Sony is buying the 50% of Sony/ATV Music Publishing which it doesn’t currently own from the Jackson Estate for $750m.
However, the Estate will retain its ownership interest in EMI Music Publishing – a stake believed to comprise around 10% of that business.
The parties expect to execute a definitive agreement by March 31, 2016.
The deal includes a lump sum payment by Sony Corporation of America of approximately $733 million as well as distributions previously committed to by Sony/ATV to be paid to the Estate.
The payment also reflects certain contractual and accounting adjustments related to the Sony/ATV joint venture and other commercial opportunities involving Sony and the Estate.
The sale is the culmination of a process that began in September 2015 when Sony exercised a right to buy that has existed since the joint venture was formed by Michael Jackson and Sony in 1995.
The closing of the transaction is subject to regulatory approvals.
Kaz Hirai, Sony Corp
“The entertainment businesses have long been a core part of Sony and are a key driver of our future growth,” said 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.”
“This transaction further allows us to continue our efforts of maximizing the value of Michael’s Estate for the benefit of his children,” said John Branca and John McClain, Co-Executors of the Estate.
“It also further validates Michael’s foresight and genius in investing in music publishing.
“His ATV catalogue, purchased in 1985 for a net acquisition cost of $41.5 million, was the cornerstone of the joint venture and, as evidenced by the value of this transaction, is considered one of the smartest investments in music history.”
“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,” said Michael Lynton, CEO of Sony Entertainment, Inc.
Michael Lynton, Sony Entertainment
“This acquisition will enable Sony to more quickly adapt to changes in the music publishing business, while at the same time continuing to be an unparalleled leader in the industry and a treasured home for artists and writers.
“We want to express our gratitude to the Estate of Michael Jackson and to the Jackson family for their years of partnership. All of us at Sony look forward to continuing to work with the Estate to further Michael Jackson’s legacy in many different ways.”
The Jackson Estate will also retain its interest in other music assets, including all of Michael Jackson’s master recordings as well as Mijac Music, the publishing company that owns all of the songs written by Michael Jackson.
Sony/ATV manages and/or owns songs performed by artists including The Beatles, Michael Jackson, Taylor Swift, Ed Sheeran, James Brown, Elvis Presley, Lauryn Hill, Oasis, Eminem and many more.Music Business Worldwide