Going For a Song
By J. Randy Taraborrelli
The Blade (Toledo, Ohio)
May 31, 1991
While Michael Jackson was on the road with the Victory Tour, he made headlines in 1984 by purchasing the ATV Music Publishing Co. for an astonishing $47.5 million. The purchase, believed to be the biggest publishing acquisition of its kind ever by an individual, was the culmination of 10 intense months of negotiations.
The seed for this venture had been planted a few years earlier, when Michael was in London to record the number-one hit "Say Say Say" with Paul McCartney at Abbey Road Studios. Michael became friendly with Paul and Linda McCartney during his stay. He ate most of his meals at their home outside of London. One evening after dinner, Paul displayed a thick booklet of song titles to which he owns the rights, including most of Buddy Holly's material and standards, such as "Autumn Leaves", "Sentimental Journey", and "Stormy Weather."
"This is really the way to make big money," he explained to Michael. "Every time someone records one of these songs, I get paid. Every time someone plays these songs on the radio or in live performances, I get paid."
"You're kidding me, right?" Michael said.
"Do I look like I'm kidding?" Paul countered with a serious expression. McCartney reportedly earns more than $40 million a year from record and song royalties. Paul explained that the world of publishing can provide lucrative opportunities, especially thanks to the CD explosion and the increased use of popular songs in advertisements, movies, and television.
Songwriters often lose the copyrights for one reason or another. Sometimes they sell them for profit, a short-sighted thing to do, especially nowadays when so much money is generated in the music industry, and often they lose them out of ignorance, as in the case of the Beatles, who simply signed away rights when they were naive and didn't know any better.
As it happened, Paul McCartney and John Lennon had sold their copyrights to a publisher named Dick James when they were young. James ended up making a fortune on the Beatles' songs. Then, in the late 60s, when the Beatles were on vacation in Rishikesh with the Maharishi Mahesh Yogi, James sold Northern Songs, the company that continued to hold the rights to the Beatles' compositions, to Lew Grade's ATV Music Ltd. for tax reasons. ATV was later purchased by Australian businessman Robert Holmes, a Quartz Bell Group.
For the next couple of hours, Paul and Michael discussed publishing, and Michael observed and absorbed everything. Paul would one day regret this conversation. When Michael said to him, "Maybe someday I'll buy your songs." Paul laughed. "Great," he said. "Good joke."
But Michael wasn't joking. "I gave him a lot of free advice," Paul would later say, "and you know what? A fish gets caught by opening its mouth. Someone rang me up one day and said, 'Michael bought your songs', and I said, 'What!?!' I think it's dodgy to do things like that," Paul complained, "to be someone's friend and then to buy the rug they're standing on."
Michael tried to phone McCartney and discuss the matter, but every time he did, Paul hung up on him. Finally, Michael said, "Paul's got a real problem, and I'm finished trying to be a nice guy. Too bad for him, I got the songs, and that's the end of it."
Robert Hilburn, in an excellent analysis of the ATV acquisition for the Los Angeles Times, explained what Michael's purchase meant, and the dollars and cents. "If, for instance, 'Yesterday' earned $100,000 a year in royalties from record sales, airplay, and live performances (it probably earns more). The Lennon Estate and McCartney, as co-writers, divide about 50% of that income, about $25,000 each. The publisher, now Michael Jackson, collects another 50%. The publisher also controls the use of the songs in terms of films, commercials, and stage productions. If bought at a reasonable price and well-administered, catalogs are considered an excellent investment. They are such good investments, in fact, that it is increasingly difficult to find one on the market."
As soon as Michael made the purchase, he and his representative investigated ways to make it pay off for him. He hired people to develop an anthology series of four films using the Beatles' music, including Strawberry Fields, an animated feature, Back in the USSR, a movie based on Russian rockers, and films based on "Eleanor Rigby" and "The Fool on the Hill". Michael also planned musical greeting cards and music boxes.
When he licensed the song "Revolution" to Nike for a sneaker ad, he obtained Yoko Ono's consent, but not Paul McCartney. In fact, McCartney, like many Beatles fans, was incensed because he felt Michael was cheapening the music. In the end, McCartney had to accept Michael's decision. "I have no question of his owning it," he said. "It was perfectly for sale, fair, square, and all above board."
So now every time someone performs one of the songs he wrote between 1964 and 1971, he has to pay Michael Jackson. Also, ATV owns a life insurance policy on McCartney, which Michael now retains. So, if Paul McCartney dies, Michael Jackson could end up with millions.
When Michael sold "All You Need Is Love" to Panasonic for $240,000, McCartney contacted him and told him he was "going too far", but Michael felt that by using the Beatles songs in commercials, he was enabling the music to reach a new generation of fans who would buy the Beatles records. "Well, I don't like the idea that Michael Jackson is the only guy in the world who gets to sit in judgment as to which Beatles songs can be used in commercials," Paul countered. "He's drawn up a list! I don't see how he should have that power."
Yoko Ono seems satisfied with what Michael is doing with the Beatles catalog, and has called his ownership "a blessing." She said, in November 1990, "Businessmen who aren't artists themselves wouldn't have the consideration Michael has. He loves the songs. He's very caring. There could be a lot of arguments and stalemates if Paul and I owned it together. Neither Paul nor I needed that. If Paul got the songs, people would have said Paul finally got John, and if I got them, they'd say, 'oh, the dragon lady strikes again.'"
In 1990 Paul and Michael met to discuss what Paul called "this problem". McCartney recalled the conversation. "I put it to him this way: when we signed our deal, John and I didn't even know what publishing was. We thought songs were in the sky, and everyone owned them. These days, even kids know better than that.
"Last year, 'Yesterday' passed the 5 million plays mark in America, which no other song has ever done, not even 'White Christmas', but no one has ever come up to me and said, 'Hey, man, I really think you need a bonus, you've done great for this company.'"
Michael acted as though he didn't understand what Paul was saying, so Paul spelled it out for him. "I wanted him to recognize in the deal that I'm a big writer for this company that he now owns." McCartney recalls Michael told Paul that he "didn't want to hurt anybody", and McCartney said he was happy to hear that. "He's a genuine bloke, Mike is," Paul would say of him. Michael promised that he'd try to work something out for him.
The next day, John Eastman, Paul's attorney, telephoned John Branca and told him that Paul and Michael had agreed to renegotiate a higher writer's royalty for his songs. Branca checked with Michael. "Heck, no, I didn't tell Paul that," Michael said."He's not getting a higher royalty unless I get something back from him in return."
Branca passed Michael's decision on to Paul's attorney. "Then we'll sue," Eastman threatened. "Hey, be my guest", Branca told him.
A former employee of Branca's recalled that when Branca told Michael that Paul might sue, Michael scoffed." Let him sue. Meanwhile, go license some more songs, Branca. Let's go out there and make some money. Let's run this thing like a business."
Said an associate of Michael's privately. "Michael's feeling is this: Paul McCartney had two chances to buy the company. Both times, he was too cheap to spend the bucks. Mind you, Paul is said to be the richest entertainer in the world. The man is worth about $560 million. His royalties in one year come to $41 million. As Mike told me, 'If he didn't want to invest $47.5 million in his own songs, then he shouldn't come crying to me.' "
He's a hard-hearted son of a gun; Michael Jackson is just like his father. And when it comes to Paul McCartney, Michael doesn't want to know anything. "I've got those songs fair and square", he said. "They're mine, and no one can tell me what to do with them, not even Paul McCartney. He'd better learn to deal with it."
By acquiring ATV, Michael Jackson proved himself a perceptive, hard-headed businessman. He's probably exactly the kind of businessman his father, Joe, would like to be, but isn't. Where Joe bullies Michael in gravitates, where Joe shouts, Michael listens. Michael has had the wisdom to surround himself with brilliant people and then allow them to do their jobs without interference. Joe never did. It's almost as though Michael studied Joe's techniques and then did exactly the opposite. What father and son shared was that they trusted no one and could be ruthless toward those they had vanquished. Neither father nor son allows anyone a second chance.
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