Sony BMG seeks Michael Jackson’s backing for move to sign songwriters
Dan Sabbagh, Media Editor
Sony is in talks with Michael Jackson to renegotiate the terms of their music publishing joint-venture, which would allow Sony BMG, the sister company, to sign songwriters for the first time.
A clause in the existing agreement between the Thriller singer and the Japanese electronic giant prevents Sony backing a music publisher to rival their Sony/ATV venture, which has the copyrights to all 252 Beatles songs in its catalogue.
If Sony can persuade its volatile and cash-strapped business partner to relax or even erase the clause as part of the negotiations, that would allow Sony BMG, the recorded music concern, to become a part-competitor.
Sony BMG is desperate to enter the music publishing market because it would help to offset the collapse in recorded music and would allow the record label behind Justin Timberlake and Bob Dylan to sign up songwriters in tandem with acts.
Recorded music sales are expected to be off by as much as 11 per cent this year, but publishing has been more stable because it generates income from growing areas, such as radio airplay and use of music in advertising as well as CD and download sales.
Rolf Schmidt-Holz, Sony BMGs chief executive, said in May that we will do everything to reenter the market for music publishing.
His remarks surprised rival executives, who knew that a decision to go into publishing was not within his power. However, the existence of the previously unknown discussions explains his confidence. Discussions between Sony and Jackson are at an early stage and could collapse.
Relations between the two have been strained in the past. Sony/ATV has faced problems making acquisitions because contacting the controversial star quickly enough to agree bids has been difficult. Jackson recently agreed to allow Sony/ATV to expand aggressively under Marty Bandier, the newly appointed chief executive.
The company now also has an option, which it has so far declined to exercise, to buy a further 25 per cent of the business from its partner. It is unclear how far the shareholder agreement between the two parties will be relaxed.
There are hopes that Jackson will not have to be paid, although if that is the case he is likely to insist that Sony BMG can only sign up a handful of songwriters. Half-owned by Sony and Bertlesmann, of Germany, Sony BMG is the second-largest recorded music company in the world, but it is unique because the company does not include a publishing arm.
The music business is traditionally split into two halves. Recorded music operations find, develop and promote artists, while music publishing units handle and manage songwriter copyrights. Its rivals Universal, EMI and Warner Music all conduct both activities. Sony and Sony BMG declined to comment.