REVOLVER:As Michael Jackson's will is untangled thread by thread – and will probably end up in the appeal court for years to come – a lot of people are getting very jumpy about what all this means for The Beatles.
Jackson owns the publishing rights to the vast majority of The Beatles' songs. Every time Paul McCartney plays Hey Judelive, he has to pay Jackson, or now the Jackson estate. It was one of the few sensible decisions taken by Jackson to buy up these publishing rights for $47.5 million in 1985: they are now conservatively worth $1.2 billion.
These rights generate millions each year – anytime a Beatles song is played, bought or performed, a payment has to be made. And there will be a massive rush of money into the Jackson estate later this year when The Beatles: Rock Bandgame is released on September 9th. On pre-orders alone, this video game has broken all known records.
Few artists own their own publishing rights, and The Beatles were no exception. When the band signed their first record deal, they gave the rights (in exchange for a cash advance) to the Northern Songs company. The songs were sold on to Associated Television Corporation (ATV) in 1969. They didn’t become available again until 1985, when the entire ATV music catalogue was sold. This catalogue includes not just The Beatles, but also songs by Elvis Presley and Bob Dylan.
Paul McCartney and Yoko Ono bid about $40 million to buy the ATV catalogue, but Jackson gazumped them with his offer. McCartney and Jackson, once very good friends, never spoke again – McCartney viewed Jackson’s actions as a “betrayal”.
A few years ago Jackson had to “mortgage” half of the publishing rights to his label, Sony, because he was broke due to expensive court cases and a high-rolling lifestyle. Sony now owns this 50 per cent in a complicated arrangement that saw Jackson merge his publishing rights with those of Sony. It is believed that Jackson had also mortgaged out bits of his own 50 per cent stake to banks in exchange for a large loan.
The big player now is Jackson’s mother, Katherine Jackson, who was named as the beneficiary in the will. The situation as it stands is that Katherine Jackson (and a board of advisers) will look at just how much debt Michael left. Even if the figure reaches $500 million (as has been suggested), that is manageable. More than that and she may have no choice but to sell the 50 per cent to clear the debts.
Waiting in the wings is Sony, of course, which naturally would love to own the entire 100 per cent, but also, intriguingly, McCartney, Ono, Ringo Starr and Olivia Harrison (who are now legally The Beatles).
It is one of the biggest regrets of McCartney's business life that he didn't outbid Jackson back in 1985 (whatever about their colossal financial worth, he has a strong emotional attachment to the catalogue) and the combined wealth of all four Beatles would mean a very robust bid. But Sony has deep pockets as well. And all parties concerned are well aware of the inevitable financial windfall from the release of the Rock Bandgame in September.
In a tragi-comic turn, Jackson has had the last laugh. Since his death, sales of his albums have gone through the roof. There is a huge amount of money being generated for his estate at the moment (he has multiple albums in top-10 charts around the world). And when all the previously unreleased Jackson material is packaged up and shipped out, that figure will swell even more. This money should clear the debts and obviate the need to sell on the 50 per cent.
The 79-year-old Katherine Jackson has suddenly become a very major player in the music business.
bboyd@irishtimes.com
