In today’s red-hot market for music assets, what is Michael Jackson‘s estate worth?
That’s the $2 billion question swirling around the business, amid reports by outlets led by Variety, which broke the news, that Sony Music Group is in negotiations to buy 50% of Jackson’s estate. Billboard couldn’t confirm those talks are happening, but we crunched the numbers and estimate that the estate may carry an even higher valuation than the $1.6 billion to $1.8 billion speculated in Variety‘s story.
Billboard estimates that the Michael Jackson recorded master catalog averaged nearly $44 million in annual revenue over the last three years. Since Jackson owned his masters (he likely got them back in the 1980s or early 1990s, when a bunch of Sony megastar artists individually negotiated to eventually reclaim ownership of their masters in exchange for re-signing recording contracts with the major record company), he would receive the bulk of that revenue. After subtracting an estimated 20% for distribution and producer royalties, that would leave the Jackson catalog with about $35 million annually.
The publishing from his master recordings, meanwhile, generates almost $22 million a year. While some reports on the potential Jackson estate sale to Sony claim that Jackson didn’t write some of his biggest hits, in practically every instance Jackson is in fact listed as a co-writer. Billboard estimates Jackson has about a 50% share of his writing, which would put his take at about $11 million. Considering cover versions and songs that sample Jackson’s music, which could add as much as another 10% on the upside, that would bring Jackson’s take to $12.2 million.
Altogether, the combined revenue from Jackson’s masters and publishing adds up to about $47.2 million. If trading at a 25-times multiple, that adds up to a nearly $1.2 billion valuation. At the ultra-megastar rate of 30 times, the valuation would be nearly $1.42 billion.
Is a 30-times multiple out of the question? Jackson died in 2009, and the 1976 U.S. Copyright Revision grants copyright protection for work created after Jan. 1, 1978, for the life of the author plus 70 years. Off the Wall was released in 1979, so that means songs on that album and his subsequent releases expire in 2079. That would give any buyer 57 years to recoup and profit from the 30-times multiple.
But wait! There are more music-related assets from the Jackson estate to consider. The above estimates don’t include grand rights revenue that the estate receives from the Broadway production MJ the Musical and the Michael Jackson One Cirque du Soleil show in Las Vegas. The estate likely gets a producer’s cut from MJ the Musical too, as estate executors John Branca and John McClain are listed as producers on the project; the show will start touring in August, with a London production launching in March 2024. Considering the Cirque du Soleil show has been in existence since 2013 and is still driving revenue to the estate, there’s no telling what kind of a lifespan MJ the Musical will have in its various incarnations. One veteran music-asset trader queried by Billboard says he thinks the various Jackson-themed shows are sustainable for at least the next 10 years, if not longer.
There is also an upcoming MJ biopic that will generate plenty of revenue for the estate. All in all, the grand rights from these shows could bring in tens of millions a year more to the estate — or a potential buyer.
Jackson’s publishing catalog, Mijac, also includes many other writers’ songs that he started acquiring in the 1980s. According to the ASCAP/BMI Songview system, the Mijac catalog numbers about 1,000 songs — of which about 250 are credited to Jackson and co-writers. The other songs include over 100 compositions by Leon Huff of the famed songwriting/production team Gamble & Huff (and Thom Bell) — including “Love Train,” “Express Way To Your Heart,” “Cowboys To Girls” and “If You Don’t Know Me By Now” — as well as songs by Daryl Hall, John Oates, Len Barry, Tim Moore, Tom Sellers, John Madera and David White. All of those songs were acquired when Jackson bought the Double Diamond catalog, according to various press reports.
The Mijac catalog also includes more than 250 songs by Sylvester Stewart of Sly & the Family Stone, including “Dance to The Music,” “Everyday People” and “Hot Fun in The Summertime,” as well as songs written and/or performed by Jerry Lee Lewis (“Great Balls of Fire”), Jackie Wilson (“(Your Love Keeps Lifting Me) Higher and Higher”), Curtis Mayfield (“People Get Ready”), Ray Charles (“What’d I Say”), Percy Sledge (“When A Man Loves A Woman”) The Crests (“Sixteen Candles”), Jerry Jeff Walker (“Mr. Bojangles”), Dion and the Belmonts (“Runaround Sue” and “The Wanderer”), Dion‘s solo works (“Abraham, Martin and John”), Shirley Bassey (“Goldfinger”), Ringo Starr (“You’re Sixteen”), The Archies (“Sugar Sugar”), McFadden & Whitehead (“Ain’t No Stoppin’ Us Now”) and JJ Cale (“After Midnight”).
These 750 non-MJ songs probably bring in another $5 million to $8 million in publishing revenue annually. Depending on how much time is left in the copyrights, that portion of the catalog would probably have a 15-times multiple.
If the estate can continue to find ways to monetize Jackson’s music, likeness and image beyond the nearly $50 million that comes in annually from the recorded masters and traditional publishing income streams — bringing its annual total gross to $75 million or even higher — then it should carry at least a $2 billion valuation, by Billboard‘s estimate. For reference, in 2013, Billboard estimated that the Jackson estate brought in more than $75 million in profit, including net label and net publisher share in 2012, estimating $51 million in revenue from the master recordings and a revised estimated $41 million cut for the estate; $15 million from Mijac’s music publishing; plus $30 million in profit from touring, licensing and merch, including from the Cirque du Soleil show, Michael Jackson: The Immortal World Tour.
Given all the assets involved and their incredible value, this could very well be the biggest deal so far for a single artist’s music assets — if it happens.
What about controversy potentially slowing down sales and activity? It doesn’t seem like any more surprises will come along to hurt the Jackson revenue-generating machine. The 2019 documentary, Leaving Neverland, in which two former child stars alleged that Jackson had sexually abused them — allegations the Jackson estate says have been debunked in civil lawsuits — hasn’t impacted the music catalog’s momentum. According to Luminate, in 2018 when the catalog was still receiving a boost from the 2017 fourth-quarter release of the Scream compilation album, the Jackson catalog totaled 1.3 million album consumption units. In 2019, the catalog generated 1.28 million units; in 2020, it generated 1.1 million units; in 2021, it generated 1.27 million units; and last year it generated 1.45 million units. And that’s just for the U.S., which the estate has long claimed comprises one-third of Jackson’s global sales and activity.
So if the Jackson estate can annually hit $75 million in profit, at the pie-in-the-sky megastar multiple of 30 times that would bring a $2.25 billion valuation. At that type of valuation, how would Sony pay for that? The company has partnered with finance backers in the past: Eldridge helped Sony buy the Bruce Springsteen recorded masters and production catalog, and a consortium Sony put together bought EMI Music back in 2012. But so far Billboard has been unable to determine if a financial player would be coming in to finance a Jackson deal, and it’s possible Sony might be going in alone.
If the deal were to happen, it’s likely that Jackson estate executors Branca and McClain — who in the last decade have successfully brought in over $1 billion in revenue for the estate beyond Jackson’s own music earnings, through deals like selling its share of Sony ATV and EMI Music — will remain in place as managing partners.
There is, however, some uncertainty over what the controlling interest in the estate would look like. Sources say Primary Wave owns what is described as a “10% passive” stake in the estate, likely the music publishing piece. And if the Jackson estate were to sell a 50% stake, that would leave the estate as a minority shareholder with around 40%. It’s more likely that the Jackson estate is considering selling a 45% piece to Sony. In either scenario, Branca and McClain are expected to continue to call the shots.
Sony Music Group, the Jackson estate, Primary Wave and Eldridge either declined to comment for this story or didn’t respond to requests for comment.
