As jurors weigh Michael Jackson's guilt in his child molestation trial, music industry executives and bankers have been weighing a separate, but related question: Will Jackson have to sell his $500 million stake in the Beatles' music catalog?
Jackson bought the publishing rights to the catalog for about $48 million two decades ago at the height of his career.
But these days, according to testimony at his trial, the self-proclaimed King of Pop is deep in debt at a time when investment interest in the income-spinning property of his storied collection of song rights is strong, industry experts said.
Many believe that Jackson will have to sell his stake in the catalog if he is found guilty and say even an acquittal could prove to be a catalyst for a deal.
The Beatles songs are jointly owned by Jackson and Sony Corp. through Sony/ATV Music Publishing company.
Jackson attorney John Branca and his adviser, music publisher Charles Koppelman, did not return calls seeking a comment.
The Sony/ATV catalog also includes songs like Bob Dylan's classic "Blowin' in the Wind" and the works of artists such as Joni Mitchell and Stevie Nicks.
A spokeswoman for Sony ATV declined to comment, but many industry observers expect Sony is waiting for the opportunity to buy out Jackson. One source close to Sony, however, said no deal appeared to be imminent.
Jackson and former Beatle Paul McCartney collaborated during the 1980s on various songs when the pop star got the idea to buy the copyrights.
Conglomerate ATV in 1969 had purchased Northern Songs, a publishing company established by the Beatles. The catalog included some 4,000 songs, including more than 200 Beatles tunes, worth an estimated two-thirds of the catalog's value.
ATV was then owned by the late Australian tycoon Robert Holmes a Court, whose company, Bell Group, negotiated with Jackson for 10 months before striking a deal in August 1985.
In 1995, Jackson cut his stake to 50 percent after merging ATV with Sony's publishing. Jackson also has a 50-percent stake in new songs added to the catalog.
"I've heard the rumors he's trying to raise cash and Sony probably would have the right of first refusal and would be first in line to buy if he chose to sell," said Owen Sloane, an entertainment lawyer who was involved in the original 1985 deal on behalf of ATV.
Accountant John Duross O'Bryan testified for the prosecution at Jackson's trial that the 46-year-old entertainer had steadily borrowed against his holdings and not paid his share of Sony's continuing investment. Jackson would have to pay off about $200 million in loans securing the catalog, he said.
Those loans, first provided by Bank of America, were sold in the past month to New York private equity fund, Fortress Investment Group, sources familiar with the matter said.
Fortress was unavailable for comment, but if Jackson defaulted on the loans, the fund would be in a position to seize control of Mijac, the company that controls copyrights to Jackson's songs.
While physical CD sales have been declining with the explosion of digital distribution, publishing rights have grown in value as songs are being licensed for everything from movies to cell-phone ringtones to video games.
"One of the things that is going on is that investment bankers are getting more into the field, because music publishing is one of the few assets — it is an annuity — that's not going away and only getting more valuable with ringtones and such," said Mike Sigman, president of Major Songs, a music publishing company.