Saturday, November 13, 2010

Paul McCartney refused an offer to buy the ATV Catalog for £20 million ($40 million USD)

Below is an audio clip (length: 1 min 44 s) with transcript of Paul McCartney speaking at a 1990 press conference about the 1981 offer[1][2][3] and a summary of events leading to Jackson's 1985 acquisition of the catalog.
(Offer was stated as $20 million USD in the two articles below but in the clip McCartney says it was £20 million GBP, which was approximately $40 million USD in 1981.[6]
"Newsmakers: McCartney Blames Yoko For Jackson's Beatles' Purchase". Jet. Vol. 78, No. 4. 7 May 1990. Chicago: Johnson Publishing Company. ISSN 0021-5996 p.38
"Report: Michael Jackson Gets McCartney-Lennon Publishing Rights". AP. New York: Associated Press. 14 Apr 1990.)
Click the play button a second time if the clip doesn't load the first time.

Download the audio clip (mp3, 1.59 MB).
Transcript (Note: Info inside "[ ]" was added for clarification and also to indicate the time in the audio clip)
When we first started writing songs, we didn't know anything about owning songs. Most people don't. It's like you write your first novel and you just want to get published. That's all you want. Don't care about the deal. Just want to get on the bookstores or in our case, in the record stores. [0:16] So our first deals, we didn't know anything about rights or anything. We actually thought songs just were in the air and that everyone owned them. That was like how innocent we were, you know. And you know, still a lot of people think that way. Anyways, so we never really had much ownership. And what happened was, at a certain point these songs changed hands from the original publisher, to another guy and then to another guy. [0:40] And at one of these junctures, I was offered the songs to buy for £20 million pounds [approximately $40 million USD in 1981].[6] The problem for me was I didn't want to be Paul McCartney owning John Lennon's bit of the songs. I felt that would be like unfair. I wanted to own my bit of the songs but I wanted John or his estate as it then was [Lennon died on Dec. 8, 1980], to own his side of it. I thought it would be perceived as a bit kind of grabby of me if I just moved in, "yeah I got all the songs". I wasn't comfortable with that. [1:14] So I rang up Yoko and I said, "We have an opportunity to buy these songs. 10 million [pounds] you, 10 million [pounds] to me and we'll have it." And she actually said "I think we can get it for 5." So I said, "Well ok, you know, let's see what we can do." And we couldn't. They went for 50 [million USD] in the end. So that was what happened with me, cuz...cuz, you know, that was my pounce to do it 10 [million GBP] each. But I think Yoko...So Michael paid 50 [million USD] in the end.
After 1981
In 1982, Australian investor and corporate raider Robert Holmes à Court acquired Associated Communications Corp,[7] the parent company of ATV, of which ATV Music Publishing was a subsidiary.[8] Michael Jackson was first informed that the ATV music catalog was available for sale in Sept. 1984 by his attorney, John Branca, who had helped him acquire other music catalogs. Although McCartney did not bid, there were other investors and music industry executives competing for the ATV music catalog, including Charles Koppelman and Marty Bandier's the Entertainment Co., Virgin Records, New York real estate tycoon Samuel J. LeFrak, and financier Charles Knapp.[9] According to Bert Reuter, who negotiated the catalog sale for Holmes à Court, "we had given Paul McCartney first right of refusal but Paul didn't want it at that time."[10] Branca also reportedly contacted an attorney for McCartney, who said McCartney was not interested in bidding for the catalog because it was “too pricey”.[1][2] At the time, McCartney was one of the richest entertainers in the world, with a net worth of $560 million and a royalty income of $41 million.[1] (His personal wealth was estimated to be £500 million/ $926 million USD in 2008[4][6] and £475 million/$739 million USD in 2010, making him the wealthiest musician still currently performing.[5]) Likewise, Yoko Ono was also contacted but did not enter bidding.[2]

Jackson placed a bid for $46 million on Nov. 20, 1984. Branca suggested the amount of the offer based on his analysis of the earnings of ATV Music and his awareness of another bid for $39 million. Jackson was only interested in buying the music copyrights but the package also included buildings, a recording studio, some studio equipment and life insurance policies on the Beatles (presumably ATV collected Lennon's in 1980). After the two sides agreed to a non-binding memorandum of mutual interest in Dec. 1984, Jackson's team took four months to complete due diligence of ATV Music, verifying its legal documents in its offices around the world and every significant composition in the nearly 4000-song catalog. Jackson's team was also involved in a protracted series of negotiations where they reported frequent shifts of position by the other side. They thought they had a deal several times, only to encounter new bidders entering the picture or new areas of debate. In May 1985, despite having spent hundreds of hours and over $1 million, Jackson's team walked away from negotiations after the contract for the prospective deal had gone through eight drafts.[9]

In June 1985, Jackson and Branca learned that Koppelman/Bandier had made a tentative agreement with Holmes à Court to buy the catalog for $50 million. In early Aug. 1985, Holmes à Court's team contacted Jackson and was again open to negotiations. Jackson raised his bid to $47.5 million. Holmes à Court included some more assets and agreed to establish a scholarship in Jackson's name at a U.S. university. Jackson's bid was accepted over Koppelman/Bandier's higher bid because he could close the deal more quickly, having completed due diligence of ATV Music prior to any formal agreement. The deal was signed on Aug. 10, 1985.[9] In Oct. 1985, Jackson appeared on the Channel Seven Perth Telethon to fulfill a contract provision requested by Holmes à Court, speaking briefly and meeting with two children.[9][10]

  1. ^
  2. ^Doyle, Jack. "Michael & McCartney" 1980s-2009. The Pop History Dig. (section: "Jackson Invests") 7 July 2009.
  3. ^Sullivan, James. "Twisted Tales: Paul McCartney's Financial Advice to Michael Jackson Backfires". Spinner Canada. 11 Sept 2009.
  4. ^
  5. ^
  6. ^"Pacific Exchange Rate Service: Foreign Currency Units per 1 U.S. Dollar, 1948-2009". (PDF file). The University of British Columbia Sauder School of Business Pacific Exchange Rate Service.
  7. ^Holmes à Court, Michael Robert Hamilton (1937 - 1990). Australian Dictionary of Biography Online Edition. The Australian National University. Melbourne University Publishing.
  8. ^BFI Screenonline - Broadcaster and Industry Bodies > ITC. BFI Screenonline.
  9. ^Hilburn, Robert. "The long and winding road". Los Angeles Times. 22 Sept 1985.
  10. ^"Michael Jackson's visit to Perth (Australia) in 1985 for Channel 7's Telethon" (video from Australian news show). Today Tonight. 7 Perth. 25 June 2009. Coverage of the sale of ATV Music begins at 2:36.
Paul McCartney talks about Michael Jackson and ATV catalog in July 2009 (video)