Thirty years ago, Marty Bandier was preparing to offer an eccentric Australian billionaire $50 million for ATV, the music publishing catalogue home to the Beatles and others. He probably would have succeeded in purchasing it--had it not been for Michael Jackson.
Bandier learned this for himself when he arrived in London and met the aforementioned mogul, Robert Holmes a Court, who informed him the catalogue was off the market. Bandier immediately upped his offer by $500,000, but was told another bidder had included something unique: a charity performance at Holmes a Court's home in Perth. The well-connected Bandier pressed on, saying he could bring just about any big act to Australia.
"No, no, you don't understand," said Holmes a Court. "I'm selling this to Michael Jackson."
Full Coverage: The 13 Top-Earning Dead Celebrities
Bandier, who told me this anecdote while I was reporting my book Michael Jackson, Inc., eventually linked up with his desired catalogue: today, he's the chief of
Bandier reportedly sent a memo to his employees earlier this month saying Sony had triggered a clause in its agreement with the Jackson estate that could lead to one side buying out the other, or to an outside buyer coming in and purchasing half or all of Sony/ATV sometime in the coming months.
When I contacted Sony/ATV last week and asked for a comment from Bandier regarding the state of the sale process, representatives referred me to a Sony; a spokesperson there declined to comment. Some have speculated that the Japanese conglomerate is looking to sell its stake for the same reason it sold its New York headquarters for $1.1 billion in 2013: to raise cash.
John Branca, the co-executor of Jackson's estate, told me that it's too early to know who all the bidders would be, but that the estate would be among them. Said Branca: "We intend to buy the company."
That's a remarkable statement, considering the state of Jackson's finances in the years before he passed away. The singer had accumulated nearly half a billion dollars in debt, most of it high-interest and taken out against his half of Sony/ATV.
But since his death in 2009, the Jackson estate has pulled in over $1 billion in pretax earnings, enough to pay off his personal debts and more. He earned $115 million over the past year alone, easily garnering him the top spot on our Halloween-spooky list of Top-Earning Dead Celebrities.
"This major disaster gave him a chance to shine," says Josh Rubenstein, National Chair of Trusts and Estates at Katten Muchin Rosenman LLP. "Jackson's untimely and dramatic death, with all the drama surrounding it, also creates this allure."
With that sort of earning power continuing in seeming perpetuity, Jackson's estate could conceivably work out financing, perhaps with a partner, to acquire Sony's stake of its joint venture. And if recent trends in the music business cause the price tag to drop a bit, the chances improve.
"There is certainly concern due to the low royalties music-steaming companies are paying to music publishers and songwriters," says Dale Kawashima, a former president of ATV who now runs SongwriterUnvierse. "There's great value in buying a great company like Sony/ATV, but there's some uncertainty in terms of what the royalties will be moving forward."
Another issue that could ding the catalogue's value is the potential reversion of Lennon-McCartney copyrights. In the U.S., songs signed to publishers after 1972 revert to the creator after 35 years; for songs signed before then, the term is 56 years, which would put some of the Beatles' songs in play in the not-so-distant future.
That said, it's hard to know what sort of deals might have already been signed behind closed doors to extend Sony/ATV's relationship with McCartney and/or the estate of Lennon. Either way, the aforementioned scenario would be for the U.S. only, and the Beatles certainly enjoy tremendous popularity around the world.
Sony/ATV's roster is also stacked with other superstars from Taylor Swift to Eminem, with new ones being added nearly every day (most recently a cappella sensation Pentatonix). Potential bidders will likely use the 2011 sale of Warner Music Group, which valued the company at about $3 billion--roughly two-thirds of that coming from its publishing division--as a comparable deal.
Whatever happens to Sony/ATV, one thing seems certain: it will underscore Jackson's little-known business savvy. He made his share of financial blunders, to be sure. But in death, it appears he's either in line to make a billion-dollar purchase or earn a billion-dollar windfall. Watching this unfold should be nothing short of a thriller.
Full Coverage: The 13 Top-Earning Dead Celebrities
For more about the business of music, check out my Jay Z biography, Empire State of Mind, and my other book, Michael Jackson, Inc. You can also follow me on Twitter and Facebook.
