Michael Jackson buys Northern Songs

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From Wikipedia:

Takeover of ACC

In the late 1970s, the parent company of ATV Music, now known as Associated Communications Corporation (ACC) began experiencing financial difficulties. From 1978 to 1981, ACC’s profits declined due to losses in its film division, and share prices dropped dramatically. In 1981, Grade entertained offers for Northern Songs, drawing interest from several bidders. McCartney, with Lennon’s widow Yoko Ono, offered £21 million but the offer was declined by Grade who decided not to sell Northern Songs separately after other suitors, including CBS Songs, EMI Music Publishing, Warner Communications, Paramount Pictures and the Entertainment Co. showed interest in buying ATV Music as a whole.

Meanwhile, Australian businessman Robert Holmes à Court had been acquiring shares of ACC and launched a takeover bid in earnest in January 1982. Grade resigned as chairman and was replaced by Holmes à Court who successfully acquired a controlling interest in the company. After Holmes à Court assumed control of ACC, ATV Music was no longer for sale.

During their collaboration on the song, “Say, Say, Say”, McCartney informed Michael Jackson about the financial value of music publishing. According to McCartney, this was his response to Jackson asking him for business advice. McCartney showed Jackson a thick booklet displaying all the song and publishing rights he owned, from which he was then reportedly earning $40 million from songs written by others. Jackson became quite interested and inquired about the process of acquiring songs and how the songs were used. According to McCartney, Jackson said, “I’m going to get yours [Beatles’ songs]”, which McCartney thought was a joke, replying, “Ho ho, you, you’re good”.

In 1982, Robert Holmes à Court acquired Associated Communications Corporation, the holding company of ATV Music and put ATV Music up for sale in 1984. The only song in the Northern Songs catalogue that was excluded from the sale was “Penny Lane“, the rights to which were gifted to Holmes à Court’s teenage daughter Catherine, as it was her favourite Beatles song. According to Bert Reuter, who negotiated the sale for Holmes à Court, “We had given Paul McCartney first right of refusal but Paul didn’t want it at that time”. Jackson’s attorney, John Branca, reportedly contacted an attorney for McCartney who said that McCartney would not be bidding for the catalogue because he thought it was “too pricey”. Likewise, Ono was also contacted but did not enter the bidding.

Sale to Michael Jackson

In June 1985, Jackson and Branca learned that Charles Koppelman’s and Marty Bandier’s The Entertainment Co. had made a tentative agreement with Holmes à Court to buy the catalogue for £30.5 million but in early August, Holmes à Court’s team contacted Jackson again, with both sides making concessions. These included Holmes à Court adding more assets and agreeing to establish a scholarship at a United States university in Jackson’s name. Although Koppelman/Bandier offered a higher bid, Jackson’s bid of £24.4 million was accepted because he could close the deal quickly, having completed due diligence of ATV Music prior to any formal agreement. The deal was signed on 10 August 1985. After the acquisition, Jackson and McCartney appeared together in a photograph, reportedly to dispel rumours about their falling-out over Jackson’s ownership of the Beatles’ songs.

In a July 2009 interview on the Late Show with David Letterman, shortly after Jackson had died, McCartney spoke about his reaction to Jackson’s purchase of the ATV music catalogue:

“Which was, you know, that was cool – somebody had to get it, I suppose. What happened actually was then I started to ring him up. I thought, here’s the guy historically placed to give Lennon–McCartney a good deal at last, ‘cos we got signed when we were 21 or something in a back alley in Liverpool. And the deal, it’s remained the same, even though we made this company the most famous – hugely successful. So I kept thinking, it was time for a raise … I did talk to him about it, but he kind of blanked me on it. He kept saying, ‘That’s just business, Paul.’ You know. So, I thought, ‘Yeah, it is,’ and waited for a reply, but we never kind of got to it … It was no big bust-up. We kind of drifted apart after that”.

Merger with Sony Music Publishing

In 1995, Jackson merged his catalogue with Sony Music’s publishing for a reported £59 million, establishing Sony/ATV Music Publishing, in which he retained half ownership. As a company, Northern Songs was dissolved in 1995. In April 2006 a package was proposed whereby Jackson would borrow £186,480,000 and reduce the interest rate payable on a loan he had, while giving Sony a future option to buy half of Jackson’s stake in their jointly-owned publishing company, leaving Jackson with a 25% stake. Jackson agreed to a Sony-backed refinancing deal, although the finalised details were not made public. Jackson’s estate sold its remaining stake to Sony in 2016, and the company’s name was reverted to Sony Music Publishing in February 2021.

From The Beatles Monthly Book, N°114, October 1985:

In a move that has rocked the music industry on both sides of the Atlantic, Michael Jackson purchased the music publishing company ATV Music from Associated Communications Corporation on August 10 for a reported $47,500,000 (about £34 million) — thereby obtaining complete world rights to ATV subsidiary Northern Songs, the company set up in February 1963 to publish Lennon/McCartney and some other Beatles songs. Northern’s Beatles treasury is vast, containing – in the UK at least — all but four of John and Paul’s compositions up to and including 1971, plus numerous other oddities, a total of 256 massive and perennial money-spinners. (Northern accounted for half of ATV’s annual revenue of $15 million / £10,800,000 last year.) Northern Songs also has hundreds of non-Beatles tunes in its catalogue — all now owned by Jackson – along with ATV’s other 5000+ songs, including compositions by Little Richard, the Pretenders, Pat Benetar, Kenny Rogers and the Pointer Sisters.

That it should be Michael Jackson — Paul McCartney’s recording partner on three songs in the past three years — who has finally bought control of ATV has shocked music industry observers and Beatles fans alike, owing to Paul’s well-publicised desire to buy back what he calls ‘his babies’. With Yoko Ono, Paul made a joint bid of £21 million in 1981, which was subsequently rejected, and he has reportedly made other similar moves since then. Jackson also outbid the Coca-Cola Corporation, EMI, CBS and the Lawrence Welk Group, all of whom have shown keen interest in ATV since 1981, when it was announced that the catalogue might be sold. […]

Mark Lewisohn

Last updated on November 9, 2021