When Michael Jackson bought the publishing rights to the Beatles catalog for $47.5 million two decades ago, he said the song he coveted most was “Yesterday.” In those brighter times, his own troubles seemed so far away.
But today is another matter.
Jackson not only is standing trial for alleged child molestation, he faces debt so crushing that his handlers are pushing him to shed a substantial stake in the Fab Four’s fabled songbook – something the self-proclaimed King of Pop said he would never do.
Although speculation has long swirled about whether Jackson eventually would be forced to part with an asset valued at as much as $500 million, rumors of a possible sale have gained credence in recent days as the singer’s representatives have leaked word of their renewed efforts to keep creditors at bay.
There’s general agreement that no deal is imminent. But a consensus is building among Jackson’s advisers and others in the recording industry that he may have no other way to pay an estimated $270 million in Bank of America Corp. loans he has used to underwrite his famously lavish spending.
The clock is ticking. The potential of Jackson defaulting on those loans could be greatly increased should he be found guilty by the jury now hearing testimony in Santa Maria, Calif. With his recording career on the slide for years, Jackson’s only other way to generate quick cash would be to hit the concert circuit overseas, where he remains popular.
“If there’s a conviction,” said Los Angeles entertainment lawyer Jeffrey Light, “he loses his ability to go out and make meaningful money as a live performer, because he’d be in jail.”
The Beatles songs – jointly owned by Jackson and Sony Corp. through a separate entity, Sony/ATV Music Publishing – represent a treasure trove of music by the songwriting team of John Lennon and Paul McCartney that generates vast sums every year through licensing and royalty deals. Since the Beatles landed on U.S. soil in the early 1960s, no group has enjoyed such sustained success.
“This band changed music forever,” said Scott Francis, president of BMG Songs North America, another power in the publishing field. “There are always new uses for these songs. New generations are being introduced to this catalog all the time.”
When a song is used in a commercial, film, television show, stage performance, video game or ring tone, a licensing fee is paid. That revenue is split between the songwriter and the publisher. So every time “Can’t Buy Me Love” is used, for example, half the money goes to McCartney and the Lennon estate, with the rest going to Sony/ATV.
Under one scenario now being floated by Jackson’s representatives, he would reduce his interest in Sony/ATV from 50 percent to 15 percent. The money he’d make by selling that chunk would repay his debts while still assuring him a stream of about $10 million annually, said one of the singer’s cast of business advisers. He would also receive a one-time $10 million payment.