Is Buying Michael Jackson’s Music Rights a Smart Investment?
Even so long after his death, Michael Jackson continues to make news. If it isn’t conspiracy theories about his death or stories about his massive debts, it is the incredible story of the right to Beatles songs that carries on hitting the headlines.
You may remember that Paul McCartney was furious with Jacko for buying the rights to many of the classic Beatles songs from under his nose. The story goes that McCartney once advised a young Jackson on the benefits of buying song rights. The King of Pop listened to the advice, then went ahead and snapped up some of McCartney’s own most beloved numbers. McCartney had long cherished hopes of getting back control of his songs and was said to be livid at losing out on it in this way.
Jackson bought the catalogue – then known as ATV – back in 1985 for some $47.5 million (£33.5 million). It was a controversial deal at the time but turned out to be a financial masterstroke. Sony bought half of the catalogue from Jackson in the early 1990s for $100 million (£70.5 million) and has now offered $750 million (£530 million) to his estate for the rest.
What does the Sony/ATV catalogue include?
For a start, it includes most of the Beatles songs. However, it also has a lot more to it than that. In fact, the catalogue now has around 2 million songs in it and is the biggest music catalogue in the world right now.
Apart from the Fab Four, it contains such well known songs as “Tutti Frutti” by Little Richard, “Somewhere Over the Rainbow” and “New York, New York” to name just a few. The list of artists on it ranges from Bob Dylan to Sting and from Lady Gaga to Alicia Keys. Interestingly, the catalogue being bought by Sony doesn’t include Jackson’s own songs, as these are included in a separate publishing company.
Is It a Good Deal?
So, is $750 million a good deal for the rights to all of those songs? It certainly shows what a shrewd piece of business Jackson pulled off all those years ago when he bought the catalogue for a fraction of that price. The advice given to him by McCartney was sound and has potentially helped clear many of the debts that he left behind.
Attorney John Branca and music executive John McClain helped to make the deal in order to boost the value of Jackson’s estate. They said in a statement that it showed Jackson’s “foresight and genius” in making such a smart investment back in the 1980s.
Considering that there are so many massively popular songs in the Song/ATV catalogue it is clear that it is something that pulls in a lot of money in rights every single day. Can you imagine how many times “Yesterday”, “Something” and “Hey Jude” gets played all over the world each day? In fact, some sources put “Yesterday” as the most played song on the radio of all time.
$250,000 for Playing a Song
A good example of how profitable these songs can be came when Mad Men had to pay a reported $250,000 to use “Tomorrow Never Knows” in an episode in 2012. Permission to use Fab Four songs is rarely given, although “Lovely Rita” was used on Conan O’Brien’s last NBC show. Estimated figures for the rights in this case range up to $500,000. Nike also famously paid $250,000 to use “Revolution” and then got caught up in a court case over how the song was used.
If you had a spare few million lying around then it is clear that buying the rights to these songs would guarantee you a very nice annual income.
Sir Paul McCartney’s Lawsuit
However, there is one potential fly in the ointment for Sony, and it comes in the shape of Sir Paul McCartney. The ex-Beatle is reportedly still angry and upset at losing the rights to his songs. He has now filed a suit that lets him recover the share of his publishing rights.
He can do this because there is a law that allows songwriters to reclaim their song rights after 56 years. In the case of many of the songs in questions, McCartney will need to wait until 2025 in order to finally get his hands on his songs again. We can only imagine his joy at finally getting them back after more than half a century of waiting.
Do you think that $750 million is a good price for this catalogue of famous music?