About 35 years ago when Paul McCartney and Michael Jackson were all chummy, Macca had some advice for MJ, who was just starting to see some super-serious profits from sales of the Thriller album.
“Sales royalties are great,” he said, “but the real money is made from holding the publishing rights to songs that aren’t your own. I went out and bought a bunch of song catalogues. For example, every time anyone plays a Buddy Holly song, I get a piece of the action.”
This sounded like sage advice, so when the Northern Songs catalogue–the package of Beatles songs they lost due to mismanagement in the 60s–came up for sale in 1985, MJ outbid Macca, taking everything for $41.5 million. All rights to pretty much everything from the first half of the Beatles career transferred to Michael Jackson. And over the years, Jackson got deeper and deeper into the world of owning the publishing of other people. He made gazillions.
Back in the 90s, MJ and Sony, Jackson’s record company, entered into a joint venture called Sony/ATV which earning more gazillions. But then MJ fell on hard financial times towards the end of his life and was forced to put up much of his song catalogues as collateral against some desperately-needed loans from Sonyto keep his very expensive lifestyle afloat.
Now, though, the estate has decided to sell off the rest of MJ’s interest in Sony/ATV for $750 million. The package includes the rights to all of Jackson’s recordings plus those of others–presumably all those Beatles songs. I’m sure Macca would have loved to get his hands on things, but that price is too rich, even for him. Besides, given the complicated relationship within Sony/ATV, I’m sure Sony had first right of refusal on any sale by the Jackson estate.
Shame to lose all that revenue-producing material. Still, not a bad return, huh? More at Billboard.
This is a historic purchase with repercussions that will felt through the music industry. Music Business Worldwide breaks it down.
Sony is very close to executing a $750m purchase of the 50% stake in Sony/ATV it didn’t previously own.
This deal not only completely alters the shape of the music publishing industry, but instantly makes Sony – the wider company – a far greater threat to Universal Music Group than it was last week.
Below, MBW takes a look at five crucial aspects of this historic deal – and what it might mean for Sony, UMG and the future of the music business itself.
Operationally, Sony’s music division looks desperately untidy next to its fellow major music giants.
Both Universal Music Group and Warner Music Group house their publishing divisions neatly beside their record companies.
Warner/Chappell operates as a sister company to labels such as Atlantic and Warner Bros, with all parties ultimately reporting into WMG CEO Stephen Cooper.
Universal Music Publishing, meanwhile, follows the same structure – with UMPG boss Jody Gerson, like her UMG label colleagues, reporting into CEO Lucian Grainge.
What this ultimately means is that Cooper (or his boss, Len Blavatnik) and Grainge can direct negotiations with digital services across both publishing and records in one fell swoop.
On one hand, this is immensely powerful. Global agreements across huge songwriting and master catalogues can be agreed with a single signature.
On the other hand, it’s also a bit worrying.