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| © Provided by Variety |
Terms of the deal call for Sony to pay $733 million for Jackson’s 50% stake in Sony/ATV Music Publishing, as well as previously announced distributions, with payments totaling $750 million.
Sony Corp. chief Kaz Hirai used the announcement to reiterate Sony’s commitment to holding on to its entertainment assets, at a time when M&A speculation is running high throughout the media biz.
“The entertainment businesses have long been a core part of Sony and are a key driver of our future growth,” said Hirai in a statement. “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.”
Sony/ATV Music Publishing, established in 1995 as a joint venture between Sony and Jackson, touts itself as the world’s leading music publisher. Together with EMI Music Publishing, Sony/ATV owns or administers more than 3 million copyrights; it also controls “New York, New York,” “All You Need Is Love,” “You’ve Got a Friend,” “Moon River,” “Jailhouse Rock,” “The Mission Impossible Theme,” “Ain’t No Mountain High Enough,” “Over the Rainbow,” “Stand by Me” and “I Heard It Through the Grapevine.”
The companies said in a joint release Monday that the sale is the culmination of a process that began in September when Sony exercised its right to purchase the other partner’s interest — a right that has existed since the joint venture was formed by Jackson and Sony in 1995.
The parties expect to reach a definitive agreement by March 31, and the closing is subject to certain conditions, including regulatory approvals.
Sony said the transaction will have no material impact on its consolidated results forecast for the fiscal year ending March 31. It also said the impact on Sony’s results for the fiscal year ending March 31, 2017, is currently being evaluated.
The estate said the transaction will not affect its continuing interests in other music assets, including all of Jackson’s master recordings as well as Mijac Music, the publishing company that owns all of the songs written by Jackson as well as songs by some of his favorite songwriters and artists that were acquired during his life. The estate will also retain its ownership interest in EMI Music Publishing.
“This transaction further allows us to continue our efforts of maximizing the value of Michael’s Estate for the benefit of his children,” said co-executors John Branca and John McClain. “It also further validates Michael’s foresight and genius in investing in music publishing. His ATV catalog, 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.”
Sony/ATV Music represents the copyrights of the Beatles, Leonard Cohen, Bob Dylan, Marvin Gaye, Michael Jackson, Carole King, Kraftwerk, Joni Mitchell, Willie Nelson, Roy Orbison, Queen, the Rolling Stones, Richie Sambora, Sting, the Supremes, Wyclef Jean, Hank Williams and Stevie Wonder. Current artists include Akon, Alicia Keys, Lady Gaga, P!nk, Shakira, Ed Sheeran, Sam Smith, Taylor Swift, Kanye West and Pharrell Williams.
“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. “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.”
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