Sony Music buys stake in Michael Jackson catalog, rights worth more than $1.2B

Sony Music Group has reached a deal to buy half of its music assets in what could be the largest valuation of a musician’s music assets ever Michael JacksonThe deal for Sony’s catalog of published and recorded masterworks values ​​the music assets at more than $1.2 billion, sources said. Other sources say it could be worth as much as $1.5 billion. At those valuations, Sony would pay at least $600 million for the legendary rights for its stake.

That means the Jackson deal, completed late last year, valued Jackson at a higher valuation than the previous $1.2 billion. Queen yes Currently looking forSources say that while the Queen’s valuation includes royalties from income streams outside of masters and publishing, including from Freddie Mercury biopic, bohemian rhapsodyAs well as theatrical productions using Queen’s music, Sony’s agreement with the Michael Jackson Estate does not include royalties from Broadway plays and other theatrical productions featuring Jackson’s music.

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However, the deal may involve more than just Jackson’s music.Sources say the current deal includes non-Jackson-written songs from his Mijac publishing catalog, which also includes about 250 songs cunning stone family Published catalog and iconic songs written and/or performed by Jerry Lee Lewis, Jackie Wilson, Curtis Mayfield, ray charles, Percy Sledge and Dion.

In February last year, following type Jackson’s trade is being negotiated, advertising billboard It is estimated that the iconic artist’s estate earned approximately $75 million per yearThose assets include ownership of master recordings, a publishing share of Jackson’s songs, his Mijak publishing catalog, as well as merchandise income and royalties from theatrical performances featuring Jackson’s music. advertising billboard It’s estimated that Jackson’s recording and publishing assets alone brought in an estimated $47.2 million to the estate out of a $75 million budget; Mijak likely brought in another $5 million to $8 million annually. income.

However, Jackson’s estimate doesn’t take into account his seemingly growing popularity as the streaming market expands.

Sales and streaming numbers for Jackson’s music have grown steadily, from 1.07 million album-equivalent units in 2020 to 1.47 million in 2023, a 37% increase over the past three years, according to Luminate. This exceeds the 22.9% overall growth in album consumption units in the U.S. music market. Outside the U.S., Jackson is arguably more popular. In 2023, his music consumption grew by 38.3%, reaching 6.5 billion on-demand streams, up from 4.7 billion streams in 2021.

next year, one jackson biopic is called Michael will be released, potentially fueling further growth in his fan base, boosting consumption and triggering more revenue flows to his estate and any other rights holders.

The mastermind behind all the financial returns brought about by the inheritance is the lawyer. John Blanca and A&R director John MacLean – is expected to remain involved as a co-executor.

Sources say the Sony deal also retains a stake in Primary Wave, which is believed to account for about 10% of Jackson’s publishing assets.

Over the years, Sony has paid more than $2 billion to Jackson’s estate in major deals that went beyond allocating royalties for his records and songs. In 1991, the company purchased the first half of Sony/ATV for $100 million; ATV Music was a catalog Jackson purchased in 1985 that included The Beatles catalog and other popular songs. The company was merged into Sony’s music publishing business, becoming Sony/ATV, with Sony and Jackson each owning 50% of the company. In 2016, the company paid $750 million to acquire the remaining 50% of Sony/ATV.It also paid $287.5 million for the Jackson estate’s share in the consortium that owned EMI Music Publishing in 2018, plus dividends during the period it owned the assets, totaling Approximately US$1.6 billionNow, the latest deal adds another $600 million or more, pushing the total past the $2 billion mark.

Sony has been aggressively making acquisitions over the past year.Last year, it was also reported that it acquired the so-called significant minority stake At Latin record label and management company Rimas Entertainment, which launched bad bunnyAccording to sources at the time, the overall deal for the brand and management was expected to be valued at approximately $300 million.

In May 2023, Sony also Get the RECORDS directory from Barry Weiss, Ron Perry and Matt Pincusacquired a stake in the latter at a $100 million valuation; then entered into a 50/50 deal with Weiss, which retained control of the brand’s recent product catalog.

Representatives for Sony, the Jackson estate and Primary Wave declined to comment.

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