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A banner of the late Michael Jackson - Source: Reuters -
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The Fab Four's prized catalogue - specifically 267 songs mostly written by John Lennon and Paul McCartney - is embarking on a long and winding road of ownership uncertainty following the death of Michael Jackson on Friday.
The pop singer and Sony Corp's Sony Music arm operated a lucrative joint venture that either owns or administers the copyrights to about 750,000 compositions written by the likes of Bob Dylan, Neil Diamond, Taylor Swift and the Jonas Brothers.
Industry analysts estimate that Sony/ATV Music Publishing is worth at least US$1 billion (NZ$1.55bn), making Jackson one savvy entertainer. His initial investment cost him US$47.5 million (NZ$75.76m) in 1985. Music publishing is considered a license to print money. Not quite as exciting as the piracy-ravaged recorded-music side, it involves collecting royalties from such diverse avenues as downloads, radio airplay and videogames.
But mystery now surrounds the beneficial ownership of Jackson's stake. According to a lawsuit filed in 2002 by a creditor, he secured bank loans totaling US$270 million (NZ$419.26m) two years earlier using both his Sony/ATV stake and the copyrights to his own songs as collateral.
Jackson lived an extravagant lifestyle, even as his commercial appeal dwindled amid damaging child-abuse allegations and changing music tastes. The Wall Street Journal reported in 2005 that his cash reserves ran so low earlier that year that he worried about paying his electric bill. The paper reported earlier this month that he had racked up about $500 million of debt.
A clearer picture of his finances will emerge during the administration period of his estate that usually lasts about 18 months, said Renee Gabbard of the law firm Paul, Hastings, Janofsky & Walker in Costa Mesa, California.
Jackson's executors will evaluate his assets, file the estate tax return and invite creditors to submit invoices, said Gabbard, who has a number of wealthy clients with entertainment-related estates.
The process of valuing estate assets, especially intellectual property like music copyrights, is "very complex" and often takes "quite a while," said Gabbard.
"When you have entertainers and musicians they usually have quite extensive royalty contracts. It's very tough to put a value on a catalog of songs," she said.
Jackson and Sony formed their joint venture in 1995, with the singer contributing ATV Songs, whose 4,000 tunes included most of the Beatles catalogue. He had bought ATV a decade earlier from Australian businessman Robert Holmes a Court, famously outbidding McCartney in the process.
Jackson was not involved in the day-to-day operations of Sony/ATV, but as a lover of the songwriting process was known to be "incredibly proud" of the company and its fast growth, according to a publishing industry source.
A spokesman for Sony/ATV declined to comment.
His stakes in both Sony/ATV and in Mijac, which holds his own copyrights, were owned by trusts. It was not clear if they were irrevocable or not. If they are revocable, then they could be dismantled to satisfy creditors, Gabbard said.
The estate would first pay federal taxes owed on Jackson's assets, most notably the publishing companies. The remaining assets then would go to satisfy creditors and the balance probably would be placed into separate trusts for his beneficiaries, most likely his children, Gabbard said.
But the publishing industry source said it was too premature to speculate about a possible change in ownership at Sony/ATV, which is run by music industry veteran Martin Bandier.
Additionally, each side is reportedly entitled to make a counter-offer if the other side lines up a buyer, or to bid for the other half it does not own.
The Beatles catalogue, meanwhile, just keeps raking in money. The group's CDs will be reissued on September 9, the same day that a Fab Four version of the "Rock Band" videogame hits stores.
If you or someone you know is planning to go to Michael Jackson's funeral ONE News would like to hear from you. Phone 09 916 7266 or email news@tvnz.co.nz
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Post new commentmotukowhai said on 2009-07-08 @ 22:20 NZDT: Report abusive post
"If we looked at mortality as the whole of existence, then the pain, sorrow, failure and short life would be a calamity; but if we look upon life as an eternal thing stretching far into the premortal past and on into the eternal post-death future, then all happenings may be put in proper perspective." Quote by President Spencer W. Kimball. Take your rest now Michael and do so in peace.
Vaai said on 2009-07-08 @ 14:01 NZDT: Report abusive post
REST IN PEACE KING OF THE POP WE LOVE YOU
jaxlino said on 2009-07-08 @ 12:31 NZDT: Report abusive post
the media killed the princess and they did the same thing with Michael, do they have any respect? now Michael can rest and just watch upon his children ..i saw Miss Rowe being pressured by the media and gosh thats how much in your face they are!! they darn right wanna know your business..I know it's their job but they don't need to ruin peoples lives.. michael i have three words for you.. "GO GET EM"
jaxlino said on 2009-07-08 @ 12:22 NZDT: Report abusive post
RIP my friend, and hope you haunt the media stalkers.. they ***** with your life now it's your turn for revenge..sad to say I honestly and personally think he topped himself because of the media on his tail constantly and they let the whole world know his business, we loved his music, his children and his family not his personal indepth life, he was tired and couldn't fight no more, he had a huge debt that no-one gave a toss about, and now hes gone, all the media is like poor michael... whatever!
boyracer said on 2009-07-08 @ 11:00 NZDT: Report abusive post
Some people will always look at the negative side of things! Thats just the way they are. MJ was a VERY talented individual (Not just a singer and dancer), His message is in his songs (which comes from the heart). I was watching the memorial service this morning and thinking to myself how many people he touched on positively and what he means to them. His music will no doubt live on, and people will know in 20+ years who sang his songs!