Sony Closing In on Michael Jackson’s EMI Catalog Ownership

  • Michael Jackson’s estate owns 10% of EMI Music Publishing
  • EMI is now valued at $4.75B

In one of the biggest music deals in years, Sony (SNE -0.13%) will now own nearly 90% of the multibillion dollar EMI Music Publishing catalog. The remaining 10% of the catalog is owned by the estate of Michael Jackson. Just how valuable is the catalog for Jackson’s estate?

Why This Matters: Let’s start out with a quick history lesson here. Sony administered the full EMI catalog through Sony/ATV, a joint venture it created with Michael Jackson back in 1995. Fast forward to 2016, Sony bought out the Jackson estate’s share of Sony/ATV, whose crown jewel is the Beatles song catalog for $750 million.

As of 2012 the Jackson estate owns about 10% in the overall EMI Music Publishing catalog. It seems as though they didn't have to actually put up any cash for their share. Due to its 50% ownership of Sony/ATV the estate inherited its 10% ownership rights. Right now they remain the only stakeholder that hasn't sold. Sony could try to buy the Jackson estate out as well. It’s unlikely as Billboard notes the estate's minority ownership could also help Sony's position as it goes through the regulatory process.

EMI Music Publishing owns or administers more than two million songs. Altogether the deal values EMI at $4.75 billion, more than double its price in 2011. Under the current arrangement Sony is assuming the $1.3 billion in debt EMI Publishing was carrying.

Situational Awareness: The success of streaming has attracted new investment, and longtime owners have seen an opportunity to cash out. This deal will give Sony outright control of the world’s largest catalog of music publishing assets and simplify what has been a complex ownership structure. It will be interesting to see how much longer the Jackson estate will hold on to its equity in the EMI catalog.

CBx Vibe:Wanna Be Startin' Somethin'” Michael Jackson