Sony looks to sell its half of music-publishing unit Sony/ATVScreen Shot 2015 07 17 At 11.04.15 AM

Sony looks to sell its half of music-publishing unit Sony/ATV

Sony Corporation is taking steps to sell off its half of music publishing unit Sony/ATV Publishing. The decision to sell appears to be motivated by efforts to raise cash (Sony/ATV operates independently from Sony’s record label, Sony Music Entertainment). Sony is undergoing a multi-year restructuring process to reduce its dependence on its consumer electronics businesses.

Talks of the sale have been circulating between top executives for nearly a year, if not longer. In confidential emails that were hacked and posted online in November 2014, Sony Corporation of America’s CFO Steve Kober wrote of the potential sale to Sony Entertainment CEO Michael Lynton.

The co-owner of the unit is the Michael Jackson estate. Sony/ATV is the world’s biggest music publishing company, and has been jointly owned by Sony and the late Michael Jackson since 1995. After his death, ownership reverted to his estate.

The breadth of the company’s catalog is extensive: works of artists like the Rolling Stones, Taylor Swift, Calvin Harris, and the copyrights to most Beatles’ songs. The value of the entire organization is estimate around $2 billion, though those numbers are not public. As a publisher, Sony/ATV owns the rights to the lyrics and melodies of songs, and can license them to labels, film studios, and others. Licensing the use of a song is almost always more lucrative than licensing the use of a particular recording of that song.

Sony triggered a clause in its contract with Michael Jackson’s family, which allows one party to buy out the other. The auction isn’t public, though lenders were notified when Sony triggered the exit clause. The process doesn’t necessarily guarantee that Sony will be successful in selling its half but the structure gives each half the option to counter any offer to buy out the other half.

Via: Wall Street Journal

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