Lawyers for Michael Jackson and a key creditor are in talks to keep the pop star from defaulting on $200 million in loans secured by his prized stake in the Beatles’ song catalog, an attorney for the singer said Monday.
A default on the loans, which come due Tuesday and are held by the Fortress Investment Group, would allow the New York private equity fund to seize Jackson’s 50-percent interest in Beatles publishing rights valued at some $500 million.
The catalog, containing more than 200 Beatles tunes that include such classics as “Yesterday,” is jointly owned by Jackson and Sony Corp. through Sony/ATV Music Publishing.
Jackson bought publishing rights to the catalog for about $48 million two decades ago at the height of his career.
Brent Ayscough, a civil lawyer for Jackson, told Reuters that representatives for the 47-year-old entertainer and Fortress were working to renegotiate terms of the loans to give Jackson more time to avoid default.
And he suggested that the possibility of imminent foreclosure on Jackson’s stake in Sony/ATV was unlikely.
“There no doomsday, or anything like that,” Ayscough said. ”Nothing’s going to happen tomorrow. ... At the moment people are still talking.” He said a deal could be reached as early as this week.
He said Sony, which music industry experts believe is eager to acquire Jackson’s share of the catalog, also is a party to the talks.
Representatives of Fortress, which manages about $5 billion in private equity capital, could not immediately be reached for comment. A spokeswoman for Sony declined to discuss the matter.
According to prosecution testimony during his sex-abuse trial earlier this year, Jackson had borrowed heavily against his assets, including $200 million secured by his stake in Sony/ATV. Those loans, first provided by Bank of America Corp., were later sold to Fortress.
Jackson, who was acquitted of all charges by a California jury in June, is currently living in Bahrain in the Middle East.
Rights to the Beatles music passed to the conglomerate ATV through its purchase of the band’s publishing company, Northern Songs, in 1969.
Jackson in turn acquired the 4,000-song catalog, including the Beatles titles, when he bought ATV from the late Australian tycoon Robert Holmes a Court in August 1985. Ten years later, Jackson cut his stake in the catalog to 50 percent after merging ATV with Sony’s publishing. Jackson also kept a 50-percent stake in new songs added to the collection.
The Sony/ATV catalog also includes songs like Bob Dylan’s classic “Blowin’ in the Wind” and the works of such artists as Joni Mitchell and Stevie Nicks. But the Beatles’ rights account for an estimated two-thirds of the collection’s value.
Industry experts say the catalog is one of the most treasured in the world, especially since the recent explosion in music licensing for media ranging from movies and television ads to cellphone ringtones and video games.