Sony to buy Jackson’s 50% stake in joint music venture
by Anousha Sakoui,
2016-03-16 05:52:54.0
LOS ANGELES — Sony is paying $750m to the estate of Michael Jackson for the late pop star’s stake in their joint music business to take control of a catalogue that includes artists Sting and Alicia Keys.
The terms call for Sony to make a lump sum payment of $733m for Jackson’s 50% stake in Sony-ATV Music Publishing, as well as future distributions, according to a statement.
Talks on a deal began in last September, when Sony exercised its right under their joint venture to buy out Jackson’s estate.
The deal consolidates Sony’s control over a catalogue of almost 4-million songs as music industry revenues shift increasingly to subscription services offered by Apple, YouTube and Spotify.
The Tokyo-based company is sharpening its focus on network services including game and movie streaming centred on its PlayStation console.
"The value of music assets is increasing with the growth of streaming," said Damian Thong, an analyst at Macquarie Group in Tokyo. "Sony is actually paying less than the stake is worth."
Sony has said the growth of streaming services will help bolster revenues in the music business to as much as $5.2bn in financial 2017. The company expects paid subscribers to account for 60% of the market next year, outpacing downloads by 22% and digital radio by 5%.
Its shares closed 0.2% lower at ¥2,794 in Tokyo on Tuesday. The stock is down 6.9% this year.
The estate of Jackson, who died in June 2009 at age 50, will continue to have interests in the music industry.
Those include all of the pop star’s master recordings and the publishing company that owns all of the songs he wrote. The estate will also retain its interest in EMI Music Publishing.
"This transaction further allows us to continue our efforts of maximising the value of Michael’s estate for the benefit of his children," said John Branca and John McClain, joint executors of the estate.
The catalogue was purchased in 1985 for $41.5m, they said.
Documents leaked by hackers who broke into Sony Entertainment’s computers in 2014 showed that executives at the company were weighing the future of the joint venture.
"The entertainment businesses have long been a core part of Sony and are a key driver of our future growth," said CEO Kazuo Hirai. "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."
Bloomberg
Pop superstar Michael Jackson performs during a concert in Sao Paulo, Brazil, in this October 15, 1993 file photo. Jackson's album "Thriller" is still breaking barriers more than 30 years after its release and six years after the pop superstar's death, becoming the first album in history to cross the 30 million mark in U.S. sales, record industry officials said December 16, 2015. Picture: REUTERS/Marcos Pacheco/Files
LOS ANGELES — Sony is paying $750m to the estate of Michael Jackson for the late pop star’s stake in their joint music business to take control of a catalogue that includes artists Sting and Alicia Keys.
The terms call for Sony to make a lump sum payment of $733m for Jackson’s 50% stake in Sony-ATV Music Publishing, as well as future distributions, according to a statement.
Talks on a deal began in last September, when Sony exercised its right under their joint venture to buy out Jackson’s estate.
The deal consolidates Sony’s control over a catalogue of almost 4-million songs as music industry revenues shift increasingly to subscription services offered by Apple, YouTube and Spotify.
The Tokyo-based company is sharpening its focus on network services including game and movie streaming centred on its PlayStation console.
"The value of music assets is increasing with the growth of streaming," said Damian Thong, an analyst at Macquarie Group in Tokyo. "Sony is actually paying less than the stake is worth."
Sony has said the growth of streaming services will help bolster revenues in the music business to as much as $5.2bn in financial 2017. The company expects paid subscribers to account for 60% of the market next year, outpacing downloads by 22% and digital radio by 5%.
Its shares closed 0.2% lower at ¥2,794 in Tokyo on Tuesday. The stock is down 6.9% this year.
The estate of Jackson, who died in June 2009 at age 50, will continue to have interests in the music industry.
Those include all of the pop star’s master recordings and the publishing company that owns all of the songs he wrote. The estate will also retain its interest in EMI Music Publishing.
"This transaction further allows us to continue our efforts of maximising the value of Michael’s estate for the benefit of his children," said John Branca and John McClain, joint executors of the estate.
The catalogue was purchased in 1985 for $41.5m, they said.
Documents leaked by hackers who broke into Sony Entertainment’s computers in 2014 showed that executives at the company were weighing the future of the joint venture.
"The entertainment businesses have long been a core part of Sony and are a key driver of our future growth," said CEO Kazuo Hirai. "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."
Bloomberg
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