Sony is going to pay Michael Jackson’s estate $750 million to claim the remaining half of Sony/ATV Music Publishing and have full control over the music publishing company.
Sony has signed a memorandum of understanding to buy out Jackson estate’s 50 percent stake in Sony/ATV Music Publishing that began 21 years ago as a joint venture between the late King of Pop and Sony.
A report from Billboard, which first shared the news, says that the definitive agreement is expected before the month ends. The deal closure is likewise believed to come either in late 2016 or early 2017. It also reports that this deal began in September last year.
The music publishing company now owns and administers more than 2.8 million copyrights, which include songs by Justin Bieber, Adele and Taylor Swift.
The deal is not going to affect other music assets of the late pop star's estate, including its 10 percent stake in EMI Music Publishing along with Mijac Music. The latter owns the songs created by Jackson plus his songs written by other writers. Sony serves as EMI's administrator and owns 29 percent of the music publishing company.
"This transaction further allows us to continue our efforts of maximizing the value of Michael's estate for the benefit of his children," said Jackson estate co-executors John McClain and John Branca. "It also further validates Michael's foresight and genius in investing in music publishing."
They said that Jackson's ATV catalog, bought in 1985 for $41.5 million, was among the "smartest investments" in the history of the music industry.
Sony Entertainment boss Michael Lynton said that the acquisition will allow the company to "more quickly adapt to changes in the music publishing business."
He went on to say that this will enable the company to continue to be the leader in the industry and a home for artists and writers.
In the meantime, Damian Thong, an analyst at Macquarie Group Ltd. in Tokyo, believes that the value of music assets is rising with the expansion of streaming.
"Sony is actually paying less than the stake is worth," Thong told Bloomberg.
