Sony plans to sell its 50% stake in Sony/ATV Music Publishing, the world's biggest music-publishing company. This follows Sony activating a clause with the Michael Jackson estate that owns the remaining stake, allowing one party to buy out the other.
Though the Japanese multinational hasn't put a price on its stake, veterans of the music industry estimate it to be worth around $1bn (£700m, €900m), according to The Wall Street Journal. The Sony/ATV business has been structured such that both partners have the right to bid for the stake they don't own and to counter any offer to buy out the other partner's stake. While lenders were notified of Sony triggering the exit clause in September, the deal is pending subject to negotiations between the two stakeholders.
According to Sony's regulatory filings, its music-publishing business generated revenues of ¥66.9bn (£365m,€495m,$558m) last year and projected the same to be ¥70.1bn for the current year. Apart from Sony/ATV, it operates a separate record label company, Sony Music Entertainment. The Japanese company's overall net profit for the quarter ended 30 June tripled to ¥82.44bn primarily due to sale of its image sensors and videogames.
It is evident from hacked Sony emails stolen by hackers and posted online that Sony was considering selling its stake in Sony/ATV for a year or more. The potential sale was mentioned in the stolen emails among top company executives in November 2014.
Michael Jackson purchased ATV Music Publishing in 1985 for $47.5m. He sold a 50% stake for more than $100m in 1995 to Sony. After Jackson's death in 2009, his stake was transferred to the Michael Jackson estate, which in 2012 along with Sony and other investors such as Mubadala Development Co of Abu Dhabi and music mogul David Geffen, acquired EMI Music Publishing for $2.2bn.
Currently, Sony/ATV Music earns a part of its revenue by administering the EMI catalogue for this investor group and it isn't clear if Sony's potential stake sale would involve any share of EMI. Also, the copyrights to a majority of the Beatles songs and songs by stars ranging from Marvin Gaye and the Rolling Stones to Taylor Swift and Calvin Harris, is included in the Sony/ATV catalogue. The catalogues which have the rights to melodies and lyrics are licensed out for various uses to generate revenues for Sony/ATV.