EMI Music Publishing -- which means if the EMI investment is ever unwound, the Jackson estate should, at the least, be looking at another $220 million windfall, and quite possibly more than that.

If that happens, Jackson’s investment in ATV could end up yielding his estate at least $1.53 billion -- and it all began with an $11 million cash investment. "You have to say hats off to Branca,” says an industry source. “He was with Jackson when they bought the ATV catalog -- and look at how they parlayed that over the years.”

http://www.billboard.com/articles/news/7262961/inside-sony-atvs-buyout-michael-jackson-estate

 

[krikzil]

You're not making yourself very clear. Are you saying one side can have an out, and the other cannot? And, again, MJ's lawyer saw the fine print and agreed...not Michael.

No, I'm not. My original comment had nothing to do with the Contract. I'm sorry I can't help you with your reading comprehension issues. Recap:

"The company had concluded the business had few growth prospects."

Comment posted: They sure changed their mind about that.

Me in response: Companies can't change their minds?

Cliff Note: The topic is Sony's opinion on the Catalog's growth potential.