It’s a big day in music publishing with the closing of the $2.2B cash and debt deal by a consortium led by Sony/ATV — Sony’s partnership with Michael Jackson’s estate — for one of the industry’s crown jewels: EMI Music Publishing. The pact gives Sony/ATV about 1.3M additional titles to administer including pop classics “My Girl,” “Bohemian Rhapsody,” “Every Breath You Take,” “You’ve Got A Friend,” “New York, New York,” “Over The Rainbow” and “Have Yourself A Merry Little Christmas.” Sony/ATV, which already had about 750,000 titles — including The Beatles’ catalog — paid $320M in cash for 40% of the property. Others backing the EMI publishing acquisition include David Geffen, Mubadala Development Company PJSC, Jynwel Capital, and the Blackstone Group’s GSO Capital Partners. ”Music publishing, along with the rest of our entertainment companies, has been a bright spot in our business portfolio, and we expect that trend to continue with this important acquisition,” Sony CEO Kazuo Hirai says. The Sony/ATV-led group bought the EMI collection from Citigroup. The bank took control of EMI last year after its previous owner, Guy Hands’ leveraged buyout firm Terra Firma, was unable to make payments on the debt he took on to buy the music company in 2007 at the height of the private equity bubble. The FTC approved the Sony/ATV deal last week but has yet to rule on Citigroup’s agreement to sell EMI’s music production operation to Vivendi’s Universal Music for $1.9B.
The clearance still leaves Sony waiting for the Federal Trade Commission, which is expected to take a few months before deciding whether to approve the $2.2B deal. But it’s still a big step forward for Sony’s ambition to make its Sony/ATV subsidiary — a joint venture with Michael Jackson’s estate — the No. 1 owner of music publishing rights. EMI’s catalog includes standards such as New York New York, You’ve Got A Friend, Ain’t No Mountain High Enough, Over The Rainbow, I Heard It Through The Grapevine, Singin’ In the Rain, and The James Bond Theme. The EU said that it would approve the acquisition once Sony divests four catalogs — Virgin UK, Virgin Europe, Virgin US, and Famous Music UK — and works by 12 contemporary songwriters including Gary Barlow, Ozzy Osbourne, Robbie Williams, Ben Harper, Lenny Kravitz, Placebo and The Kooks. With that agreement,