RENEE MONTAGNE, Host:
The hottest tickets in town here in Los Angeles are those to Michael Jackson's memorial being held here tomorrow. Of the 1.5 million fans who registered online for a random drawing, just under 9,000 snag a ticket. When he died on June 25th, Jackson left behind a tangled web of assets and a mountain of debt. Among the assets, the most valuable is considered his share of ATV Music Publishing, which has the rights to more than 4,000 songs, including most of the Beatles' catalog.
NPR's Elizabeth Blair reports.
ELIZABETH BLAIR: The ownership of Beatles' songs is - forgive the pun - a long and winding road. In the 1960s, there was Northern Songs, the company co-founded by the Beatles. But the musicians didn't own enough of the company to prevent it from being sold to ATV, a British television company. And the Beatles lost control of the publishing rights to most of their songs.
ATV was eventually bought by an Australian tycoon. In 1985, he sold it to Michael Jackson for around $47 million. But he kept the rights to one song, apparently because his daughter liked it.
(Soundbite of music "Penny Lane")
THE BEATLES (Band): (Singing) In Penny Lane there is a barber showing photographs of every head he's had the pleasure to know.
BLAIR: Music publishers collect the money a song earns from record sales, radio airplay, licensing, and split that money - usually 50/50 - with the song writers, and it can be very lucrative. After finding that out the hard way, Paul McCartney started buying lots of songs by people like Buddy Holly and Broadway show tunes like "Hello Dolly." In fact, McCartney took credit for giving Michael Jackson some advice about the business in a 1989 interview with CBS TV.
(Soundbite of archived interview)
Mr. PAUL McCARTNEY (Member, The Beatles): And so I said, for business, you ought to think about music publishing. It's a very good business. You love music. And then a couple of weeks later, we were chatting and he just came up to me and he said, I'm going to buy your songs, you know?
BLAIR: McCartney thought Michael Jackson was kidding, and the two had a falling-out after Jackson acquired the rights to more than 250 Beatles songs. But a decade later, Michael Jackson was in financial trouble and sold half of ATV to Sony for more than $90 million, almost twice his original investment.
Now with Jackson's death, there are questions about how much his share of Sony ATV is worth. Jackson was borrowing a lot of money using the ATV catalog as collateral. Duross O'Bryan is with AlixPartners, an accounting firm hired by the Santa Barbara district attorney to study Jackson's finances leading up to his child molestation trial in 2005. He says Sony was giving Michael Jackson huge advances.
Mr. DUROSS O'BRYAN (Managing Director, AlixPartners): Oh, I'm sure there's significant amounts owed back to Sony based on the fact that he had advanced himself money based on his overspending.
BLAIR: Based on this debt, Sony could step up as a creditor and possibly acquire Jackson's share of the catalog for a bargain price. By some estimates, Sony ATV is now worth about a billion dollars. Jackson also held the publishing rights to his own songs in his company Mi-Jack(ph) and they've been very profitable, especially now. And he borrowed millions against that company too.
Elizabeth Blair, NPR News.
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