By now you should have all heard about Michael Jackson’s death. Although it is tragic that such a pop icon could die at such a young age, so much of the news coverage seems to be focusing on the bizarre aspects of Michael Jackson’s life, what appears to be a serious drug addiction and his financial debts. When Michael passed last week, he died in debt to the tune of approximately $500 million, at least if the reports we are hearing turn out to be accurate. What seems to have started Michael’s financial decline was when in 1993, he paid the family of 13 year old Jordy Chandler, $22 million dollars to settle the lawsuit they had pending against him. From that point forward he was not really viewed the same, his last album was a failure and yet his taste for expensive things and his ability to spend became legendary. But did you know that in 1985, Michael Jackson paid $47.5 million dollars to purchase and ATV Music Publishing, which happened to own the copyrights of more than 200 songs written by the Beatles’ John Lennon and Paul McCartney? While Michael Jackson will likely be remembered for many things, perhaps right now we should focus on what he did that made him the icon he was. There will be plenty of time later for the sordid details, and the unsavory side of the pop legend, but there were aspects to Michael’s life that demonstrate him to be almost a Renaissance man; namely Michael the inventor, Michael the King of Pop and Michael the shrewd businessman who say the value of owning perhaps the most lucrative copyright portfolio of all time.
Few people know that Michael Jackson outbid even Paul McCartney himself as well as John Lennon’s widow, Yoko Ono, to own the coveted copyrights to the Beatles’ music. By owning the copyrights to these timeless songs, Michael earned royalties every time Beatles songs were either played on the radio or performed or sold in stores. While so many are star-struck by musicians and performers, the reality is that the money is in owning the copyrights. Most musicians will never get to the point where they can own their own copyrights free and clear. Record companies lock musicians and performers up in tight, multi-album deals where the ownership of the publishing rights resides with the record label. Only when a musician, band or performer has made it big, fulfilled their multi-album deal and still remains relevant is there much of an opportunity to actually own the lion share of the most lucrative asset in the entertainment business – the publishing rights to the music. So while so many are remembering Michael Jackson in unfavorable ways presently, his foresight to pay what was no doubt a staggering amount of money in 1985 for the Beatles’ collection was without doubt the best business decision he ever made, and perhaps the best business decision ever made by an entertainer.
In 1995, Michael merged his ATV collection (minus the rights to his own music) with that of Sony, creating what is now known as Sony/ATV. In late 2005, being in financial difficulty, Jackson provided Sony an option to buy 50% of his one-half interest in Sony/ATV and Sony gained more control over Sony/ATV. (See NY Times and USA Today) It does not appear as if Sony ever exercised its option to buy 50% of Jackson’s interest, although reports on this range from clearly contradictory to vague. What reports do agree on is that at least 50% of his interest in Sony/ATV, presumably the 50% he retained complete control over, was pledged as collateral for a $270 million to $300 million loan. Reports vary widely with respect to the value of Sony/ATV, ranging from $1 billion to $3 billion. One report estimates the value at $30 billion, but that was likely a typo copy of the $3 billion figure. I cannot imagine the catalog is worth that much, but if the $3 billion figure is accurate that would mean that even with Sony have rights to half of Jacksons ownership interest there would be enough value in the remaining 25% interest in Sony/ATV to cover Jackson’s reported debts and still have several hundred million dollars left over. So expect a fight with much more detail to come.
With his death however, Sony plans to keep their rights and control over the Beatles songs. Sony/ATV holds the rights not only to more than 200 songs written by John Lennon and Paul McCartney, but also has rights to songs written by many others as well. It is said that Michael had planned to leave the rights to Paul McCartney in a will because some say that Michael’s purchase of ATV caused some strain in their once close friendship which ultimately led to the end of their friendship. There are rumors of a will, and the tabloid media as well as some popular media outlets are starting to question whether the will is legitimate and guessing whether it can be authenticated. The 24/7 coverage of the death of Michael Jackson is already leading to speculation, rumor and innuendo, and that is likely only going to get worse in the days, weeks and months to come.
Currently Sony/ATV owns or administers over 600,000 copyrights held in the works of other artists, some of which are very well known and current and others which are less known, such as Beck, Brooks & Dunn, Leonard Cohen, Neil Diamond, Bob Dylan, The Everly Brothers, Fall Out Boys, Jimi Hendrix, John Mayer, Joni Mitchell, Graham Nash, Willie Nelson, Roy Orbison, Linda Perry, Richie Sambora, Kraftwerk, Shakira, Akon, Wyclef Jean, KT Tunstall, and Diane Warren. There is no doubt, however, that the Beatles collection is the “straw that stirs the drink,” to quote another famous Jackson – Reggie Jackson, which Reggie said shortly after he became a Yankee. Maybe there is just something in the name “Jackson” that means larger than life.
Join the Discussion
21 comments so far.
Gene QuinnOctober 14, 2012 12:36 pm
Here we go again. You seem to want to pretend that the article written is incorrect when it is completely factually correct. Nowhere in the articles does it say or suggest that the Beatles were stripped of any performer rights. It is, however, correct to say that Michael Jackson did purchase the copyrights. That is a factually accurate statement regardless of whether you want to take issue with the statement.
I think what is going on here is that people just don’t understand what a copyright is and what publisher rights are. Publishers own the copyrights. There can be many people who receive points or residuals by agreement.
Warlock AsylumOctober 13, 2012 08:31 pm
It is true that Michael Jackson obtain the “publishing rights” to much of the Beatles catalog. however, Paul McCartney said in an interview that after Jackson obtained the publishing rights to many of the Beatles songs, he did in fact, receive the same share as a songwriter, as he did prior to Jackson obtaining the publishing rights.
I agree with the author of this work that Michael Jackson purchase of the Beatles’ music was a great business move. It is the publishing rights that were purchased. The Beatles still receive royalties from their music.
Sobha SinghNovember 5, 2011 08:15 am
I’m a simple man, but reading the article and the comments made me cringe. to even consider to achieve 5% of what MJ did would be outstanding; charitable work, song writing, choreography, advertising, business acquisition, etc etc. No matter what, he holds so many records you could write a book about him just on that.
Yet what gets me is, whatever is said in the media…thats what is followed. The US and UK have no respect when it come to fame, and the public are blind to see its all money making.
R.I.P Michael, thanks you for all your hard work, and please stop these fools writing about things they will never have the answer too.
DeniseApril 26, 2011 04:07 am
I heard that Michael Jackson’s kindness was taken for weakness so they tried and later the truth did come out about the Welfare Queen of a mother who used her ill son suffering from cancer, that Michael Jackson took time to visit and make a wish come true, when no one else gave a care, and findings later reported briefly that the mother had a pattern of being deceitful with money. Michael Jackson was found not guilty after he fought back. However, as per usual, anything news that put Michael in a positive way, never received over a day’s attention.
production engineerDecember 9, 2010 10:34 pm
Merry Christmas, everyone! Yay.
Gene, thank you for this article. Would you please comment on BG’s comment (# 14) if you have any info? I’m curious what became of that renegotiation.
Michael is quirky, yes, but he didn’t abuse those kids. There were two major cases against him. The first one, he settled out of court for fear of defamation. The second case angered him, so he chose to fight it in court, regardless of the defamation, to send a clear message to anyone else trying to pull that sort of thing. One of the children (I don’t remember which case) later admitted that the story was completely fabricated. However, this received almost no media attention. I believe the story ran for one day (I saw it on the news once), and that was the last I heard of it.
Michael, may you moonwalk in heaven. See you there, buddy.
Gene QuinnAugust 9, 2010 06:49 pm
Why don’t you enlighten all of us as to the “real” facts.
I would also point out that it is likely legally impossible to defame Michael Jackson. His affinity for children in a non-healthy way is well documented. It is impossible to defame someone when they have a negative reputation, and by and large that is the reputation of Michael Jackson whether we choose to acknowledge it or not. He was a brilliant artist and a quirky individual. To divorce his quirks from the man is to ignore truth.
The facts in this article are widely known to be true, so I wait with baited breadth at the real story. Please also provide your sources so they can be verified by all those reading.
KendrickAugust 9, 2010 05:05 pm
I happened upon this article while looking for information on Jackson’s Anti-Gravity device. This article would make interesting reading in such Tabloid Publications as TMZ, National Inquirer, The Sun or some other such gutter rag which rely on maligning to garner attention. After having read Gene Quinn’s intelligent and highly informative articles I was amazed at Renee C. Quinn’s injection of personal opinion, hearsay and a subtle attempt gone wrong to defame a dead man.
To add insult to the readers, the writer has not done her fact checking on the negotiation and Jackson’s acquisition of the Catalog. This smacks of copy & paste journalism, a lazy writer rather than a worthwhile contributor to a professional organization providing accurate and informative business information. On a scale of zero to five, this article gets a zero. Content = zero, Accuracy = zero. Professionalism = less than zero.
BGMarch 19, 2010 07:54 am
Thank you for your very informative article on Michael Jackson and the Beatles’ Copyrights. It had been said that Michael Jackson would regain control of his masters held by Sony in 2011, although various reports on the actual date have varied. At this point in time Sony has the publishing and distribution rights to Jackson’s music as I understand it. There has been a new deal between Sony and the Estate of Michael Jackson within the last few days, which covers a period up to at least 2017. I have very little knowledge of copyright or entertainment law but this deal seems to mean either one of two things. The first is that Sony’s publishing and distribution rights over Michael Jackson’s music recorded while Jackson was under contract to Sony will continue until at least 2017 and/or Sony did indeed take up the option to purchase any remaining shares Jackson held in Sony/ATV after his death. Would be interested to have your opinion on this. Thank you.
asfSeptember 11, 2009 03:26 pm
This person states a good case, but he failed to note that Jackson owns the copyrights to the Beatles library. I hate to say this, but MJ is probably receiving royalties from the Beatles “1”. I know that comes as a shock to some. But you must also realize that it was Paul McCartney who urged Jackson to buy copyrights, though Paul didn’t think that he’d buy the Beatles.
by the way…..Chris: what do you mean hes not the king of pop? well MJ better than the beatles thats for sure! MCIAHEL JACKSON IS THE KING OF POP!! DEAL WITH IT!!!!!
Gene QuinnAugust 5, 2009 01:26 pm
In the US the songwriters do not have the ability to veto the ability to use the song. They do have a right to share in proceeds, but no veto power.
KabraunAugust 5, 2009 02:29 am
Here in the US, can the publishing rights-holders decide whether a song can be used, say, in a hemorrhoid commercial? -Or do the original songwriters still have a right to veto the use?
SoCalGalJuly 28, 2009 08:10 pm
Chris, you are so out-numbered that your opinion doesn’t even matter. Not even a little bit.
ChrisJuly 19, 2009 09:44 pm
sorry, not the king of pop in my book, not by a long shot.
Caramoan Travel Tour PackageJuly 8, 2009 11:34 am
Michael Jackson would still be remembered as the only King of Pop. We would surely miss him.
Julius TajiddinJuly 6, 2009 06:15 pm
McCartney doesn’t need Yoko Ono to do anything regarding the songs he and Lennon wrote together. From what I hear is that when Lennon died the renewal periods that came into existence long after Lennon’s death went to Yoko and not Sony/ATV. Copyright protection has term limits regardless of a contract. When these songs went into ATV that didn’t subvert the term period for protection. Such contracts more than likely had renewal clauses, however. But Lennon’s renewal clauses didn’t materialize because of his death. The copyright law, at least in the US, grants renewals to the author or the author’s surviving family member. Hence, John’s complete share reverted to Yoko and his children. The statute overrides the contract because Yoko has the protection of the law in this case.
Gene QuinnJuly 5, 2009 11:52 am
Excuse me my friend, but nothing I wrote contradicts that, and you are simply wrong to assert that “holding the publishing rights to songs doesn’t really give the rightsholder much Beatles “power” over those songs.” The owner of the publishing rights has substantial power over the songs.
alloJuly 4, 2009 09:20 pm
Excuse me my friend, but look the sources:
Sony/ATV = only publishing rights. (it’s all)
Gene QuinnJuly 4, 2009 08:40 pm
Thanks for your very long comment. You start off by saying I am wrong, which is, of course, not correct and I suspect you know that.
You say: “First off, when we talk about someone owning the “rights” to songs, what we’re discussing are publishing rights.”
And then you go on to explain all of the various rights and who actually receives money from songs. But where exactly do you think the rights originate from? The copyrights, of course.
You say: “The key point here is that holding the publishing rights to songs doesn’t really give the rightsholder much Beatles “power” over those songs.”
No where in the article does it say that the owner of the publishing rights has absolute control over the songs. I will point out though that you seem to be located in France, and the rights of artists is much greater in France than in the US, perhaps that is why you don’t realize that owning the publishing rights is not only where the money is at, but also where the control lies.
In the CNET article we cited it explained:
“What that means is that if you want to record and release a version of “Help,” then you need to compensate Sony/ATV. A filmmaker wishing to add a recording of the Beatles performing the song to a soundtrack must negotiate with EMI and Apple Corp.
In the latter scenario, Sony/ATV would collect a share of that deal and could veto it since the company owns the copyrights to the music and words. That typically doesn’t happen, and to be clear: Sony/ATV has never stood in the way of a digital deal for the Beatles catalog, according to sources with knowledge of the negotiations. Indeed, the sources said that Jackson and Sony/ATV welcomed it.”
Based on my experience in the recording industry (yes, I was VP and General Counsel of an independent record label for a time), seems to be an accurate statement.
So much of what you seem to have problems with are things that our article didn’t discuss, didn’t imply and which we actually got right.
alloJuly 4, 2009 08:23 pm
” Few people know that Michael Jackson outbid even Paul McCartney himself as well as John Lennon’s widow, Yoko Ono, to own the coveted copyrights to the Beatles’ music.”
First off, when we talk about someone owning the “rights” to songs, what we’re discussing are publishing rights.
Typically, songwriters assign the publishing rights for their songs to music publishing companies, who perform a number of marketing and promotional services to generate revenue for the songwriters they represent:
* Exploitation: One of the more important functions of song publishers is “plugging” songs — getting artists interested in recording a songwriter’s work. Your song doesn’t make any money if nobody uses it, and song plugging was an especially important aspect of the publishing business prior to the 1960s, when many songwriters were not also performers and primarily supplied tunes for other singers.
* Licensing: Music publishers also administer the granting and collection of royalties for various types of licenses:
o Mechanical licenses: Songwriters receive royalties whenever someone sells recorded versions of their songs. If a songwriter records his own work, he receives royalties from his record label; if someone else records a cover version of his song, the songwriter receives royalties from that artist’s record label.
o Synchronization licenses: Songwriters receive royalties when their songs are sychronized to visual images, typically for use in films, television programs, and commercials.
o Print licenses: Songwriters receive royalties for the sale of their songs in printed form, generally either as sheet music or entries in songbooks. Publishers who wish to quote or include song lyrics in a printed work must also obtain permission (and negotiate fees) with whoever holds the publishing rights to those songs.
o Performing rights licenses: Songwriters receive royalties when their songs are performed live for profit or broadcast on the radio, although these licenses are usually administered by performing rights societies such as ASCAP or BMI rather than publishing companies themselves.
The key point here is that holding the publishing rights to songs doesn’t really give the rightsholder much Beatles “power” over those songs. The rightsholder has some latitude in negotiating royalty rates and determining who may use a song in film or print its lyrics, but that’s about it. The chief benefit to owning the publishing rights of songs is that standard publishing agreements call for royalties to be split 50-50 between the publisher and the songwriter(s), so owning the publishing rights to popular songs can be a lucrative form of income.
The Beatles assigned their publishing rights to Northern Songs, a company created by Beatles manager Brian Epstein and music publisher Dick James in 1963. The Beatles (particularly John Lennon and Paul McCartney) were soon earning so much money from songwriting royalties, record sales, concert performances, and merchandise licensing that they were losing over 90% of their income in taxes, and they were advised to find a way of receiving their revenue in the form of capital gains rather than income (the former being taxed at a much lower rate), such as selling their song rights or putting their money into a public company. The Beatles opted for the latter route, and Northern Songs went public on the London Stock Exchange in 1965. Initially, Lennon and McCartney each retained 15% of the shares, George Harrison and Ringo Starr held 1.6% between them, Brian Epstein’s NEMS company was assigned 7.5%, and Dick James and Charles Silver (Northern Songs’ chairman) retained a total of 37.5%. In 1969, however, the Beatles lost a buyout bid for control of Northern Songs when Dick James and Charles Silver sold their share of the company to Sir Lew Grade, head of Associated Television Corporation (ATV).
In 1984, ATV’s 4,000-song music catalog was put up for sale, and Michael Jackson (who had coincidentally been introduced to the benefits of song ownership
by Paul McCartney himself) eventually outbid all other prospective buyers for it, including Paul McCartney, who wanted to buy back the rights to the Beatles’ songs but was apparently unable or unwilling to raise enough money to pay for the thousands of other songs in the ATV catalog as well. So, for $47.5 million, Jackson acquired the publishing rights to most of the Beatles songs. (The four songs issued on the Beatles’ first two singles — “Love Me Do” b/w “P.S. I Love You” and “Please Please Me” b/w “Ask Me Why” — were not part of the package since they were published before the formation of Northern Songs, and the rights to those songs are now controlled by McCartney’s MPL Communications. ATV also did not own the rights to George Harrison songs published after Harrison’s songwriting contract with Northern Songs expired in 1968, but they did hold the rights to various other Lennon-McCartney songs not recorded by the Beatles.)
Another key point here is that although Michael Jackson received 50% of the royalties generated by Beatles songs by virtue of his ownership of the publishing rights, Paul McCartney and John Lennon (and Lennon’s estate, now that he’s dead) have always received their 50% songwriter’s share of the royalties for all Lennon-McCartney songs. Neither ATV’s nor Michael Jackson’s acquisition of Northern Songs changed that, and Michael Jackson did not receive royalties that would otherwise be going to the Beatles had he not acquired the publishing rights to their songs (except that, obviously, if Paul McCartney had managed to outbid Jackson for the publishing rights to the Beatles catalog, he and Lennon’s estate would be splitting 100% of the royalties rather than 50%).
As a closing note, we should mention that Sony Corp. paid Michael Jackson $95 million in 1995 to merge ATV with Sony and form Sony/ATV Music Publishing, a 50-50 joint venture, so it’s probably more correct to say that Jackson owned half the rights to the Beatles catalog.
Hilburn, Robert. “The Long and Winding Road.”
Los Angeles Times. 22 September 1985 (Home; p. 60).
Horn, John. “Jackson Sells Beatles Songs to Sony.”
Associated Press. 9 November 1995.
McCabe, Peter and Robert D. Schonfeld. Apple to the Core.
New York: Simon and Schuster, 1972. ISBN 0-671-80353-0 (pp. 141-162).
Gene QuinnJuly 2, 2009 04:35 pm
Interesting point of view. By anyone’s definition when one party bids more than another party they “outbid” that party. Not sure what your problem is, but I did get the facts straight.
As far as McCartney not being able to do anything without Yoko Ono, that is absurd. McCartney has the right to acquire whatever assets he wants even if Yoko Ono tells him “no.”
T. veeJuly 2, 2009 04:29 pm
To get the facts straight. Jackson didn’t “outbid” McCartney and Ono in an all out bidding war. McCartney negotiated a fair amount and Yoko Ono decided to with draw the bid because of ‘astrological’ reasons. McCartney couldn’t make a single move without Yoko Ono who is the executor of Lennon’s estate. Jackson walked away with it.