The King of Pop is dead, but controversy over his interest in the Beatles library lives on. The late music superstar — possibly the last the world will ever see — left behind hefty debts, two or more wills and a tangle of extensive business dealings. His most valuable asset, a 50 percent share in the publishing rights to over 200 legendary Beatles songs, could be affected.
Jackson reportedly said he wanted the songs to revert back to Paul McCartney (or the Beatles in general) earlier this year as his health declined, but his family says at least one will is missing. Besides, his share of the songs may not have been entirely his to give. Under financial duress following legal battles and a lavish lifestyle, he sold the right to purchase half of his remaining share in the Beatles copyrights to Sony/ATV in 2006. In addition, he posted his interest in the catalog as collateral on a $270 million Bank of America loan, which Fortress Investments acquired in 2005. An unnamed source “with knowledge of the venture’s plans” told Bloomberg that Sony/ATV intends to keep control of the catalog, and The New York Times says Sony/ATV will make good on Jackson’s offer to let it acquire half his interest in these Beatles songs for a set price.
With creditors circling Jackson’s estate, which owes them between $400 and $500 million according to several estimates, Sony/ATV could be in a strong bargaining position to acquire Jackson’s remaining interest in the Beatles. But according to the Times, the company doesn’t know who to negotiate with in order to do so — although its sources say his mother Katherine Jackson is in control.
In her favor, Jackson’s legendary music is selling like hotcakes in iTunes and elsewhere, and will likely grow more valuable over time given her son’s status. In light of that income, she may not be as desperate to make a deal as Sony/ATV probably hopes she is. Plus McCartney, Starr, Ono and Harrison are almost certainly interested too. McCartney ended his friendship with Jackson after Jackson outbid him for the songs, and has expressed annoyance at having to pay to perform his own songs in public. The Beatles aren’t exactly hurting for money.
A source cited by the celebrity-oriented U.K. publication
The Daily Mirror claimed that Jackson, worried about his health, “told his lawyers he was sad he no longer talks to Sir Paul and said he wanted to make things right,” leading to speculation that Jackson had altered his will to give the Beatles rights back to either Paul McCartney or The Beatles’ estate. Whoever ends up winning the publishing rights to these Beatles songs, they’re about to get a lot more valuable, as the Beatles prepare to make their first significant leap into the digital music world with the September release
Beatles: Rock Band (screenshot above). Crucially, Jackson and Sony/ATV also control the use of Beatles music in videogames such as Harmonix Music Systems’
Beatles: Rock Band and instructional sites such as iVideoSongs, because publishers control the “synch” rights allowing compositions to appear with video. (A change of ownership of these publishing rights won’t affect the Beatles finally showing up in the iTunes store, because those rights cover underlying compositions rather than the sound recording rights, which in this case are controlled by the Beatles.) Neither Harmonix nor Sony/ATV offered comment in time for this story. iVideosongs, one of the “hottest digital music sites” in
our Top 10 list last year, also relies on Beatles publishing rights to allow it to sell video tutorials of Beatles songs taught by Giles Martin, son of Beatles producer George Martin, and filmed at Abbey Road Studios. Wired.com has learned that iVideosongs already has a deal with Harmonix to put its tutorials on the main Rock Band site, and is in talks to do the same for Beatles: Rock Band. Jackson’s untimely demise could also affect the future of that deal.
“When I saw that news break, that’s the first thing I thought of,” said iVideosongs CEO Tim Huffman. “Sony/ATV is the publishing entity that administrates (those Beatles songs)…. With his passing, it will be interesting to see how that estate plays out…. I would expect that Paul, Ringo, Yoko and Olivia Harrison would have an interest in trying to get control of their songs again.”
As things stand now, Paul McCartney must grudgingly pay Jackson and Sony/ATV each time he performs “Hey Jude” or many of his other Beatles compositions. Jackson and Sony/ATV each own 50 percent of the publishing rights to these songs: Jackson won them over McCartney in a 1985 closed auction for $47.5 million, sold half to Sony/ATV in 2005, posted the other half as collateral on a loan and optioned half of that share to Sony/ATV in 2006 to control interest on his mounting debt.
“Michael was very proud of this partnership,” wrote Sony/ATV CEO Martin Bandier in an e-mail statement. “For him this was about really honing his business skills in an area that he loved.”
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Screenshot courtesy of Harmonix
