Sony effectively wrested control of the valuable Beatles song catalog from the indebted pop singer Michael Jackson.
Sony, which has been in partnership with Jackson since 1997, now has an option to buy half of Jackson’s stake – representing 25 percent of the catalog – sometime in the next few years.
At the same time, Sony orchestrated a refinancing of Jackson’s loans in a bid to help the singer, who was acquitted last year of child molestation charges, avoid bankruptcy.
The loans, valued at about $270 million, are held by the New York hedge fund Fortress Investment Group, which purchased the loans from Bank of America last year.
And Jackson is likely to use the funds from selling a portion of the catalog to Sony to pay off some of his debt.
“Following negotiations with several leading financial institutions, Mr. Jackson has concluded refinancing with affiliates of Fortress Investment Group, the lender that currently holds secured debts that were previously held by Bank of America,” according to a statement issued by the Jackson camp.
A source said the value of Sony/ATV Music Publishing, which includes the Beatles songs, is worth about $1 billion. Jackson and Sony are roughly equal partners in the venture.
Jackson, who lately has been holed up in Bahrain, paid $47.5 million in 1985 to acquire the Beatles’ publishing rights, and later merged the catalog with Sony’s music publishing business.
In addition to the Beatles, Sony/ATV is also the largest holder of country-music copyrights.