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“Sony/ATV’s really started to gain greater value in recent years. I’m very bullish on its prospects.”
——music consultant Barry Massarsky
FINANCIAL POWERS CIRCLING JACKSON’S HALF OF SONY/ATV
Stake Is Already Worth as Much as $500m and Continues to Increase in Value
Several major financial firms have made inquiries into buying the Jackson estate’s crown jewel, 50% of Sony/ATV Music Publishing, the N.Y. Times reported, citing people briefed on the matter. Among the prospective bidders are Colony Capital, Kohlberg Kravis Roberts, Plainfield Asset Management and media mogul Haim Saban, say these sources. The stake could be worth as much as $500 million.

But longtime Jackson attorney John Branca, who structured the initial purchase of the Beatles catalog and is now co-executor of the estate , declined to comment by email on Sunday, saying only that Jackson’s stake in Sony/ATV “is not for sale.”

To synopsize: Jackson bought the majority of the Beatles catalog in 1985 for $47.5 million, after an informal chat with Paul McCartney about the wisdom of buying song catalogs.

Since then, Sony/ATV—formed out of a 1995 deal between ATV Music and Sony—has increased in value via acquiring the copyrights of artists like Bob Dylan, Joni Mitchell, Beck and Taylor Swift. Respected publishing veteran Marty Bandier has continued to make strategic acquisitions since taking the helm of the pubbery in early 2007.

“Sony/ATV’s really started to gain greater value in recent years,” music consultant Barry Massarsky told the Times. “I’m very bullish on its prospects.”

Some of the above-mentioned firms have connections to the Jackson family, reporters Andrew Sorkin and Michael de la Merced pointed out. Colony is a co-owner of the Neverland ranch. Chairman/CEO Thomas J. Barrack Jr., has personally made overtures to family representatives. Plainfield lent money to Mijac, which houses Jackson’s own copyrights. Mijac has an estimated worth of $50-100 million and is likely to grow with the pickup in album sales since his death, the story notes.

Jackson was days away from filing for bankruptcy in 2006 when Sony chief Howard Stringer and CFO Robert Wiesenthal  bailed him out. In return, Sony took greater operational control of Sony/ATV and received an option to buy half of Jackson’s share. It’s possible that Sony could seek to use its option, leaving the Jackson family with a 25% stake. Some of the private equity firms have proposed teaming with Sony to buy the remaining stake from the family, sources said.

The estate still carries $400 million to $500 million in debt. Barclays holds about $300 million of debt against the Jackson estate’s stake in Sony/ATV.

The stake is likely to continue to grow in value, and some members of the Jackson family have considered selling. But others have proposed putting together a consortium to buy out Sony’s 50% stake, though the company says it has no interest in selling.

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