Report: Sony Considering Sale of Music Publishing Arm?

Sony/ATV: On The Market?

SONY is considering a sale of its music publishing business SONY/ATV, which is owned in conjunction with the estate of MICHAEL JACKSON, according to a report in several outlets, including the NEW YORK TIMES. The catalog includes the rights to more than three million works, featuring more than 250 BEATLES songs, tunes by the likes of TAYLOR SWIFT,L LADY GAGA, KANYE WEST and large portions of the MOTOWN catalog.

A series of e-mails first uncovered by BLOOMBERG NEWS revealed that SONY executives in JAPAN and the U.S. discussed a “top secret” plan to sell off the MARTIN BANDIER-fronted publishing company. Documents were circulated among about half-dozen SONY executives. No potential buyers or price were revealed, and it was unclear how much, if not all, of the company it intended to offer.

“I’d like to hear your thoughts on the music publishing business, which has a rather complex capital and governance structure and is impacted by the market shift to streaming,” SONY CFO KENICHIRO YOSHIDA wrote on OCTOBER 3rd to chief executive KAZUO HIRAI and L.A.-based entertainment head MICHAEL LYNTON.

“We are very surprised that the attached listing includes the comment about the sale of SONY/ATV,” SONY CORP. U.S. CFO STEVEN E. KOBER wrote on NOVEMBER 21st, just days before the company’s computer system was famously hacked over the controversial release of the movie "The Interview."

“As you know quite well, this is a top-secret project that is being handled by me working directly with MICHAEL and NICOLE,” added KOBER, referring to LYNTON and SONY CORP. U.S. Pres. NICOLE SELIGMAN.

Aside from SONY and MICHAEL JACKSON, SONY/ATV's backers include several parties that helped finance the $2.2 billion acquistion of EMI  the ABU DHABI sovereign wealth fund MUBADALA, HONG KONG's JYNWEL CAPITAL, BLACKSTONE'S GSO CAPITAL PARTNERS and DAVID GEFFEN.

SONY has been pressured recently to divest some of its assets after saying it expected a loss of $2.1 billion for 2014. Another factor is the declining royalty rates from streaming companies who seek music licenses. In recent years, MARTIN BANDIER has threatened to withdraw SONY/ATV songs from the licensing agencies ASCAP and BMI, discouraged that the performing rights organizations have been unable to raise royalty rates from online services like PANDORA (NET NEWS, 12/12).

In a recent letter to members, BANDIER complained: “This is a totally unacceptable situation, and one that cannot be allowed to continue.”

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