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Sony Corp’s move to take full control of Sony/ATV is complete

By Chris Cooke | Published on Monday 3 October 2016

Sony Corp has completed its acquisition of the Michael Jackson Estate’s half of music publishing giant Sony/ATV, meaning the songs business is now wholly owned by the consumer electronics and entertainment giant. Though there remain other shareholders in Sony/ATV’s EMI Music Publishing subsidiary, including the Jackson Estate.

Sony announced its plan to buy out its long-term partner in its music publishing business back in March, though the deal required regulator approval. In Europe there was opposition to Sony – which also owns the second biggest record company in the world – taking complete ownership of the biggest music publisher, with reps for both the indie labels and indie music publishing community speaking out against the deal.

However, the European Commission’s competition regulator green-lighted the acquisition in August, stating that “the transaction will not materially increase Sony’s market power vis-a-vis digital music providers compared to the situation prior to the merger”.

That decision may have been influenced by the fact that, in Continental Europe, the collecting societies rather than the music publishers actually control all the elements of the song copyright that the streaming services wish to exploit, reducing the power of individual publishers in the digital domain.

Michael Jackson first bought ATV Publishing – what had begun as the music rights spin-off of UK TV company ATV – in 1985. He then went into business with Sony, with whom he was signed for recordings, ten years later, with the two firms merging their respective music publishing businesses to create Sony/ATV.

Sony paid $750 million to buy out the Estate, though an official statement said that “the payment also reflects certain contractual and accounting adjustments related to the Sony/ATV joint venture and other commercial opportunities involving Sony and the Estate”. With those technicalities accounted for, Billboard reckons the deal valued the publisher at somewhere between $2.2 billion and $2.4 billion.

Confirming the deal had now been completed, Sony/ATV boss Marty Bandier told reporters: “The completion of this deal is terrific news for Sony/ATV and everyone who works for the company. It marks the start of an exciting new chapter in our proud history and we cannot wait to get started as a 100% Sony-owned company. Sony Corporation has shown absolute faith and support in us and what we do by undertaking this deal and we are ready to repay that trust in the months and years ahead”.

It will be interesting to see if this deal results in the Sony record company and music publisher becoming more closely aligned. Although most music companies that have interests in both recordings and songs tend to keep the two businesses separate, some have tried to better integrate the two sides of music rights, especially in the sync domain. But to date the different ownership structure has generally meant Sony Music and Sony/ATV have continued to operated very autonomously.