Marketplace Report: Jackson to Sell Beatles Archive?
ALEX CHADWICK, host:
Back now with DAY TO DAY. Pop star Michael Jackson is reportedly getting ready to sell off some of his assets to avoid bankruptcy, among them part of his 50 percent stake in a song collection that includes portions of the Beatles catalog. The gloved one has been skirting financial ruin for the better part of a decade. Marketplace's Tess Vigeland is here with us. Hi, Tess, and what do we know about Michael Jackson's money situation?
Ms. TESS VIGELAND (Marketplace): Well, right now, his big priority is trying to refinance more than $300 million worth of debt. He took out a huge loan, and part of the collateral for that loan is this song catalog. Jackson owns half the catalog. Sony owns the other half, and Sony has been concerned that if Michael Jackson at some point had to declare bankruptcy, his half could be sold off to the highest bidder, and that of course would make it much harder for Sony to get it back.
So in this deal Jackson would agree to sell half his stake to Sony at some point in the future, so that would be another 25 percent for them, basically giving them the option for that, and he'd also refinance those loans. And one more sign of his money problems: about a month ago Jackson had to close a good chunk of his Neverland ranch when the State of California threatened to sue over back-pay for workers there.
CHADWICK: What did Michael Jackson pay for this collection and what do you think it's worth today?
Ms. VIGELAND: Well, again, it's worth about $1 billion.
Ms. VIGELAND: And he paid significantly less than that. And again, Jackson currently owns half of that collection, so about a half a billion dollars worth. It includes more than 200 Beatles songs and lots of other classics, and entertainment lawyer Steve Gordon says because of that the money stream has been constant for him.
Mr. STEVE GORDON (Entertainment Attorney): Songs that, especially songs as popular as these, earn a great deal of income in various ways, including every time one of these songs is played on the radio or on television it generates performance income. So the catalog generates tens of millions of dollars a year.
Ms. VIGELAND: And Jackson has been extremely reluctant to let go of that income, so Gordon says today's news of this potential deal shows a real desperation on his part.
CHADWICK: Tess, you mentioned the Beatles song in this catalog. Isn't there news about the Beatles on the Internet today?
Ms. VIGELAND: Yeah, you'll remember that Apple Computer went to court last month in London to fight a trademark lawsuit that was filed by Apple Corps, which is The Beatles' record company. Well, there was testimony during that case that the record company is currently in the process of digitally re-mastering the entire catalog, and that, of course, would make it possible to put it online and make it available for downloading. Right now, you can't get the Beatles online, at least not legally.
And today on Marketplace, we have the latest on plant closures at Ford.
CHADWICK: Thank you, Tess. Tess Vigeland of public radio's daily business show, Marketplace, from American Public Media.
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