Court clears Michael Jackson estate to proceed with catalog sale to Sony at $1.5b valuation

A California appeals court has given a final green light to Michael Jackson’s estate to proceed with a sale of the music legend’s catalog to Sony Music valued in the hundreds of millions of dollars.

The decision overturns objections raised by Michael Jackson’s mother, Katherine Jackson, who argued that the sale of the estate’s “single most valuable asset” violated her son’s wishes.

The court’s final ruling, issued on Wednesday (August 21), supports a preliminary ruling handed down on July 17. Katherine Jackson had claimed that the sale was not in her son’s best interest and that the catalog’s value would continue to rise. However, the court determined that the executors of Jackson’s estate had the authority to proceed with the sale under the terms of his will.

“The will gave the executors broad powers of sale, with no exception for the specific assets at issue in this case,” the court said. “As such, the probate court did not err in concluding that it was Michael’s intent to allow the executors to sell any estate assets, including those at issue in the proposed transaction.”

“the probate court did not err in concluding that it was Michael’s intent to allow the executors to sell any estate assets, including those at issue in the proposed transaction.”

California’s Second District Court of Appeal

The court also noted that Katherine Jackson “forfeited her contention that the proposed transaction violates the terms of Michael’s will” by failing to raise them in the initial probate proceedings.

The sale, first reported in February, will see Sony Music acquiring 50% of Jackson’s publishing and recorded masters catalog. MBW understands that the deal valued the Jackson estate’s music rights at around $1.5 billion, implying a sale price of around $750 million for the transaction. If confirmed, that would top the GBP £1 billion (USD $1.31 billion) at which Queen‘s catalog was valued in its recent sale, also to Sony Music.

The Michael Jackson deal was subject to court approval due to the ongoing probate process related to Jackson’s estate, which has been ongoing since the singer’s death in 2009.

In April 2023, Judge Mitchell Beckloff dismissed Katherine Jackson’s concerns, ruling that the deal could proceed. Katherine Jackson then appealed the decision, leading to the recent appellate court ruling.

Despite her objections, the court found that the sale was a valid business decision that would benefit the estate.

“In 2010, the probate court authorized the executors to continue to operate Michael’s businesses. Those businesses operate through multiple companies, including joint ventures with third parties, and control the rights to Michael’s song recordings and musical compositions, among other things,” the court said.

“the proposed transaction is not a gift or distribution of estate assets — it is an asset sale, pursuant to which the estate receives a significant monetary payment and interest in a joint venture in exchange for the transfer of assets.”

California’s Second District Court of Appeal

The ruling also dismissed Katherine Jackson’s claims that the sale would violate inheritance laws.

The court stressed that “the proposed transaction is not a gift or distribution of estate assets — it is an asset sale, pursuant to which the estate receives a significant monetary payment and interest in a joint venture in exchange for the transfer of assets.”

It added that a sale of Michael Jackson’s catalog is authorized under his will and gives the executors “full power and authority” to “sell” or “otherwise dispose of” estate property.

“While the proposed transaction will result in the estate exchanging assets for cash and other valuable rights, it neither diminishes the estate’s value nor impairs the executors’ future ability to transfer the estate’s assets to the trust,” the court added.

In response to Katherine Jackson’s legal efforts, the estate’s executors — attorney John Branca and A&R executive John McClain — had earlier revealed that she had received over $55 million since Michael Jackson’s death. The executors also argued that they had consistently provided for her care and maintenance, including more than $33 million in cash.

Sony has had a longstanding business relationship with Michael Jackson and his estate. The partnership began in 1995 when Sony acquired half of ATV Music, a company that held the rights to a vast music catalog, including songs from The Beatles, that Michael Jackson had acquired in the 1980s. This acquisition led to the formation of Sony/ATV.

In 2016, Sony purchased the remaining half of Sony/ATV for $750 million. Two years later, Sony acquired the rights to distribute Michael Jackson’s recorded music for seven years at a cost of $250 million.

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