| Type | Limited liability company |
|---|---|
| Industry | Music |
| Founder(s) | Lew Grade |
| Headquarters | London, United Kingdom |
| Key people | Michael Jackson |
| Services | Music publishing |
| Owner(s) | The Michael Jackson Family Trust (50%) Sony (50%) |
| Website | www.sonyatv.com |
Sony/ATV Music Publishing is a music publishing company co-owned by The Michael Jackson Family Trust and Sony. The organisation was originally founded as Associated TeleVision (ATV) in 1955 by Lew Grade. In 1957, ATV acquired Pye Records as a wholly owned subsidiary. At the time, Pye Records was one of the three major record companies in the UK and, along with EMI and Decca Records, accounted for the vast majority of music records sold in the country. ATV Music Publishing was then created to exploit the catalogue of songs written by artists on the Pye Record label, and for the themes to Independent Television Corporation and ATV programmes. Grade established ATV's headquarters alongside those of Pye Records; off of Edgware Road, beside the Marble Arch in central London.
ATV Music Publishing and Pye Records were at the forefront of the British music explosion in the 1960s. The businesses held contracts with several US companies, allowing them to manufacture and distribute records in the UK. ATV Music Publishing and Grade acquired the rights to the Lennon–McCartney song catalogue, Northern Songs, in 1968. The catalogue featured nearly every song written by John Lennon and Paul McCartney until The Beatles' split in 1970.
Grade's fortune began to dwindle as the 1980s approached and by the mid-1980s, ATV Music Publishing and Pye Records were both up for sale. The companies were bought by Australian businessman Robert Holmes à Court, who disposed of them quickly and to his great profit. They were sold to Michael Jackson for $47.5 million in 1985. McCartney, who had told Jackson about the importance of owning publishing, admitted he felt somewhat undercut by the acquisition although he did not enter bidding when it came up for sale in 1984.[1][2][3] Previously, in 1981[1] McCartney had also let an offer to buy the ATV catalog for £20 million fall through.[2][4] McCartney reportedly said about Jackson's acquisition, “I think it’s dodgy to do things like that, to be someone’s friend and then buy the rug they’re standing on.”[2] But after the acquisition, McCartney and Jackson appeared together in a photograph to show that there was no bad blood between them[2] and in July 2009, McCartney stated that "though Michael and I drifted apart over the years, we never really fell out, and I have fond memories of our time together."[5]
In December 1995, ATV Music Publishing was merged with Sony and renamed Sony/ATV Music Publishing. The company became the second largest music publisher in the world, owning the rights to songs by The Beatles, Elvis Presley, Eminem, Bob Dylan, and Willie Nelson. The value of Sony/ATV Music Publishing has varied in reports. Industry experts have estimated the company to be worth as much as $1.5 billion.
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Sony/ATV was originally founded as Associated Television (ATV) in the UK in 1955.[6] It was formed by the impresario Lew Grade, of the entrepreneurial Grade family. At this time, Grade had also founded the Independent Television Corporation (ITC), which featured stars such as Patrick McGoohan, Roger Moore, and Tony Curtis.[6] ITC provided programmes to British and international broadcasters. ATV itself was originally one of these broadcasters; the company had been awarded a franchise in the mid-1950s to operate a new commercial television company in the UK. ATV was broadcast to the English Midlands as part of the Independent Television (ITV) network. Business tycoon Louis Benjamin was also involved with Grade, as part of one of the three major record companies in the UK at the time. The company was Pye Records which, along with EMI and Decca Records, accounted for the vast majority of music records sold in the UK.[6] In 1957, ATV acquired Pye Records as a wholly owned subsidiary. Grade and Benjamin held most of the shares.[6] ATV Music Publishing was then created to exploit the catalogue of songs written by artists on the Pye Record label, and for the themes to ITC and ATV television programmes. The UK rights to some of the rock 'n' roll music from the US were also bought by ATV.[6] Grade established ATV's headquarters alongside those of Pye Records; off Edgware Road, beside the Marble Arch in central London.[7]
The 1950s/1960s was a good period for the Grade family and their companies. Their television operation, which held a vast monopoly of advertising revenues, was part of a system described as having a "license to print money" by Roy Thomson, 1st Baron Thomson of Fleet.[7] Pye Records was at the forefront of the British music explosion in the 1960s. The Searchers, The Kinks, Donovan, The Moody Blues, Mungo Jerry and Petula Clark were some of the artists that Pye Records released music by. The record label also had contracts with a several US companies, allowing them to manufacture and distribute records in the UK. Chess Records was among those, and counted Chuck Berry as one of their top artists.[7] ATV Music and Lew Grade, who had been knighted by this time, acquired the rights to the Lennon–McCartney song catalogue, Northern Songs, in 1968.[8] The catalogue featured every song written by John Lennon and Paul McCartney until The Beatles' legal split in 1971. Northern Songs had been co-owned and administered by Brian Epstein and Dick James. Upon Epstein's death in 1967, James, who was approaching retirement, put the company up for sale. Lennon and McCartney, upset that the songs they had written were not theirs legally, attempted to gain ownership of the publishing rights.[8] Their bid to gain control, part of a long and acrimonious fight, failed. The financial clout of Grade, their adversary in the bidding war, ensured that the music written by the two Beatles passed into the control of ATV.[8]
ATV Music Publishing remained a successful organisation in the music industry throughout the 1970s. Len Beadle, the company's chief executive, signed up many songwriters and bought numerous song catalogues. He acquired the songs written by Lieber and Stoller, which included the Elvis Presley hits "Hound Dog" and "Jailhouse Rock". The Lieber and Stoller catalogue also contained Little Richard's greatest hits.[9] The catalogue acquisitions, along with the continuing royalties from Lennon and McCartney, ensured that large amounts of money were frequently coming in for ATV Music Publishing. Despite the success of the music publishing organisation, other ventures formed by Grade were not performing as well. Pye Records, which continued to distribute music from artists such as Carl Douglas and Barry White, was failing to bring in large amounts of money.[9] The television arm of ATV lost its government-granted license and their English Midlands franchise was awarded to Central Television, in which Grade had a minority stake. ITC also lost money on the flop movie Raise the Titanic. Grade's fortune diminished as the 1980s approached.[9]
By the mid-1980s, ATV Music Publishing and Pye Records were both up for sale. The companies were bought relatively cheaply by Australian businessman Robert Holmes à Court, who aqcuired Associated Communications Corporation (the parent company) in 1982,[10] asset-stripped them and sacked many long serving employees, before selling them on again.[11][12][13] During this time, American singer Michael Jackson was recording "Say Say Say" for Paul McCartney's Pipes of Peace album. Jackson stayed at the home of McCartney and his wife Linda during the recording sessions, becoming friendly with both. One evening whilst at the dining table, McCartney brought out a thick, bound notebook displaying all the songs to which he owned the publishing rights. Jackson grew more excited as he examined the pages. He inquired about how to buy songs and what the songs were used for.[3] McCartney explained that music publishing was a way to make big money. Jackson replied by telling McCartney that he would buy The Beatles' songs one day. McCartney laughed, saying "Great. Good joke."[14]
Jackson was first informed that the ATV catalog was up for sale in Sept. 1984 by his attorney John Branca, who had put together Jackson's earlier catalog acquisitions. Warned of the competition he would face in buying such popular songs, Jackson remained resolute in his decision to purchase them.[1][3] Branca approached McCartney's attorney to query whether the Beatle was planning to bid. The attorney stated he wasn't; it was "too pricey".[1][2] According to Bert Reuter, who negotiated the sale of ATV Music for Holmes à Court, "We had given Paul McCartney first right of refusal but Paul didn't want it at that time."[15] Lennon's widow, Yoko Ono had been contacted as well but also did not enter bidding.[2]
McCartney had previously attempted to purchase the catalog alongside Ono in 1981.[1] He was offered the catalog for £20 million ($40 million USD) and proposed the pair would each pay £10 million.[2][4] Ono refused as she thought it was too high a price. McCartney spoke about the offer at a press conference in April, 1990, explaining that Ono "actually said 'I think we can get it for 5.' So I said, 'Well ok, you know, let's see what we can do.' And we couldn't."[4] Not wanting buy the songs himself and potentially be seen as being "grabby" for "owning John Lennon's bit of the songs", McCartney let the offer fall through.[2][4]
The competitors in the 1984 sale of ATV Music included Charles Koppelman and Marty Bandier’s New York-based The Entertainment Co., Virgin Records, New York real estate tycoon Samuel J. LeFrak, and financier Charles Knapp. On Nov. 20, 1984, Jackson sent a bid of $46 million to Holmes à Court. Branca suggested the amount of the bid after having spent time evaluating the earnings of the catalog and being aware of another bid for $39 million. Jackson was only interested in the music copyrights but the package also included buildings, a recording studio, some studio equipment and life insurance policies on the Beatles (presumably Lennon's was collected in 1980). The two sides signed a non-binding memorandum of mutual interest in Dec. 1984 and Jackson's team began a four-month process of verifying ATV Music's legal documents, financial reports and every significant composition in the nearly 4000-song catalog.[3]
The two sides began drafting contracts in Jan. 1985 and follow-through meetings began on Mar. 16. Jackson's team described the negotiations as frustrating, with frequent shifts of position by the other side. One Holmes à Court's rep described the negotiations as a "game of poker." Jackson's team thought they had reached a deal several times but new bidders would enter the picture or they would encounter new areas of debate. The prospective deal went through eight drafts. In May 1985, Jackson's team walked away from negotiations after having spent hundreds of hours and over $1 million. In June 1985, they learned Koppelman/Bandier had made a tentative agreement with Holmes à Court to buy the catalog for $50 million.[3]
But in early Aug., Holmes à Court contacted Jackson and talks resumed. Jackson only raised his bid to $47.5 million but he had the advantage of being able to close the deal faster, having completed due diligence of ATV Music prior to any formal agreement.[3] He also agreed visit Australia as a guest of Holmes à Court and appear on the Channel Seven Perth Telethon.[3][15] Holmes à Court included some more assets and agreed to established a scholarship in Jackson's name at a U.S. university.[3] Branca closed the deal and purchased ATV Music on Jackson's behalf for $47.5 million on Aug. 10. 1985.[1][3] In Oct. 1985, Jackson fulfilled his contract provision to visit Perth, Western Australia and appear on the telethon, where he spoke briefly and met with two children.[3][15]
In an analysis of the acquisition, Los Angeles Times noted that if "Yesterday" were to earn $100,000 a year in royalties, the Lennon estate and McCartney would divide 50% of the income; $25,000 each. The publisher, Jackson, would receive the other 50%; $50,000. It was mentioned that "Yesterday" probably earns more than $100,000 a year. The publisher would also control the use of the song in films, commercials and stage productions.[1][3] Jackson went on to use the Beatles' songs in numerous commercials, feeling that it would enable a new generation of fans to enjoy the music. McCartney, who himself had used the Buddy Holly song catalogue in commercials, felt saddened.[1] Privately, Jackson was reported to have expressed exasperation at McCartney's attitude; he felt that the musician should have paid for the songs he had written.[1] At the time, McCartney was one of the richest entertainers in the world, with a net worth of $560 million and a royalty income of $41 million.[1] Jackson stated, "If he didn't want to invest $47.5 million in his own songs, then he shouldn't come crying to me now".[1]
Appearing on the Late Show with David Letterman shortly after Jackson died in 2009, McCartney spoke about Jackson's acquisition of the Beatles songs and the impact of it on their relationship:[16]
And which was, you know, that was cool, somebody had to get it, I suppose. What happened actually was then I started to ring him up. I thought, ok, here's the guy historically placed to give Lennon–McCartney a good deal at last. Cuz we got signed when we were 21 or something in a back alley in Liverpool. And the deal, it's remained the same, even though we made this company the most famous...hugely successful. So I kept thinking, it was time for a raise. Well you would, you know. [David Letterman: Yes I think so.] And so it was great. But I did talk to him about it. But he kind of blanked me on it. He kept saying, "That's just business Paul." You know. So, "yeah it is" and waited for a reply. But we never kind of got to it. And I thought, mmm...So we kind of drifted apart. It was no big bust up. We kind of drifted apart after that. But he was a lovely man, massively talented and we miss him.
Ono was pleased that Jackson had acquired Northern Songs and called it a "blessing".[1] Speaking in November, 1990, Ono stated, "Businessmen who aren't artists themselves wouldn't have the consideration Michael has. He loves the songs. He's very caring."[1] She added that if she and McCartney were to own the songs, there would certainly be arguments. Ono explained that neither she or McCartney needed that. "If Paul got the songs, people would have said, 'Paul finally got John'. And if I got them, they'd say, 'Oh, the dragon lady strikes again'".[1]
The merging of ATV with Sony establishes our commitment to create one of the largest music publishing ventures in the world. We have been working on this for over a year and, now, with the two of us together, the sky is our only limit.
After Jackson's acquisition of ATV Music Publishing, his record label, CBS, were negotiating the sale of their record division in an unrelated deal. Following hurriedly arranged meetings and disagreements over the selling price, a deal was sealed by Jackson during a concert in Tokyo.[18] Upon seeing the success of this sale, Japanese corporation Sony sought to break away from its core business of hardware manufacturing and diversify into music, films and games. Looking for further opportunities, the company aimed to expand its music publishing interests. The Japanese corporation offered Jackson $90 million for 50% of ATV Music Publishing in 1995.[18][19] Jackson gladly accepted; he had essentially acquired half ownership of the Beatles' songs for a large profit.[18] Jackson's own songs were not included in the deal.[17] Having been merged, the company was renamed Sony/ATV Music Publishing and became the second largest music publisher in the world.[18] Michael P. Schulhof, President and CEO of Sony, welcomed the merger and praised Jackson for his efforts in the venture. "Michael Jackson is not only the most successful entertainer in history; he is also an astute businessman. Michael understands the importance of copyrights and the role they play in the introduction to new technologies."[17] He added that Jackson recognises Sony's "leadership in developing and realizing new technologies that serve to expand the creative horizon of artists such as himself".[17] Administrative expertise was provided by Sony, who installed Paul Russell as chairman. Jackson was a company director and attended board meetings regularly.[18] As each party in the arrangement held the power of veto, both sides would have to agree on a decision before it could be made. If neither party agreed on a decisions, they would not be implemented.[18]
| Timeline of Sony/ATV Music Publishing | |
|---|---|
| 1955 | Lew Grade founds Associated Television (ATV). |
| 1957 | ATV acquires Pye Records as a wholly owned subsidiary. |
| 1957 | ATV Music Publishing is created to exploit the songs owned by ATV. |
| 1968 | ATV Music and Lew Grade acquire the rights to the Lennon–McCartney song catalogue, Northern Songs. |
| 1985 | ATV Music Publishing and Pye Records are put up for sale. They are bought Robert Holmes à Court. |
| 1985 | ATV Music Publishing and its assets, Pye Records and Northern Songs, are again put up for sale. Singer Michael Jackson acquires them for $47.5 million. |
| 1995 | Jackson merges ATV Music Publishing with Sony. He earns $90 million in the venture. |
| May 2001 | Jackson declares that The Beatles' songs "will never be for sale". |
| November 2001 | Sony/ATV Music Publishing acquires Tony Martin's Baby Mae Music catalogue of 600 songs. |
| July 2002 | Sony/ATV Music Publishing buys country music publisher Acuff-Rose for $157 million. The venture includes publishing rights to 55,000 songs. |
| 2007 | Sony/ATV Music Publishing acquires Famous Music, a music publishing business with song catalogue of more than 125,000 songs. |
In May 2001, Jackson denied rumours that he was planning to sell the Beatles' song catalogue. Rumours had circulated that the singer was to sell them in order to finance the upkeep of Neverland Ranch and to cover legal bill expenses.[20] The singer announced in a statement, "I want to clarify a silly rumour - The Beatles catalogue is not for sale, has not been for sale and will never be for sale.[20] Sony/ATV Music Publishing continued to acquire song catalogues in the 21st century. In November 2001, the company signed country singer Tony Martin to an exclusive songwriting and co-publishing deal. Through the deal, they acquired Martin's Baby Mae Music catalog of 600 songs, which includes Joe Diffie's "Third Rock from the Sun" and Jeff Carson's "Not on Your Love".[21] In July 2002, Sony/ATV Music Publishing bought veteran country music publisher Acuff-Rose for $157 million. The venture included music publishing rights to 55,000 country music songs, including the music of Hank Williams, The Everly Brothers and Roy Orbison[22][23] as well as the master recordings of the defunct label Hickory Records. Sony/ATV revived Hickory Records as the in-house record label imprint in 2007, with distribution handled by Sony Music's RED Distribution.[24] Sony/ATV also owns the masters of Dial Records, Four Star Records and Challenge Records.[25]
In 2006, Sony obtained an option to buy half of Jackson's stake in the company at any time for a fixed price of $250 million.[26][27][28][29] Sony has not exercised the option.
Digital sheet music provider Musicnotes.com announced in June 2006 that they had signed a long-term distribution agreement with Sony/ATV Music Publishing. Musicnotes.com would produce and sell digital sheet music and guitar tablature for songs from Sony/ATV's extensive catalog.[30] "As a music publisher, we are always looking for new and innovative ways to promote our songs and songwriters", Sony/ATV chairman and chief executive David Hockman announced in a statement.[30] Another company acquisition was made in 2007, when Famous Music, a music publishing business with song catalogue of more than 125,000 songs including "Moon River" and "Footloose", was sold to Sony/ATV Music Publishing. The deal, sought by Viacom, included the assumption of around $30 million of debt. The company purchased the business for $370 million. The song catalogue also includes the hits of Eminem, Akon, Linda Perry, Bjork, Shakira and Beck.[31][32] With this acquisition, Sony/ATV acquired the rights to publish music from films released by Viacom's Paramount Pictures subsidiary, which had founded Famous Music in 1928 to publish music from its films (this also included films released by DreamWorks, which Viacom acquired in 2006).
Following Jackson's death in June 2009, it was revealed that Sony/ATV Music Publishing would keep control of the Beatles' songs.[33] Upon his death, Jackson's entertainment attorney, Joel Katz, commented on the singer's work as a businessman. "Michael Jackson was a perfectionist and his business affairs are worldwide. Many of them are quite ongoing and will be dealt with appropriately."[33] Ivan Thornton, a private-wealth adviser who worked with Jackson and his family, also commended the business side of the musician. "His business mind was fascinating. We’d go to meetings with bankers and Wall Street people and once I explained the language to him, he totally got it. There was no formal education there, but his natural knack was off the charts."[33]
The value of Sony/ATV Music Publishing has varied in reports. In 2002, Forbes magazine estimated Jackson's 50% stake in the company, along with other music publishing ventures, to be worth $450 million.[34] The organisation was valued at $700 million in 2003.[35] Industry experts valued the catalogue at between $600 million and $1 billion in 2004, based on the sales of rival catalogues.[36] Charles Koppelman, a veteran music industry executive, stated that $1 billion was more reflective of Sony/ATV Music Publishing's worth.[36] "Buyers would be lining up around the block if it were ever put up for sale", he said. "And I'd be in the front of the line."[36] The value of the company was further estimated by Ryan Schinman, chief of Platinum Rye, to be $1.5 billion[37]
In 2005, Jackson's defense attorney, Thomas Mesereau, revealed that the song catalogue had been valued at between $4 billion and $5 billion.[38] The company's song catalogue is believed to generate up to $80 million a year; The Beatles' hits alone bring in $30 million to $45 million a year.[36] Jackson's other publishing firm, Mijac, which publishes songs written by Jackson himself and which used to be administered by competitor Warner/Chappell Music, is valued to be worth at least $75 million.[39] Since 2011 Mijac is administered by Sony/ATV.
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