Music biz insiders say Sony-Jackson deal makes sense
By Gail Mitchell
LOS ANGELES (Billboard) - The magnitude of Sony Music Entertainment's landmark recording contract with the estate of Michael Jackson raises an inevitable question: Is it a smart deal for the label?
Given Jackson's superstar status, his influential creative legacy and the market's seemingly insatiable appetite for all things MJ, the consensus of executives who handle works of other deceased music stars is an overwhelming "yes."
Under the contract, which guarantees the estate between $200 million and $250 million, Sony will issue 10 releases of Jackson's music through 2017, with the double-CD "This Is It" soundtrack counting as the first of these. Already in the pipeline is the planned November release of a collection of previously unreleased tracks and a 2011 reissue of Jackson's seminal 1979 Epic album, "Off the Wall."
The Jackson/Sony deal eclipses such recent headline-making unions as Live Nation Entertainment's pacts with Madonna and Jay-Z, pegged at $120 million and $150 million, respectively. And it places Jackson among a select group of artists who posthumously remain major wage earners: Elvis Presley, Ray Charles, Frank Sinatra and Jimi Hendrix, whose new album of unreleased material, "Valleys of Neptune," debuted at No. 4 on the Billboard 200.
Since Jackson's June 25 death, his catalog has generated sales of 8.7 million albums in the United States, according to Nielsen SoundScan, and a reported total of 31 million worldwide. To date, the "This Is It" double CD has sold 1.5 million units domestically, according to SoundScan, and more than 5 million worldwide, according to Sony.
Sony has been in talks with the estate since late last summer, when they came together to discuss the "This Is It" movie and soundtrack, according to Columbia/Epic Label Group chairman Rob Stringer. The new contract renews Jackson's 30-year association with the company, which dates back to 1979.
"My first premise for wanting to do something long-term," Stringer says, "was there was music that was out there post the term of our contract, and I wanted that wrapped up as part of our forward-going structure with the estate. For instance, it would have been a very strange process if we had to deal with the estate and then another record label signed the material post the term after 'Invincible.' It was a much-needed process for both sides to have everything in place. Both the 'This Is It' movie soundtrack and DVD exceeded our expectations. We knew we had something incredibly buoyant in terms of the legacy of a fantastic artist." Continued...