August 10th was a big day on Michael Jackson‘s calendar. And on the flipside, a big but despised one on Paul McCartney’s.
For Jackson, the day had twofold stature. On the date in 1979, he instantly resurrected what was at that point a solo career that had been in freefall, with the release of his Off The Wall album. It would go on to sell over 20 million copies on the strength of singles like “Don’t Stop Til You Get Enough” and the title track. It quickly launched his adult career as “the King of Pop.” That made him not only a household name, but a lot of money as well. But on this day in 1985, he did what would end up making him a great deal more money – something Billboard called “the shrewdest move of his 40-plus year career.” A move that would make him hundreds of millions of dollars during his lifetime…but cost him one friend. Paul McCartney. Because on this day 37 years back, Jackson bought ATV Music Publishing…which the media basically paraphrased as “the Beatles songs.”
ATV stood for Associated Television, a company started in 1957 by British media mogul Lew Grade. It was primarily, despite the name, a music publishing company. In 1969, the Beatles entered the story, selling their Northern Songs publishing company (which held the rights to all the Lennon/McCartney songs) to ATV for tax reasons.
As it happened, McCartney and Jackson became friends and worked together on a couple of singles. During the time they were making “Say Say Say”, Paul talked of business to Michael…who paid too close attention. McCartney pointed out just how profitable publishing was in the music world, and how he’d bought the publishing rights to Buddy Holly’s catalog. This all apparently surprised Jackson, but was absolutely correct.
Music publishing is an industry as old as recorded music itself, if not older. Originally, it basically did what the name suggests – published music. Back in the pre-radio, pre-gramophone days, the only way to get ahold of popular music was to buy the sheet music and play it yourself, or have someone play it for you. Sheet music was a huge seller at the turn of the last century, and putting out those printed pages made money.
That’s still a part of the biz, but a much smaller one. But, music “publishing” is a huger industry. According to Robert Allen at Universal Music, the companies make their money four ways, one of which is the sheet music, or “print income.” Much more important are the “mechanical royalties,” “synchronization incomes” and “performance income.”
The mechanical royalties are monies paid every time a copy of the music is sold. A specific amount is given to the songwriter for every song on a CD, LP, DVD, sold or downloaded through something like I-tunes. It’s said that the typical rate is about 9 cents per song for a physical hard copy, although there is some variation. Sell a million copies of an album with ten songs you wrote on it, and that’s $900 000 just in writing money, for example.
Performance royalties are another huge source of income. Every time a song gets played on radio, TV as a video, or in nightclubs or other public gatherings, money gets paid to the songwriter. Organizations like BMI and ASCAP keep track of the number of plays, collect the money and distribute it back.
Synchronization royalties are the payments for songs used in movies or TV shows… for example, Stranger Things using Kate Bush’s “Running up that Hill.” These royalties can get into the hundreds of thousands of dollars when big movies or national commercials are involved.
Now, the odd thing is that even though the songwriter holds the copyright, they split the money (generally 50-50) with the publisher. Which seems a bit of a rip-off for the artist, but the publisher does do a fair bit of work for them. Especially when it comes to the synchronization; usually it’s the publisher who agrees to license out a song for movies or TV, sets the fees and does the paperwork. The savvier artists usually try to own their own publishing company though, so they can keep all the income, but few actually do so.
Which leads us back to ATV and Michael. In 1985, Jackson was on top of the world, Thriller was just starting to drop off charts over two years after it had come out, and it alone had made him $50 million or more by then, not counting all his tours and increased earnings from back catalog sales which had picked up. Around that time, ATV’s owners decided to sell. Paul McCartney by now regretted not having control over the Beatles catalog and tried to buy the company. Jackson got wind of it and swooped in at the last minute and outbid the ex-Beatle, buying it for approximately $47 million.
“I think it’s dodgy to do something like that,” Paul said of it. “To be someone’s friend, then buy the rug they’re standing on.” When he tried to complain to Jackson about it, the latter reportedly said “oh Paul! That’s just business.” Business got more nasty due to the synchronization royalties. Up until then, Beatles songs hadn’t been leased out for commercials, but under Jackson’s guidance they were…which infuriated Paul. “It kind of spoils it. Just takes the edge off,” he complained, hearing his songs in ads hawking shoes, computers and more. The pair reportedly never spoke again.
But whether or not this bothered the Gloved One is unclear. As Billboard put it, he was “a profligate spender” so he really made use of the newfound income, which included some 4000 songs and had some of Bruce Springsteen’s, Pat Benatar’s, Bob Dylan’s and many more as well as the Fab Four output. In 1995, he sold half his holdings to Sony, who renamed it Sony ATV, for $100 million. Once in the hands of Sony, the publisher grew profligately, buying up other companies like Acuff-Rose, a major country music publisher, and eventually holding rights to over 60 000 songs (it’s since increased considerably from there.) Once again a bit strapped for money, he sold half his remaining share – or one quarter of the company – in 2006 for $250 million. In 2012, Jackson was no more…but that didn’t stop his estate from taking part in Sony ATV’s acquisition of EMI’s publishing division. In 2016, Sony ended their relationship with the deceased singer by buying out his remaining part of the business for another $750 million.
If there’s any message in the whole story, it might be that young musicians would do just as well getting a good manager with some legal knowledge to keep their own publishing rights as they would in bringing in, say a top-notch session guitarist for their records. And be careful what you “Say Say Say” to your friends.