Sony Music Group Acquires 50% Stake In Michael Jackson's Mijac Music For $600 Million

A deal that has been rumored for over a year and spawned at least one lawsuit seeking to prevent it from happening has officially closed. Sony Music Group just paid Michael Jackson's estate $600 million for a 50% stake in Mijac Music. In addition to all of Michael's personal music and assets, Mijac also owns thousands of songs from artists including Sly and the Family Stone, Jerry Lee Lewis, Jackie Wilson, Curtis Mayfield, Ray Charles, and more. An estimated 15% of the sale will go to Michael's estate executors, leaving the estate to split proceeds of roughly $500 million after all costs.

Understanding Michael Jackson's Estate Distribution

According to the terms of Michael's will, his estate was distributed as follows:

• 40% was left to his three children, to be split evenly. Those three children are Paris Jackson, Prince Michael Jackson, and Blanket Jackson.
• 40% to his mother, Katherine Jackson. Upon Katherine's death, her 40% balance goes to Michael's kids, which means eventually, his three children will split 80% of the estate (26.7% each).
• 20% was left to various children's charities.

This means that the estimated $500 million from the sale will likely be divided as follows:

• $200 million to his three children, approximately $67 million per child.
• $200 million to his mother.
• $100 million to charity.

The Valuation of Mijac Music and Its Stakes

Primary Wave previously owned, and will continue to own, 10% of Mijac. That leaves a remaining 40% stake for Jackson's heirs. At the overall valuation of $1.2 billion, that 40% stake is worth $480 million. This gives each of the above heirs the following paper values on their remaining respective stakes:

• $192 million for the children, approximately $64 million per child.
• $192 million for his mother.
• $96 million for charity.

What’s Excluded from the Deal?

Interestingly, one aspect of the MJ catalog that is not included in the deal is royalties from "MJ," the Broadway musical currently doing big numbers, or any other theatrical productions that use Jackson's music. This exclusion could have implications for future revenue streams linked to the musical legacy of Michael Jackson.

Background on Jackson's Estate Management

The Jackson estate reportedly wanted between $800 million and $900 million when they first began seeking buyers for a stake in their assets. However, the final purchase price might include different assets rather than a straightforward discount. The value of the music has increased in the years since his death, and a biopic about the artist starring his own nephew Jaafar Jackson is set to hit theaters next year.

In May 2023, for reasons that were never made public, Katherine Jackson actually sued to prevent the sale from going forward. This legal move highlights the complexities and emotional undertones surrounding the management of the estate.

The Legacy of Michael Jackson and Sony

Jackson had a long relationship with Sony and its predecessor, CBS, during his music career. This relationship began during his latter days with the Jackson 5 and extended throughout his entire solo career. His lawyer, John Branca, and executive, John McClain, who have managed his estate since his death in 2009, will reportedly continue in their present roles even after Sony takes over the half-ownership stake in the catalog.

Financial Recovery of the Jackson Estate

When Branca and McClain took over the estate upon Michael's 2009 death, the financial picture was dire. Michael Jackson's net worth at the time of his death was technically negative. By most reasonable estimates, his net worth was negative $500 million. However, under Branca and McClain's guidance, the estate has staged an unbelievable financial comeback. Since Michael Jackson died in 2009, his estate has brought in over $700 million before this latest deal.

The Beatles Catalog Context

It's also important to note that the sale of 50% of Mijac has nothing to do with the infamous Beatles catalog. Michael bought the Beatles' song catalog in the 1980s for around $50 million. In 1991, Sony paid Michael $100 million to form a new company called Sony/ATV, which merged some of Sony's music assets into the new entity. Sony/ATV was worth $1-2 billion at the time of his death; however, Michael had borrowed hundreds of millions of dollars against the value to fund his lifestyle in his later years. In 2016, Sony acquired the other half from Michael's estate for $750 million. Today, Sony/ATV controls over 2 million songs and is worth between $2-4 billion.