Sony will pay Michael Jackson's estate $750 million for its stake in Sony/ATV Music Publishing catalog. Both Sony and Jackson's estate made this announcement Monday, according to the New York Times.
In 1995, Sony and Michael Jackson started a joint music catalog, which would be called Sony/ATV. Jackson paid $41.5 million to acquire ATV, and then paired with Sony in a joint venture.
The catalog serves music publishing rights for a recording's lyrics and music. The rights will allow the owner of the songs to decide how radio, TV, and cinema can use their music and lyrics. Also, it helps the artist get paid when their songs are used in shows, movies, or on the radio.
This catalog is a huge presence in the music industry and has over 1 million copyrights. Sony/ATV's copyrights include ones for songs by the Beatles (250 Beatles songs, in fact!), Taylor Swift, and Lady Gaga.
In October 2015, Sony notified the Jackson estate that it would start a buy-sell provision in its joint venture deal, meaning that Jackson's estate or Sony could buy the other's half of the catalog. It wasn't clear which half would purchase the other until Monday, when Jackson's estate agreed to see its stake in exchange for $750 million.
According to CNN, this should help erase Michael Jackson's debt. The singer was in debt for $500 million at the time of his death in 2009, and with this move, Sony will also benefit from strengthening its reputation as a music publishing company. Technically, it's a win-win.
In addition to the deal, Sony has agreed to let Jackson's estate hold control over his recordings, as they will not be included in the new Sony/ATV deal. Mijac Music will also remain with the estate. The company owns all of Jackson's songs and other works.
This will surely make a huge impact in the music industry, as Jackson was one of the first to emphasize the significance of music publishing rights.