Major Financial Firms Inquire About Jackson Estate
July 20, 2009 at 4:59 AM (PT)
As the world sorts through the pieces of MICHAEL JACKSON’s life one month after his death, so, too, does WALL STREET, reports THE NEW YORK TIMES. "A handful of major financial firms have made inquiries into buying the JACKSON estate’s 50% share of SONY/ATV MUSIC PUBLISHING, the company that controls most of THE BEATLES song catalog, according to people briefed on the matter. Among them are COLONY CAPITAL, KOHLBERG KRAVIS ROBERTS, PLAINFIELD ASSET MANAGEMENT and the media mogul HAIM SABAN, these people said.
"SONY/ATV is by far the most valuable asset in JACKSON’s estate, and his 50% stake could be worth as much a $500 million. JACKSON bought the majority of THE BEATLES catalog in 1985 for $47.5 million, after an informal chat with PAUL MCCARTNEY about the wisdom of buying song catalogs.
"Since then, SONY/ATV -- formed from a 1995 partnership with SONY -- has bought up the rights to thousands of songs from artists, including BOB DYLAN, JONI MITCHELL, BECK and TAYLOR SWIFT. In recent years, it made a big push into TV production, helping to balance out its radio business.
"Despite earning hundreds of millions of dollars over his lifetime, JACKSON was well known for having a mountain of debt, born of expensive indulgences like the sprawling NEVERLAND estate, costly music and tour productions and art and antiques buying sprees. The estate still carries $400 million to $500 million in debt. BARCLAYS holds about $300 million of debt against the JACKSON estate’s stake in SONY/ATV.
"It remains possible that SONY could seek to use its option, leaving the JACKSON family with a 25% stake in the business. Some of the private-equity firms have proposed teaming with SONY to buy the remaining stake from the family, these people said."