At a time when Michael Jackson was at the height of his entertainment career, and therefore his bargaining power with his record label, entertainment attorney John Branca negotiated a deal for Jackson that only acts like Ray Charles and Madonna have been able to duplicate: Jackson receives half of all profits from U.S. music sales (most artists get none) and a whopping 25% royalty rate on all sales (many artists get none, the best get 3% to 10%). These, however, are not exactly IP assets, but contractual benefits. Michael Jackson’s real assets, and his most valuable, are the IP assets he owns in Sony/ATV Music Publishing’s catalog - a 50% stake in all the copyrights therein.
Here is an interesting part of an article from the Sydney Morning Herald regarding Jackson’s remaining IP assets he leaves behind:
Jackson’s most valuable asset is his 50 per cent share in the Sony-ATV Music Publishing catalogue, which people with knowledge of the partnership value at between $US1.5 billion and $US2 billion. The partnership has about $US600 million in debt, one person said. In what is recognised as the shrewdest business move of his career, the singer bought the catalogue in 1985 for $US47.5 million. In the early 2000s, he borrowed $US300 million against it. That makes the value of Jackson’s share, accounting for the debt, worth between $US150 million and $US400 million.
The so-called “Beatles catalogue” is famed for music written by John Lennon and Paul McCartney. It administers nearly
all of the Beatles’ greatest hits. Sony-ATV also oversees the publishing of performers as varied as Elvis Presley, Eminem and Bjork and is reportedly the fourth-largest music publisher in the world.
The catalogue generated between $US13 million and $US20 million for Jackson annually, said people close to the singer.
A second catalogue, Mijac Music Publishing, includes Jackson’s music as a solo artist as well as songs by other acts, including Sly & The Family Stone , Curtis Mayfield and Ray Charles. People close to Jackson estimated its worth at $US100 million, but it is difficult to place a current value on it because of the tremendous sales of Jackson’s music since he died.
It is also believed that Branca negotiated reversion rights for all of Jackson’s own music, meaning he will own his own copyrights outright in a few years, allowing his family to release “Greatest Hits” albums and movies while obtaining 100% of the proceeds. This feat by Branca for Jackson is another that is unusual, and Branca should receive a nice pat on the back for his work. Just ask The Beatles how important this is, whose copyrights are owned by Jackson (part of the Sony/ATV catalog) because they don’t have reversion rights.