Friday, 26 June 2009

Disentangling the Michael Jackson business web

Yesterday I discussed the re-union of Michael Jackson with his illustrious manager from the 1980's, Frank DiLeo. In the intense media circus now focusing on the Jackson estate, there was live coverage from the Jackson family home (not his rented home but that of his parents and other family members) in Encino, California and references to Michael's manager advising the family about Michael's will and financial affairs. What seems to have been missed in the coverage is any account of the re-union which, based on the time line laid out in the WSJ article I alluded to yesterday in my article, must have been a relatively recent event.

When Jackson and DiLeo split in the late 1980's there was very little explanation provided but the fact that almost 20 years later, ahead of the 50 dates committed to in London, the singer and his former manager reunited seems to be worthy of some discussion to put it mildly.

A cross current that is emerging in the commentary surrounding the superstar's last few days is the very upbeat comments being made about the singer's well being, health and preparedness for the O2 shows coming from those connected to the concert promotion company and production associates, which contrasts with concerns about his health and physical state from a variety of friends and other associates.

One big headache for the Jackson estate will arise from the likely lawsuit that will be arising from Philip Anschutz's AEG Live company, which according to various reports could incur losses of hundreds of millions of dollars from the O2 concert cancellations (and an extended world tour that was also "planned"), ticket refunds and loss of sunk costs. An interesting aside to this is the fact that it appears that Lloyd's of London may not have to pay out on a non-appearance insurance policy if the singer's death can be attributed to drug related issues.

On the question of Jackson's co-ownership of the Beatles copyrights, there were anecdotal reports that Jackson had bequeathed his interest in this extraordinarily valuable music catalog to Paul McCartney but it appears from this report from Bloomberg that SONY/ATV Music have other ideas about its future.

June 27 (Bloomberg) -- Sony/ATV Music Publishing LLC, co- owned by Michael Jackson and Sony Corp., will keep control of Beatles songs following the pop singer’s death, said a person with knowledge of the venture’s plans.

Jackson, who died June 25 at age 50 in Los Angeles, owned 50 percent of Sony/ATV, which holds rights to more than 200 songs written by John Lennon and Paul McCartney, as well Bob Dylan, Neil Diamond and others. His stake is worth about $1 billion, said Ivan Thornton, a private-wealth adviser who has worked with Jackson and his family.

Sony/ATV will continue to hold the Lennon and McCartney catalog, said the person, who asked not to be named because the matter isn’t public. The U.K.’s Daily Mirror reported in January that Jackson planned to leave the Beatles rights to McCartney in his will to heal a rift between the musicians. Jackson paid $47.5 million in 1985 to buy the ATV catalog, outbidding McCartney and Lennon’s widow, Yoko Ono.

“Michael was very proud of this partnership,” Martin Bandier, chief executive officer of Sony/ATV Music Publishing, said yesterday in an e-mail. “For him this was about really honing his business skills in an area that he loved.”

Bandier declined to comment further. Paul Freundlich, the New York-based press contact for McCartney, didn’t respond to a phone call or e-mailed message seeking comment yesterday on the status of the Beatles rights.

“I feel privileged to have hung out and worked with Michael,” McCartney said in a statement posted on his Web site. “He was a massively talented boy man with a gentle soul. His music will be remembered forever and my memories of our time together will be happy ones.”

I suspect that there will be a lot more twists and turns involved in disentangling all of the claims and lawsuits that will arise from Michael Jackson's death. It will also be interesting to see how active Mr. DiLeo becomes in this process.

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