Sony has agreed to a deal with the Michael Jackson estate to buy out the late King of Pop’s half of their Sony/ATV music publishing company. The deal, which comes 21 years after Jackson and Sony formed the joint venture, is expected to net the Jackson estate $750 million. The agreement also allows the Jackson estate to retain 10 percent of EMI Music Publishing as well as their stake in Mijac Music, which owns to rights to Jackson’s own works, and Jackson’s master recordings, Billboard reports.
“This transaction further allows us to continue our efforts of maximizing the value of Michael’s Estate for the benefit of his children,” Jackson estate co-executors John Branca and John McClain said in a statement. “It also further validates Michael’s foresight and genius in investing in music publishing. His ATV catalogue, purchased in 1985 for a net acquisition cost of $41.5 million, was the cornerstone of the joint venture and, as evidenced by the value of this transaction, is considered one of the smartest investments in music history.”
Jackson first purchased ATV Music Publishing, which owned the publishing rights to the majority of the Beatles‘ music, in 1985 for $41.5 million at the insistence of Paul McCartney. Eleven years later, the singer merged his stake in ATV with Sony Music to form Sony ATV; the conglomerate then added EMI Music Publishing to their staple in 2012.
According to Fortune, Sony exercised a right in the Sony/ATV contract in September 2015 that allowed one partner to buy out the other. The following month, the Wall Street Journal reported that Sony sought buyers for their half of the publishing company, with a $2 billion valuation put on their portion of Sony/ATV Music.
In a statement, Sony CEO Michael Lynton said, “This acquisition will enable Sony to more quickly adapt to changes in the music publishing business, while at the same time continuing to be an unparalleled leader in the industry and a treasured home for artists and writers.” Lynton added that the agreement should be completed by March 31st.
The $750 million sale of Jackson’s half of Sony/ATV Music will go in part to finish paying off the massive $500 million debt the singer had accrued at the time of his death in 2009. After taxes, fees and expenses, the remaining money will be put into a trust for Jackson’s three children.