Sony is set to buy out the Michael Jackson estate’s half stake in the Sony/ATV song catalogue for $750 million, the company announced Monday.
“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,” Michael Lynton, CEO of Sony Entertainment, said. “This acquisition will enable Sony to more quickly adapt to changes in the music publishing business.”
The total “includes a lump sum payment by SCA of approximately $733 million as well as distributions previously committed to by Sony/ATV to be paid to the Estate,” according to the statement from the Sony Corporation. The payment also reflects certain contractual and accounting adjustments related to the Sony/ATV joint venture and other commercial opportunities involving Sony and Jackson’s estate.
A definitive agreement is expected by March 31.
“The entertainment businesses have long been a core part of Sony and are a key driver of our future growth,” ssaid Kazuo Hirai, president and CEO of Sony Corporation. “This agreement further demonstrates Sony’s commitment to the entertainment businesses and our firm belief that these businesses will continue to contribute to our success for years to come.”
The King of Pop’s estate is now run by John Branca and John McClain, who had initially hoped to reach a deal to buy out Sony’s stake and had spoken with potential partners, according to the Los Angeles Times. However, the purchase price from Sony ultimately proved attractive to the estate and the Japanese electronics and entertainment corporation will now have full ownership of the music publishing company that represents artists including the Beatles, Leonard Cohen and Bob Dylan.
Jackson purchased ATV, which is home to many of the Beatles’ best publishing copyrights, in 1985 for $47.5 million, despite some thinking that he was overpaying for it. In 1995, Jackson merged the business with Sony’s music publishing arm to form Sony/ATV.
The “Thriller” singer died on June 25, 2009, at age 50, and earned more than any other entertainer either dead or alive in the first five years after his passing. It is estimated that he earned a net worth of $750 million during his lifetime, and it is believed that he has earned over $100 million every calendar year since his death thanks to Branca and McClain making deals for movie rights and new music.
The new 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, according to Forbes.