The real story behind Michael Jackson’s Beatles catalogue purchase [THREAD]

Michael Jackson and Paul McCartney had met years before the King of Pop famously bought the Beatles Catalogue. In 1976, the two had bumped into each other at an LA party, where Paul offered Michael a song he’d written for him. That song was called ‘Girlfriend’.

The two exchanged numbers and vowed to work together, but their busy schedules kept that from happening at the time. Paul ended up recording ‘Girlfriend’ with his band Wings, and Michael recorded it later, for his first adult solo album, Off the Wall (1979).

The early 80s saw more collaborations and the burgeoning of a friendship between the two. In December 1980, with the success of Off the Wall and ‘Girlfriend’, Michael sought Paul to write a song together, visiting the McCartney’s at their Sussex ranch a few months later.

They ended up writing two songs together - ‘Say Say Say’ and ‘The Man’, both featured in Paul’s 1983 album Pipes of Peace. They would also collaborate in ‘The Girl is Mine’, the first single out of Michael’s record-breaking album Thriller (1982).

Paul, who was 16 years Michael’s senior, saw him as a talented young man with a promising career ahead of him, while Michael, a big fan of the Beatles himself, admired Paul and gladly listened to his stories and advices about the music industry.

In October 1983, Michael, Paul and members of their families travelled to the Santa Ynez Valley for the shooting of the ‘Say Say Say’ music video. It was then that, during a lunch break, Michael asked Paul for business advice, which led to a conversation about music publishing.

Paul told Michael that music publishing was a great investment, and that he had earned millions by purchasing the rights to the songs of various artists/acts, such as Buddy Holly, Broadway catalogues, etc. Michael, who was looking for ways to invest his money, took Paul’s advice.

Through his attorney, John Branca, he first acquired a few 60s songs, and then he moved on to bigger purchases, like the Sly Stone collection. But in mid-1984, Branca would tell him of the deal that would change his life: the ATV Music catalogue sale.

In an interview for the book Michael Jackson, Inc (partly reproduced in the Forbes magazine website), Branca recalls the singer’s reaction to the news: “Yeah, so what’s that?” – Michael asked…

“I don’t know, they own a few copyrights (…) ‘Yesterday’, ‘Come Together’, ‘Penny Lane’ and ‘Hey Jude’”- Branca answered. “The Beatles?!” Michael asked. He knew right then and there that the ATV catalogue had to be his.

The ATV catalogue, which was being sold by Australian billionaire Robert Holmes à Court was made up of roughly 4.000 songs, 250 of which written by the Beatles. Before it was purchased by Michael, it had been the target of endless disputes for years.

In 1963, with the release of their first album, Beatles manager Brian Epstein sought a publisher for their music, creating a company called Northern Songs along with publisher Dick James. James became the majority owner, while Paul and John Lennon each got 20% and Epstein,10%.

According to various accounts, members of the Beatles trusted Epstein blindly and had little care with the terms of the agreement, which would later be seen as unsatisfactory. The fact that their relationship with James wasn’t easy didn’t exactly help.

Things got bad after Epstein’s death, in 1967. After a failed attempt by Paul and John to renegotiate their stakes in Northern Songs that led to a quarrel with James, in 1969 the publisher sold his shares to ATV music without notice. ATV then gained control of the catalogue.

Paul and John initially refused an offer for their shares and unsuccessfully tried to gain control of the company via smaller shareholders. Later that year, they’d end up selling their stakes to ATV, becoming completely separated from the publishing rights of their own songs.

Back to 1984, after Michael expressed interest in purchasing ATV, John Branca was ready to enter a bidding war in his name. But before he could do that, he was given an important task: to make sure that neither Paul nor Yoko Ono, who were both friends with Michael, were bidding.

“I got Yoko on the phone (…)” – Branca recalled, “And then I said, ‘Michael asked me to call you and find out if you’re bidding (…).” Yoko replied, “No, we’re not bidding on it. (…) if we had bought it, then we’d have to deal with Paul. It’d have been a whole thing (…)”.

Next, he spoke to John Eastman, Paul’s lawyer and brother-in-law. According to Branca, Eastman said that Paul wasn’t interested because the catalogue was “much too pricey.”

Holmes à Court’s right-hand man and a key negotiator in the sale, Bert Reuter, corroborated the fact that Paul was contacted and given the opportunity to purchase the catalogue before other bidders. He speaks about it in an interview for Australian TV:

With the coast clear, all that was left to figure out was the final price for the purchase. Branca had started with an offer of $30 million, but months later the price had already soared past $40 million. Michael wasn’t about to give up – he authorized Branca to raise the offer.

The big players bidding on the catalogue weren’t the only obstacle Michael and Branca were facing. Holmes à Court was a tough negotiator, known for his capriciousness and for backing out of deals at the last minute.

A bid of $45 million was enough to assure Michael a handshake deal, but the deal fell through weeks later, when Holmes à Court backed out. Michael didn’t want to lose the catalogue, so he authorized a final offer: $47.5 million and not a penny more.

Around this time, Branca discovered that Holmes à Court had been in negotiations with music industry moguls Charles Koppelman and Martin Bandier, who had offered him $50 million for ATV.

Koppelman and Bandier would soon find out that, surprisingly, Holmes à Court had decided to accept Michael Jackson’s bid, even though it meant getting $2.5 million less for the deal. The reason for that was simple: Michael could give him something no one else could.

That something was a personal appearance in the 1985 Perth Telethon, a task that Michael completed after a grueling trip of fifteen hours from Los Angeles to Sydney, and then another five to Perth. In his brief visit, he’d cause a local frenzy.

According to Bandier, Michael would also make one last concession: leaving the song “Penny Lane” out of the deal, because the billionaire wanted to give it as a gift to his daughter, named Penny.

Michael finally had what he wanted - one of the most prized catalogues in the history of modern music, one whose value he instinctively knew would only increase throughout the years, and the validation of his acute business savvy.

But many say that the singer’s interest for ATV went beyond the Beatles, to artists like Nat King Cole and Little Richard, whose works were included in the deal. They were not only seminal to music in general, but were also highly regarded in the African-American community.

Little Richard had famously been cheated out of payment for his work numerous times in his career. On a 2009 interview, Jackson family friend Steve Manning spoke of how compensating him fairly became one of Michael’s goals after the ATV purchase. https://www.today.com/popculture/michael-jackson-s-mom-played-role-business-wbna32297409

As it turns out, Little Richard would be more than fairly compensated. In a 2010 Rolling Stone article, he said: "[Michael] offered me a job with his publishing company once, for the rest of my life, as a writer. At the time, I didn't take it. I wish I had now."

But not everyone was happy with Michael’s purchase. After having declined bidding for the catalogue, Paul became upset upon hearing the news, reportedly saying "I think it’s dodgy to do things like that. To be someone’s friend and then buy the rug they’re standing on."

In a 2009 interview to David Letterman, he spoke of how the deal affected his friendship with Michael, eventually causing it to “fall apart”:

One of the main reasons for the fallout were the different expectations about the future of the catalogue. Paul seemed to believe that his personal relationship with Michael meant that he would give him a ‘fair deal’ on his music, or that he’d at least give him a ‘raise’.

But Michael wasn’t having it. He had nothing to do with the injustices Paul and John had been subjected to in the past. As he stated clearly to Paul, for him, it was ‘just business’ - the same business from which Paul had been profiting for years.

One can understand Michael’s stance – his millionaire friend, who had gloated about his own investments and had passed on the opportunity to buy his own catalogue, was now asking him to lose money as a personal favor to him.

As their relationship turned sour, Paul would then come up with his own version of events, which he has repeated extensively throughout the years, whenever he’s asked about his relationship with Michael.

His version implies that not only was he not given the option to purchase the ATV catalogue, but that Michael had blindsided him by buying it without notice.

The use of the Beatles’ catalogue for commercial advertising campaigns angered Paul even further. Seen below the 1988 Nike commercial with the Beatle’s song “Revolution”:

By allowing that to happen, Michael had touched a nerve: to a lot of people, specially their more passionate fans, Beatles songs were seen as ‘sacred’. Trivializing them via commercial adverts meant ‘selling out’, which was nothing short of blasphemy.

Paul speaks about the ads in a 1989 interview, in which he also tries to justify the use of his Buddy Holly songs for the same purpose:

Michael had found in Paul a powerful - even if not sworn – enemy. Although Paul never went on an open smear campaign of Michael, his became the official version of the ATV purchase story, turning a lot of people against Michael, who would from then on be seen as a backstabber.

Issues of race and national identity also came into play. Michael, a young black American who came from humble beginnings and had an ascending career, was pitted against an established, highly regarded white artist, considered to be honorable and a bastion of British identity.

Many say that the quarrel with Paul was a turning point for the vile way Michael would be referred to by the media. His biographer Joe Vogel pinpoints exactly 1985 as the year he went from ‘Jackson’ and ‘star’, to “Wacko Jacko’, ‘bizarre’ and ‘eccentric’.

On a positive note, Michael’s ATV Music catalogue purchase gave way to one of the most legendary music covers in history: his 1988 version of the Beatles song ‘Come Together’:

In 1995, Michael merged ATV Music with Sony Music Publishing, creating a joint venture called Sony/ATV. In exchange, he received $115 million and a 50% stake in the company, being entitled to half of the profits from current and future business deals made by the company.

The deal included a buy-sell clause, which allowed either party to purchase the other’s half. In late 2015, 6 years after Michael’s death, it emerged that Sony had notified the Michael Jackson Estate that it was initiating the buy-sell option.

In 2016, Sony bought out the Michael Jackson’s Estate stake in Sony/ATV for an estimated $750 million, becoming the sole owner of the catalogue.

In 2017, Paul sued Sony to try to regain control of his share of the Beatles catalogue, based on ‘copyright termination’, which gives authors the right to reclaim ownership of their works after a given period of time. Sony and Paul would settle out of court that same year. //

SOURCES: SMALLCOMBE, Mike “Making Michael: Inside the Career of Michael Jackson” (Clink Street Publishing, 2016); GREENBURG, Zack “Buying The Beatles: Inside Michael Jackson's Best Business Bet” and “Sony To Buy Michael Jackson's Half Of Sony/ATV For $750 Million” (Forbes);

RYS, Dan “A Brief History of the Ownership of the Beatles Catalog” (Billboard); STEMPEL, Jonathan “Paul McCartney settles with Sony/ATV over Beatles music rights” (Reuters); “100 Greatest Artists” (Rolling Stone); Sony/ATV website.

A big thank you to @mayonakagirl for suggesting the subject of this thread.