Sony (NYSE:SNE) Buys Out Jackson Estate’s Stake In Music Catalog
$SNE, $AAPL
Sony Corp. (NYSE:SNE) agreed to pay $733-M to buy Michael Jackson estate’s stake in a jointly owned catalog of songs by artists from the Beatles to Taylor Swift.
The deal gives Sony control over the rights to almost 4-M songs as listeners from individual album purchases to subscription services offered by Apple Inc., (NASDAQ:AAPL) YouTube and Spotify Ltd.
Sony has said the growth of streaming services will help boost revenues in the music business to as much as $5.2-B in FY 2017.
“The value of music assets is increasing with the growth of streaming,” an analyst at Macquarie Group Ltd. in Tokyo said. “Sony is actually paying less than the stake is worth.”
Sony exercised its right under their joint venture to buy out Jackson estate’s stake.
Documents leaked by hackers who broke into Sony Entertainment’s computers in Y 2014 revealed that executives at the company were weighing the future of the joint venture.
Mr. Jackson purchased the ATV catalog, which was the foundation for the eventual joint venture with Sony, for about $41.5-M in Y 1985.
The deal announced Monday “further validates Michael’s foresight and genius in investing in music publishing,” said John Branca and John McClain, co-executors of the estate, in the statement. “This transaction further allows us to continue our efforts of maximizing the value of Michael’s estate for the benefit of his children.”
Sony’s shares finished flat to unchanged Tuesday on the NYSE at 24.52.
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Paul Ebeling
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