The value of Michael Jackson’s estate remains a topic of significant interest, especially in the dynamic market of music assets. Recent reports, spearheaded by Variety, suggest that Sony Music Group is in discussions to acquire 50% of Jackson’s estate. While Billboard hasn’t confirmed these specific talks, a thorough analysis indicates that the estate’s valuation could exceed the speculated $1.6 billion to $1.8 billion.
Billboard‘s assessment estimates that Michael Jackson’s recorded master catalog has generated nearly $44 million in annual revenue over the past three years. Given Jackson’s ownership of his masters, which he likely regained in the 1980s or early 1990s, he would have received the majority of this revenue. Factoring in an estimated 20% for distribution and producer royalties, the Jackson catalog would retain approximately $35 million annually.
Revenue Streams and Valuation
The publishing rights from his master recordings contribute nearly $22 million per year. Despite claims that Jackson didn’t write all of his biggest hits, he is consistently credited as a co-writer. Billboard estimates Jackson’s writing share at about 50%, equating to approximately $11 million. Considering cover versions and samples of Jackson’s music, this figure could rise by another 10%, bringing Jackson’s total publishing revenue to $12.2 million.
Combined, the revenue from Jackson’s masters and publishing totals roughly $47.2 million. Applying a 25-times multiple yields a valuation of nearly $1.2 billion. A more aggressive 30-times multiple would push the valuation to nearly $1.42 billion.
Copyright Considerations
Is a 30-times multiple justifiable? Jackson’s death in 2009 and the 1976 U.S. Copyright Revision, which grants copyright protection for works created after January 1, 1978, for the life of the author plus 70 years, support this higher valuation. Off the Wall, released in 1979, has copyright protection until 2079, providing a potential buyer with 57 years to recoup and profit from a 30-times multiple.
Additional Assets
The above estimates exclude grand rights revenue from the Broadway production MJ the Musical and the Michael Jackson One Cirque du Soleil show in Las Vegas. As estate executors John Branca and John McClain are producers of MJ the Musical, the estate likely receives a producer’s share. The Cirque du Soleil show, running since 2013, continues to generate revenue for the estate. Experts believe these Jackson-themed shows could remain sustainable for at least the next 10 years.
An upcoming MJ biopic will further boost revenue for the estate. These grand rights could add tens of millions of dollars annually to the estate’s income.
The Mijac Catalog
Jackson’s publishing catalog, Mijac, includes around 1,000 songs, with approximately 250 credited to Jackson and co-writers. The catalog features over 100 compositions by Leon Huff of Gamble & Huff, including hits like “Love Train” and “If You Don’t Know Me By Now,” as well as songs by Daryl Hall, John Oates, and others.
Mijac also includes over 250 songs by Sylvester Stewart of Sly & the Family Stone, such as “Dance to The Music” and “Everyday People,” along with songs by Jerry Lee Lewis, Jackie Wilson, Curtis Mayfield, Ray Charles, and Percy Sledge.
These 750 non-MJ songs likely generate an additional $5 million to $8 million in annual publishing revenue. Depending on the remaining copyright terms, this portion of the catalog could have a 15-times multiple.
Final Valuation and Potential Deal
If the Jackson estate can continue to monetize his music, likeness, and image beyond the nearly $50 million from recorded masters and traditional publishing – potentially reaching $75 million or higher annually – a valuation of at least $2 billion is plausible, according to Billboard. In 2013, Billboard estimated the Jackson estate’s profit at over $75 million, including revenue from master recordings, Mijac’s music publishing, and touring, licensing, and merchandise.
Given these assets and their value, this could be the most significant deal for a single artist’s music assets.
Controversy and Resilience
The 2019 documentary Leaving Neverland, which contained allegations of sexual abuse, has not significantly impacted the music catalog’s performance. Luminate data shows that the Jackson catalog has maintained consistent album consumption units, demonstrating the enduring appeal of his music.
Financial Structure
If the Jackson estate achieves $75 million in annual profit, a 30-times multiple would result in a $2.25 billion valuation. Sony may partner with financial backers to facilitate such a deal, as they have done in the past with the Bruce Springsteen catalog and EMI Music acquisition.
Estate Management
If the deal proceeds, Jackson estate executors Branca and McClain are expected to remain as managing partners, continuing their successful stewardship of the estate.
Primary Wave reportedly owns a “10% passive” stake in the estate, likely related to music publishing. If the Jackson estate sells a 50% stake, it would retain a minority share of around 40%. However, a sale of a 45% stake to Sony is also possible.
In conclusion, the valuation of Michael Jackson’s estate is complex, influenced by diverse revenue streams and future monetization potential. While precise figures remain speculative, it’s clear that the King of Pop’s legacy continues to command substantial financial interest.
