After emerging as a possibility in the wake of a massive hack last year, Sony Corp’s rumored ambition to sell its 50 percent stake in Sony/ATV is inching closer to a reality.
Sony/ATV is a 50/50 joint-venture between Sony Corp. and the Michael Jackson estate. Sources have told the Wall Street Journal and Financial Times that Sony Corp. has pressed the button on a buy-sell clause, which means the late King of Pop’s estate now has the option to buy out its partner's share. Billboard is seeking to independently confirm the news. If true, it is anticipated the sale could fetch more than $1 billion.
Sony Corp. and Jackson’s estate also own a combined 39.8 percent -- 29.8 percentage points by the former and almost 10 percentage points by the latter -- of EMI Music Publishing, thanks to a consortium put together by then-Sony Corp. of America CFO Rob Wiesenthal. That consortium -- which also consists of Mubadala Development, Jynwel Capital Ltd., the Blackstone Group's GSO Partners and David Geffen -- paid $2.2 billion in June 2012 for EMI's publishing catalog. EMI Music Publishing itself generates about $750 million in annual revenue.
A true music publishing giant, Sony/ATV and EMI's assets include such crown jewels as the former's Beatles catalog and the latter's Motown catalog. Led by chairman/CEO Martin Bandier, Sony/ATV Music Publishing reported annual revenue grew to about $664 million for fiscal year ended March 31, 2014, up from $560 million in the prior year.
The rumor mill ground away last year thanks to a string of emails leaked in the Sony Pictures hacks. According to one of those leaked messages, Sony CFO Kenichro Yoshida raised concerns about the music publishing business, who understatedly remarked that the company "has a rather complex capital and governance structure and is impacted by the market shift to streaming." In a recent group interview, Sony president Kazuo Hirai said his company's turnaround is going well (not counting smartphones).
This is a developing story, more to come...