The Sony Corporation has announced it will pay Michael Jackson's
estate $750 million for Jackson's 50 percent share of the Sony/ATV music
publishing company...WOWW.
It all started when Paul McCartney advised his
young friend Michael Jackson that, to really make money in the music
industry, you needed to own the publishing of hit songs. McCartney told
CBS-TV in a 1989 interview that Jackson joked to him "One day I'll own your songs." To McCartney's shock, Jackson was true to his word.
A
music publisher owns the rights to a song's lyrics and composition.
Anytime a song is performed, played on TV or radio, used in a
commercial, etc., the publisher collects royalties. Contracts vary but,
traditionally, that money is split 50/50 with the songwriter.
In
1985, music publisher ATV owned the rights to some 4,000 songs,
including more than 200 by The Beatles. It also owned Little Richard's
Tutti Frutti. Michael Jackson's lawyer, John Branca, knew Jackson was
looking for songs to buy. When Branca learned that the Australian tycoon
who owned ATV was putting the company up for sale, Branca and Jackson
put in a bid. After long, tense negotiations, Jackson was able to
purchase ATV for a reported $47.5 million.
In
the mid-1990s, when Jackson was in debt, he sold half of ATV to Sony,
forming the joint venture Sony/ATV. To get full ownership, Sony offered
Jackson's estate $750 million.
The Sony/ATV catalog has swelled
over the years and now owns or administers the copyrights to more than
three million songs, including hits by Sting, Lady Gaga and Alicia
Keyes. The company controls some of the best known songs in the world,
including "Over The Rainbow" and "New York, New York." One analyst tells
Bloomberg, with the increase in streaming, the trove's worth is more than what Sony's paying for it.
As
for Michael Jackson's estate, it still owns Jackson's master recordings
as well as Mijac Music, the publishing company that owns all of the
songs he wrote. In a statement by co-executors John Branca and John
McClain, the sale to Sony will allow them to maximize the "the value of
Michael's Estate for the benefit of his children."
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