I.B. BAD: HAPPINESS IS A WARM DONE DEAL

Sony got everything it wanted when Michael Jackson agreed to sell half of his 50% stake in Sony/ATV Music. First, because Jackson is no longer an equal partner, Sony no longer has to go through the headache of seeking his approval on major business decisions, as it had to do previously on any deal over $1 million—a big factor considering Jackson's unpredictable behavior and predilection for dropping out of sight for months at a time. Additionally, by restructuring Jackson's sizable debt, the agreement eliminates the possibility of an outside party seizing control of half of the company in an auction scenario, which is why Sony was so deeply involved in helping Jackson seek financial relief. While Sony hasn't yet written the check to Jackson—which will reportedly be for about $200 million after the deduction of all costs—the agreement enables the company to do so at will… While the deal was negotiated between Jackson’s Middle Eastern advisors and Sony Corp. bigwig Rob Wiesenthal, the whole thing was made possible by the ongoing actions of longtime Jackson legal advisor John Branca, who put together the deals that resulted in Jackson getting half of Sony/ATV and setting up Mijac Music to house Jackson's own publishing. These two publishing holdings remain Jackson's biggest assets, with his half of Sony/ATV valued at around $500 million overall and Mijac said to be worth $100 million. Additionally, Neverland Ranch is worth around $50 million, while his masters are valued at $25 million-$50 million. That puts Jackson’s assets north of $600 million, compared to his estimated $300 million in debt, suggesting that media characterizations that he was near bankruptcy were somewhat exaggerated… Branca will clear a cool $20 million for his own 5% stake in Jackson’s Sony/ATV holdings, and in this soft market, which has seen a precipitous drop in legal fees in recent years, that is a huge payday for the wily attorney and his firm… One added benefit to Sony is that the value of Sony/ATV will get a significant bump when the Beatles catalog, now being digitized by the band's Apple Corps, becomes available online… Many expect that Sony’s next major acquisition will be in the $2 billion range, as the company appears poised to acquire the 50% of Sony BMG presently owned by Bertelsmann. Considering that Sony’s core electronics business is ailing, and that music is a slow- to no-growth business, this would seem to be a strange time for Sir Howard Stringer to open up the company coffers… Speaking of deals (and when are we not?), much buzz about Interscope's nontraditional revenue-sharing arrangement with the Pussycat Dolls, the latest wrinkle being an agreement with Hasbro Toys to manufacture Pussycat Doll dolls. This could be turn out to be quite lucrative for all parties considering the revenues supposedly generated by the Spice Girl dolls a decade ago. The idea for the pact came from veteran entertainment attorney Fred Goldring, whose firm consults Hasbro on entertainment and music… The Pussycat Dolls deal is but one example of forward thinking at Interscope. There's also a growing buzz about the label group's foray into TV. And while it’s unclear what Interscope’s play will be, or what role will be assigned to Polly Anthony, most believe the move was inspired by the coveting of American Idol’s platform, which has generated tens of millions in album sales… According to sources in Burbank, certain Maverick executives are being offered jobs inside Warner/Reprise, as the parent company is said to be in negotiations to possibly shutter or further downsize Maverick. These same sources express some surprise that the boutique label would be shut down after Lyor Cohen had reportedly given his word to his close friend Guy Oseary that Maverick would continue to exist. That said, the fate of Maverick is probably not Guy O's top priority at the moment, as his management client Madonna prepares to launch a major tour; her last one netted $125 million… Before the FCC launched its own payola investigation against four radio companies last week, many in the business were applauding Entercom for filing a motion to throw out Eliot Spitzer’s suit. Interestingly, up until last week, Entercom and other radio operators were still accepting spin programs, taking the position that if the FCC had no problem with these programs, they were operating within the law, despite Spitzer's allegations of illegality. In the wake of the new FCC probe, that position obviously will have to be reexamined. Spitzer’s outlawing of spin programs at the majors, which took millions in revenue off the table for Entercom and others, was quietly applauded by some top label execs, who’d concluded after taking a closer look that they were just another futile and costly promotion exercise. But no matter when the paid-for airplay occurred, history has shown that you can't make chicken salad out of chicken shit… Some thought Entercom's legal battle with Spitzer would motivate UMG and EMI to ease off on negotiations with the NY AG's office until the courts decide whether to throw out Spitzer's suit. But even before the FCC got into the act, these majors continued to work toward settling, preferring to put the matter behind them… Ian Montone is in the process of taking down his lawyer's shingle in order to focus exclusively on managing the White Stripes, the Raconteurs, the Shins and Autolux with his partner Emmett Malloy (Jack Johnson). Legal representation of most of his acts is being taken over by other attorneys at Davis, Shapiro, Lewit, Montone & Hayes… Names in the Rumor Mill: Walter Yetnikoff, Cliff Burnstein, Craig Lambert, Randy Goodman, Rob McDermott and Ron Fair.